Clamping down on abuse of Powers of Attorney

The independent South Australian Law Reform Institute (SALRI) based at the University of Adelaide is recommending changes to South Australian law and practice regarding Powers of Attorney.

SALRI’s report, handed to the Attorney General today, Tuesday 19 January, makes a suite of recommendations which aim to both promote the use of Powers of Attorney, more formally known as Enduring Powers of Attorney (EPAs), and to prevent their abuse. These include:

• 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.

EPAs 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, in the event that the principal loses that capacity.

“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.”Dr Sylvia Villios, South Australian Law Reform Institute

There has been extensive concern over recent years over the financial abuse (including the abuse of EPAs) of vulnerable adults including both older persons and persons with a cognitive impairment. SALRI had many examples presented to it in its wide consultation where EPAs have been abused in South Australia in which attorneys have acted against the interests of the 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,” says the Director of SALRI, the University of Adelaide’s Professor John Williams.

“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.”

“There are many benefits of an EPA. 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,” says Deputy Director of SALRI, the University of Adelaide’s Dr David Plater.

“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. However, there must be a balance between addressing and preventing abuse whilst 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.”

SALRI’s report follows community consultation in 2020 in regional SA and via the YourSAy website which attracted extensive interest from the community, interested parties and the media.

“Misuse of EPAs is, distressingly, far from unknown in South Australia,” says the report’s lead author, the University of Adelaide’s Dr Sylvia Villios.

“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. 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.”

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, and the last review was in 1981.

Following the release of SALRI’s report by the Attorney-General, it will be for the South Australian Government and Parliament to consider the recommendations, and to decide whether or not to accept them.