It is common for individuals to worry about who would manage their affairs if they no longer had the capacity.

In England and Wales, Lasting Powers of Attorney (LPAs) can be an effective solution, allowing such a person (A) to appoint someone they trust (B) to act on their behalf if they lose capacity mental and become unable to make decisions for themselves. Confusingly to the average layman, A is known as the donor and B as the lawyer.

There are two types of APL, each with a standard form provided by the Office of the Public Guardian that leaves limited room for creativity but a comforting level of standardization: one covering decisions about the donor’s property and financial affairs , and the other dealing with decisions regarding the health and well-being of the donor. Donors often choose to include specific guidelines in their LPAs, setting out preferences, instructions or restrictions regarding the exercise of the powers of the trustee.

However, regardless of the restrictions imposed by the donor in the LPA itself, the law also imposes strict rules governing the powers and duties of an attorney when acting as such. In particular, Section 12 of the Mental Capacity Act 2005 (MCA 2005) provides that solicitors may only give gifts in limited circumstances – usually on customary occasions (eg birthdays or Christmas) or through charitable donations that the donor might otherwise have had. we expected to do. In both cases, the value of the gift must not be “unreasonable having regard to all the circumstances and, in particular, the importance of the estate of the donor”.

Donations that do not meet these criteria can only be made with the authorization of the Protection Court. The recent case of Chandler vs. Lombardi [2022] EWHC 22 (Ch) serves as an important reminder of these limits placed on lawyers when acting under an LPA.

In 2016, Janet Lombardi was registered with the Office of the Public Guardian as an attorney for her mother, Concetta Chandler, for both types of APL. Between 2016 and 2018, Concetta’s mental health deteriorated, and on June 4, 2018, acting under the Financial Affairs LPA, Janet transferred title to Concetta’s house to the common names of herself. and Concetta, without compensation, the transfer being registered at the Land Registration. Concetta’s son challenged the transfer, asking for a declaration that the transfer of ownership was void and that the land registry entry of the property required rectification.

The High Court confirmed that as the transfer of the property was a gift and did not fall within the exceptions set out in Section 12 MCA 2005, Janet had no power to effect the transfer and the transaction was voided. Although Janet was unaware of the need to seek permission from the protection court in relation to the gift, this ignorance was treated as a lack of care, given the nature of the gift and the impact it has. had on the affairs of Concetta, particularly in light of the clear obligations of a lawyer set out in the MCA 2005.

The case serves as a cautionary tale to all lawyers acting under an LPA, reminding them that there are limits to their powers and that they should inform themselves of their duties. Lawyers should have no doubts about this, as the forms themselves incorporate a number of disclaimers and links to the law, guidance and codes of practice. However, when in doubt, a lawyer should seek legal advice as to whether a proposed course of action is consistent with their duties and obligations under the MCA 2005.