Abuse of Powers of Attorney under the spotlight

In the face of increasing concerns about the abuse of Powers of Attorney, legal experts are asking for submissions as part of their review of existing South Australian law.

The independent South Australian Law Reform Institute (SALRI) based at the Adelaide Law School, University of Adelaide, wants to hear from everyday South Australians as well as legal experts, and medical and allied health professionals.

“We are hoping to identify the problems or concerns with the current law regarding Powers of Attorney, gather the views of the South Australian community about how the law could be improved and we will consider alternative options implemented in other Australian jurisdictions,” says Director of SALRI, the University of Adelaide’s Professor John Williams.

Powers of Attorney (POAs) – more formally called Enduring Powers of Attorney – are legal documents which allow an individual (known as a principal) to confer authority upon another person (their attorney) to make financial decisions in accordance with the individual’s values, preferences and directions.

“The effect of financial impropriety on a principal’s financial security can be a permanent and life-threatening setback.”Dr Sylvia Villios

“Powers of Attorney provide a mechanism by which individuals can control their future and have been described as ‘an important expression of autonomy’,” says Deputy Director of SALRI, the University of Adelaide’s Dr David Plater. 

POAs enable principals to choose to appoint a trusted person in anticipation of losing decision-making capacity and take affect at the point at which the principal loses that capacity.

These laws are contained in the Powers of Attorney and Agency Act 1984 (SA) (POA Act) and aim to ensure that vulnerable people – often older people – are protected under law, and to prevent financial abuse.

“Powers of Attorney are excellent tools for planning ahead for later life and their benefits outweigh the risks. But while originally designed with good intentions in mind, this law can now have unwelcome results in practice,” says lead author, the University of Adelaide’s Dr Sylvia Villios.

“Instances arise where the principal lacks decision-making capacity, and the attorney abuses their role to receive an ‘early inheritance’ or otherwise misuses the principal’s funds. Examples include draining bank accounts or transferring the family home into the attorney’s own name

“The effect of financial impropriety on a principal’s financial security can be a permanent and life-threatening setback.”

SALRI will examine whether attorneys who abuse and misuse their powers in this manner face appropriate civil or criminal punishment that is sufficient to deter potential offenders.

“An important issue that is raised is the concept of legal capacity as once it is determined that the principal is incapacitated, their attorney has the authority to act under the Power of Attorney. It is at this point that many of the principal’s fundamental rights may be taken away from them,” says Dr Plater.

“When assessing capacity, the principal’s rights must be protected. Protecting the rights of the principal will be the focus of SALRI’s review of the current law.”

People interested in making a submission have until 4 September 2020 to give their feedback via the yourSAy website which also includes further background and fact sheets.

Subject to the lifting of COVID-19 restrictions prior to August 2020, SALRI also hope to host community roundtable consultations in Adelaide, Berri, Mount Gambier, Port Lincoln and Port Pirie. Details of these roundtables will be available on the yourSAy website, as well as advertised in local papers and community radio, and on the SALRI website.

SALRI will consider submissions and provide a report to the South Australian Government by the end of 2020 with recommendations about how the law can be improved.