David Rees QC appears in leading case on foreign powers of attorney
The Senior Judge of the Court of Protection has handed down judgment in the case of Re Various Applications Concerning Foreign Representative Powers [2019] EWCOP 52. This was a test case involving five unrelated applications to the Court of Protection. The common theme between the five applications was that the Court was in each case being asked to make orders to give effect to foreign powers of attorney or similar arrangements originating from a foreign jurisdiction. David Rees QC, instructed by the Official Solicitor as Advocate to the Court provided the judge with a detailed analysis of the difficult legal issues raised by the applications.
Under Schedule 3 paras 19 and 22 of the Mental Capacity Act 2005 (“MCA 2005”) and the rule 23.4 of the Court of Protection Rules 2017 (“COPR 2017”) the Court of Protection has power to recognise and enforce “protective measures” from foreign states in relation to “adults”. Both of these expressions have specific meanings under the MCA 2005. “Protective measure” means “a measure directed to the protection or property of an adult”. “Adult” for these purposes means a person over the age of 16 who “as a result of an impairment or insufficiency of his personal faculties, cannot protect his interests.” It should be noted that being an “adult” within the meaning of Sch 3 MCA 2005 is not synonymous with lacking capacity under section 2 MCA 2005. The definition of “adult” is derived from the 2000 Hague Convention on the International Protection of Adults (which the UK has signed, but not yet brought into force in England and Wales) and is intended to avoid technical distinctions between the legal tests of capacity in different jurisdictions.
Under Sch 3 MCA 2005 the Court of Protection also has certain powers in relation to foreign powers of attorney “of like effect” to lasting or enduring powers. MCA 2005 section 15 and COPR 2017 rule 23.6 provides a mechanism under which the Court can make a declaration that an attorney acting under such a power would be acting lawfully when exercising the power in England and Wales. The Court also has power under MCA 2005 Sch 3 para 14 and COPR 2017 rule 23.5 to disapply or modify a foreign power if it is not exercised in a manner sufficient to guarantee the protection of the person or property of the donor.
A question that the Court had to consider was whether foreign powers of attorney are capable of being “protective measures” for the purposes of Sch 3 MCA 2005. If they are then the Court would have jurisdiction to directly recognise and enforce the powers under Sch 3 MCA 2005 paras 19 and 22. However, the judge held that the definition of “protective measure” required a degree of intervention by the foreign state (for example, a court order or administrative act directly related to the adult’s loss of capacity). She held that purely private law arrangements such as powers of attorney would not normally amount to “protective measures” for the purposes of Sch 3 MCA 2005, although she held out the possibility that the answer might be different if such powers were the subject of a formal confirmation or registration process in the foreign jurisdiction that was directly related to the adult’s loss of capacity.
A further question for the Court was whether any form of capacity threshold existed for the exercise of its jurisdiction to make a declaration under section 15 MCA 2005 and COPR 2017 rule 23.6 that an attorney acting under a foreign power of attorney is acting lawfully when exercising the power in England and Wales. The judge held that for the Court to make such a declaration, the donor of the power must be an “adult” within the meaning of Sch 3 para 4 MCA 2005; that is to say someone who as a result of an impairment or insufficiency of his personal faculties, cannot protect his interests. Thus if the donor remains of full capacity the Court of Protection has no jurisdiction to make such a declaration.
The judge recognised that where a single or “one-off” order was required it may often be simpler and more proportionate to ask the Court of Protection to exercise its usual “best interests” jurisdiction under sections 15 and 16 MCA 2005 over property situate in Engalnd and Wales or over a person present there. However in such cases the Court will need evidence to establish that (a) the person in question lacks capacity to make the decision in question and (b) it is in their best interests to make the decision sought. This raised a third question for the Court; whether, whilst a valid foreign power of attorney was in effect, the Court was entitled to exercise its usual “best interests” jurisdiction under sections 15 and 16 of the MCA 2005 to make declarations and take decisions on behalf of the donor (provided of course that the Court was satisfied that the donor lacked capacity under section 2 MCA 2005). This question arose as there is an assumption under the 2000 Hague Convention that a power of attorney emanating from the state in which the donor is habitually resident will displace the Court of Protection’s powers to make decisions in relation to his property or welfare in England and Wales. However, the 2000 Hague Convention is not yet in force and the provisions of Sch 3 MCA 2005 that are currently in force do not contain any similar restrictions. Accordingly the judge held that there was no reason why the Court of Protection could not exercise its best interests jurisdiction even where a foreign power of attorney was in existence. However she did make the point that the existence of such a power would be material to the question of what was in the donor’s best interests.
Another point that arose related to the Court of Protection’s power under Sch 3 para 14 MCA 2005 to modify or disapply the provisions of a foreign power of attorney if it is not exercised in a manner sufficient to guarantee the protection of the person or property of the donor. The judge held that it was not necessary for the Court to wait until a power had been abused in this way, and the Court could modify or disapply the power to prevent such a breach from occurring. One of the cases before the Court involved a lasting power of attorney from Singapore and the judge exercised her power to modify the power by (a) limiting the attorneys’ powers to make gifts to those set out at section 12 MCA 2005 (in relation to English LPAs) and (b) providing that (as with an English LPA in similar form) the powers of the attorneys did not extend to the giving or refusing of consent to life sustaining treatment.
In summary:
• Foreign powers of attorney are not (usually) “protective measures” and therefore cannot be the subject of an application for recognition and enforcement under Sch 3 paras 19 and 22 MCA 2005 and r 23.4 COPR 2017.
• The Court of Protection’s jurisdiction to make a declaration under section 15 MCA 2005 and r 23.6 COPR 2017 that an attorney acting under a foreign power is acting lawfully when exercising the power in England and Wales, is confined to cases where the donor of the power is an “adult” within the special meaning of that word under Sch 3 para 4 MCA 2005.
• The Court of Protection may modify or disapply a foreign power of attorney under Sch 3 para 14 MCA 2005 and COPR 2017 r.23.5 to prevent the attorney from exercising it in a manner sufficient to guarantee the protection of the person or property of the donor, even if such a breach has not yet occurred.
• The Court of Protection can exercise its best interests jurisdiction under sections 15 and 16 MCA 2005 in respect of an adult with property in England and Wales or who is present here, even if there is a valid power of attorney from his state of habitual residence in existence.
The practical consequences of the decision include the following:
• attorneys under foreign powers of attorney are unable to seek a declaration from the Court of Protection as to the lawfulness of their actions under the power if the donor retains capacity (or more strictly speaking is not an “adult” within the meaning of Sch 3 para 4 MCA 2005). Such attorneys may therefore find that they encounter practical difficulties in using such powers in England and Wales in those circumstances.
• In cases where a “one off” order is sought; for example where an attorney wishes to remit funds from a bank account in England and Wales back to the country where the donor lives it may be easier to apply for an order authorising that step under the Court’s usual “best interest” jurisdiction.
You can find a copy of the judgment here
