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Sheriff decision causes power of attorney alert

16 June 14

Advice from the Society, and comment from the Office of the Public Guardian, following the sheriff court decision holding invalid a widely used form of continuing power of attorney

Solicitors should review the wording of powers of attorney documents in the wake of a new sheriff court decision, the Law Society of Scotland has warned.

The advice follows Sheriff Baird’s decision (www.scotcourts.gov.uk/opinions/2014SCGLA1.html) that a standard form power used by the Clydesdale Bank was invalid for failing to comply with the requirements of the Adults with Incapacity Act. The document used by the bank was in the style of those available on the Office of the Public Guardian website, and widely used.

Coral Riddell, head of professional practice at the Society, said the decision may have serious implications for solicitors and clients.

“We intend to look into the matter more closely but, in the meantime, are advising solicitors to review any power of attorney documentation they hold and consider whether they should alter the wording,” she commented.

“We are aware that the sheriff’s decision is under appeal and will continue to keep our members updated.”

On this decision, Public Guardian Sandra McDonald issued the following note: “The Adults with Incapacity (Scotland) Act 2000, s 15(3)(b), states that a continuing power of attorney shall only be valid if, inter alia, ‘it incorporates a statement which clearly expresses the granter’s intention that the power of attorney be a continuing power’. The majority of deeds submitted to the Public Guardian address this by narrative in the opening clause often akin to ‘person X to be my continuing attorney (“my attorney”) in terms of section 15 of the Adults with Incapacity (Scotland) Act 2000’. Additionally, the title of the deed often makes explicit reference to it being a continuing power of attorney and there is often a ‘recall clause’ which indicates that the document is to remain in effect until a recall in writing or until the granter’s death. It seems generally accepted that these, especially when coupled with the direct reference to s 15, ‘clearly express the granter’s intention that the deed is to be a continuing power of attorney’, and thus meet the statutory requirement.

“Consequently, the Public Guardian accepts such references as sufficient evidence that the granter intended the power to have continuing effect and thus that the statutory requirement is met. However, in a recent opinion, Sheriff Baird concluded this level of narrative was inadequate, fell short of the statutory requirement, and thus found invalid what these days is a very standard power of attorney style.

“Practitioners’ attention is drawn to the divergent views on this matter in order that they can determine whether a more explicit reference is required which will ensure protection from any challenge of invalidity if and when it is necessary to rely on the power of attorney.”
 

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