Attorney Negligence
A Power of Attorney is a deed, giving one person (the ‘donor’) the power to act on behalf of another person (the ‘donee’). The power can be restricted to a particular purpose, or it can be general, which means it is unrestricted.
There are three types of Power of Attorney:
1. A General Power of Attorney (Powers of Attorney Act 1971) gives a power ‘to do on behalf of the donor, anything which he can lawfully do by an attorney’ (S10). General powers are very useful in a commercial context or for sales of land where the donor is not available to sign the contract or transfer deed.
2. An Enduring Power of Attorney (‘EPA’). The difference between an EPA and a General Power is that an Enduring Power makes specific provision for the continuation of the Attorney’s power where the donor has reason to believe that the donee is becoming incapable of managing their own financial affairs. If this happens, the donee has an obligation to give notice to the donor and to certain relatives, and to apply to the Court of Protection to register the EPA. This ensures that the donor’s financial affairs continue to be looked after once they have lost capacity.
From 01 October 2007 no new EPA’s may be created, though those in place before that date are still valid. EPA’s are very popular within family relationships, often allowing a son or daughter to look after a parent’s financial affairs, but they are also common where there is a professional/client relationship concerning the donor’s property and affairs.
3. A Lasting Power of Attorney (‘LPA). Since 01 October 2007, LPA’s have replaced EPA’s as the way of appointing an attorney where it is intended to continue once the donor has lost capacity. Unlike an EPA, the LPA must be registered before it can be used for any purpose. Also unlike an EPA, (which concerns property and financial affairs), and LPA can be used for decisions relating to personal welfare, including their health and medical treatment.
An Attorney occupies a special position of trust (called a Fiduciary Duty) which imposes numerous duties on him to ensure that the donor’s best interests are protected. These duties apply as soon as the Power is used. These Duties overlay any other form of Duty deriving from any other source, such as the relationship between a Professional and their client, though in these cases, a Professional will be held to the standard of competence that befits his Profession.
Where an Attorney acts in Breach of Duty, he will be liable for any losses caused to the done as a consequence, though the remedies available go beyond mere damages and can also include setting aside a contract entered in breach of trust, restoration of property, and/or an action for an account of any profits made by the Attorney in Breach of Trust. If the Attorney happens to be a Professional then a Breach of Duty claim will often go hand in hand with a Negligence claim.