Although we are still waiting for the results of the consultation by the Ministry of Justice in connection with the modernisation of lasting powers of attorney (LPAs) which ended in October, the pros and cons of digitalising the process for making an LPA will likely always prove divisive.
An LPA is a document that allows an individual to appoint one or more persons to make decisions on their behalf. There are two types of LPA, one covering health and welfare decisions and another covering property and financial decisions. These documents can be used by your chosen attorney(s) if you lack capacity to make decisions for yourself, or, in the case of the property and financial affairs LPA, whilst you have capacity but only ever at your direction.
The primary proposal put forward as part of the consultation was the digitalisation of LPAs. This includes the use of digital signatures and could remove the need for signatures to an LPA to be witnessed. LPAs would also be digitally checked and could be instantly sent for registration with the Office of the Public Guardian (OPG).
Currently, LPAs are created in paper form and require ‘wet’ signatures or marks to be made in the documents by the person making the LPA and their attorneys; these signatures must also be witnessed. The role of witnessing signatures and the role of the certificate provider needing to sign the LPA provide important safeguards against fraud and/or abuse. Once an LPA has been signed and registered with the OPG it can be used by an attorney. Unless safeguards are in place, the system could be open to abuse.
The use of digital signatures is becoming commonplace. The Law Commission published a detailed report on the use of digital signatures across various legal sectors in 2020. While electronic signatures are capable in law of being used to execute a document, the issue of the associated ‘formalities’ attached to the signing of certain documents (such as witnessing of signatures) prevents them from being able to be used in all circumstances.
The signing of wills and LPAs are two such cases in which ‘formalities’ appear. In the case of wills, the need for two witnesses to be present at the time of the will-maker’s signature prevents the use of electronic signatures.
In the case of LPAs, there is a need for a person to witness the signature of the maker of the LPA and the signature of the appointed attorney(s). This ‘formality’, to date, has prevented the use of electronic signatures. The use of wet signatures and the formalities of witnessing are important steps in protecting clients from abuse.
However, the use of multi-factor authentication, biometric data and secure digital signatures could provide safety measures against abuse and allow documents to be signed safely in an electronic format.
For those of you that have already put in place LPAs, you will be aware of the delays encountered at the OPG when it comes to the registration of LPAs. In my experience, the current time frame for registration is around 16 weeks.
Whilst the digitalisation of the registration process may be time-saving for clients, this needs to be balanced against the risks of fraud and coercion that could be encountered if LPAs are able to be prepared, drafted and signed in a purely digital world.
The role of a physical witness would be replaced by video witnessing or removed altogether. A witness helps to ensure the maker of the LPA is not under any undue influence from attorneys or other parties. It remains unclear how this necessary safeguard would be replaced in a digital world.
The Law Society has also commented on the potential lack of access to legal services for those who are not digitally literate if the process became digitalised, which in my opinion is a very real concern given the (incorrect) stigma that LPAs are most appropriate for the elderly generations in society who may not be as technologically literate as others.
That being said, in an ever more digitalised world, it seems sensible to update the process of creating an LPA. However, improving the time for registering and making an LPA and lower costs must not take precedence over the safeguards that exist to minimise the chances of abuse or fraud.