The independent body proposes changes to “clamp down on abuse of powers of attorney”
Independent legal reform body South Australian Law Reform Institute (SALRI) has released a report outlining proposed changes to the use of powers of attorney in the state, formally known as Enduring Powers of Attorney (EPA), to prevent their abuse.
In a statement, the University of Adelaide-based group expressed “extensive concern” over the number of financial abuses – including the misuse of EPAs – occurring against vulnerable adults, where lawyers have acted against the interest of these people who trusted them to manage their affairs.
“We are making 120 recommendations about the role and operation of the Powers of Attorney and Agency Act 1984 (SA), including changes to the law and practice to clarify and improve the use and operation of EPAs in South Australia,” said John Williams, director of SALRI and professor at the university.
Among the institute’s proposed changes are:
- Educational and operational measures to promote and enhance the use and operation of EPAs and the awareness of misuse, especially amongst “vulnerable populations” such as culturally diverse people, Aboriginal communities, and the disability sector
- Greater clarity of the roles, powers and responsibilities of an attorney, and who can act as an attorney, to be written into the law
- Updates to procedures and forms that clarify and emphasise an attorney’s responsibilities, and confirm that they understand their responsibilities
- Witnessing of EPAs by suitable people such as a JP, lawyer, or police officer
- Greater clarity and strength in the role of witnesses in ensuring that a principal has the capacity to create an EPA
- A strict definition of incapacity written into the law
- Confirmation of incapacity by a medical practitioner before an EPA can take effect
- A compulsory state and eventual national EPA register, and a suitable agency to maintain it
- A new civil flexible low-cost remedy to deal with the misuse of EPAs and the South Australian Civil and Administrative Tribunal (SACAT) to handle cases of misuse of EPAs, with the ability for the Supreme Court to hear complex or very large estates cases
“Our recommendations are drawn from extensive research and consultation with interested parties, experts and the community who expressed concerns about the financial exploitation of older South Australians,” Williams said.
SALRI’s report came after last year’s community consultation in regional South Australia through the YourSAy website.
“We were presented with powerful examples of the misuse of EPAs and the general lack of accessible and effective civil and criminal remedies to respond to such abuse,” said Sylvia Villios, the report’s lead author. “At the present, there is no agency which oversees powers of attorney to make sure that abuse does not occur. Our review has recognised the inadequacy of the present law and practice, especially in light of wider issues relating to elder financial abuse and the financial and other abuse of vulnerable and disabled people.”
David Plater, deputy director of SALRI, said EPAs served many benefits as long as they are used appropriately.
“They are an important expression of autonomy and a valuable and convenient legal instrument by which many people in the community can protect their financial and property interests in the event of their future cognitive impairment,” he said. “Most EPAs seemingly work well, but if the trust placed on an attorney is abused by them, then the effect of financial impropriety on a principal’s financial security can be a permanent and life-threatening setback.”
Plater also said that there must be a balance between addressing and preventing abuse while retaining and promoting the “utility and use” of EPAs.
“Our focus in reviewing the current law has been to protect the rights of the principal,” he said.
SALRI’s report was handed out to the attorney-general’s office earlier this week. The office will then forward it to the South Australian government and parliament for review and approval.
According the institute, the Powers of Attorney and Act 1984 (SA) has not been subjected to detailed amendment or review in the nearly four decades since its commencement. The last review was in 1981.