Registration of enduring documents

5.14       While enduring appointments are a beneficial tool in advanced planning for a possible loss of decision-making ability, they do create risks of financial abuse—the most common form of elder abuse.^[22]  In its 2016 report on Elder Abuse in New South Wales, the Legislative Council, General Purpose Standing Committee No. 2 (NSW Parliamentary Committee) noted that:

It is perplexing that such powerful documents are not registered anywhere; that there is no formal record of those that have been activated and those revoked. A register would rightly enable solicitors, banks and others to check the authenticity of an instrument or to track one down and would also send the signal that these are documents to be taken seriously. It thus seems clear that mandatory registration would deliver greater safeguards against financial abuse.^[23]

5.15       Accordingly, the ALRC proposes an online register of enduring documents as well as court and tribunal orders for the appointments of guardians and financial administrators and/or managers.^[24]

5.16       The online registration scheme should be user-friendly and low cost.^[25] Privacy is also a key issue and access to information on the register should be restricted.^[26]

5.17       The register should include enduring documents that have been made but are not yet active because the principal has decision-making ability. In addition, the register should include enduring documents that are ‘live’, that is, active because they commence on signing or because it has been appropriately confirmed that the principal no longer has decision-making ability in relation to a particular type of decision (e.g financial matters). The identification of both made and live documents offers an opportunity to review decisions as to loss of decision-making ability.

5.18       The register would extend to guardianship and financial management orders made by a court or tribunal. It is not proposed that registration would impact the validity of court or tribunal orders.

5.19       ‘Advance care directives’ should not need to be placed on the new register, because it is already possible to add ‘advance care directives’ to an electronic health record—the online recording and storage of individual medical records called ‘My Health Record’.^[27]

5.20       The proposal is limited to enduring powers of attorney and not applied more broadly to non-enduring powers of attorney. The distinction between the two is drawn, first, because of the link between enduring documents and planning for later life. Typically, planning for the later stage of life includes planning for the potential loss of decision-making ability and protecting oneself from abuse. This has been explained as follows:

A particularly attractive strategy for attempting to ameliorate the impact of loss of capacity is promotion of pre-emptive or anticipatory recorded decisions, such as advanced health directives and, more broadly, enduring powers of attorney. Through these legal tools, a person who still has legal capacity (the principal) can record his or her wishes for management of their healthcare, welfare and finances and appoint a decision-maker to act on his or her behalf in accordance with those wishes in the event of loss of that decision-making capacity, either as a result of short-term trauma, or longer-term cognitive impairment such as dementia.^[28]

5.21       Non-enduring powers of attorney are used more widely, and there is no specific link with older persons. For example, a general power of attorney may be signed when a person goes overseas for an extended holiday, in case documents need to be signed while they are away.

5.22       Secondly, there appears to be less evidence of general powers of attorney being abused.^[29] The key safeguard available in respect of general powers of attorney is the ability of the principal to revoke the power at anytime. With an enduring document, a principal with diminished decision-making ability may not be able to effectively monitor the activities of their attorney and take action before significant loss is incurred. Accordingly, there is significantly greater risk of loss and the losses may be larger.

5.23       While much of the focus of stakeholders was on financial abuse facilitated through an enduring power of attorney, stakeholders also discussed abuse of enduring document by enduring guardians. There was also evidence that third parties sometimes simply did not know of the existence of an enduring guardianship arrangement, which led to the older person’s choice of representative not being respected.^[30] For these reasons, it is proposed that enduring guardianship appointments should also be registered.

5.24       The successful implementation of a register will require effective transitional arrangements to ensure that existing instruments remain valid for a prescribed period, with an option for them to be added to the register. Awareness raising and education around the need for existing documents to be registered will be required during the transition period.

Enduring documents may be abused

5.25       The idea of a register for enduring documents is not new. In recent years there have been a number of reviews by state and territory bodies that have recommended the establishment of a register of enduring documents to protect against misuse.^[31] For example, in 2016 the NSW Parliamentary Committee noted that:

These instruments (enduring documents) fundamentally rely upon an attorney honouring the significant trust placed in them by the principal. It is therefore critical to the integrity of the enduring power of attorney system that the law does all it can to safeguard that trust …^[32]

5.26       Ms Breusch explained to the NSW Parliamentary Committee that:

it is too easy for an attorney to become a rogue attorney and not have any checks made until things have gone a long way wrong … The idea is that it [a register] would allow an easy check to see who has been appointed but it would [also] allow someone to record a revocation. At the moment a revocation just takes place by individuals, the previously appointed attorney, in writing saying that their power has been revoked. If we do not know their address there is no certainty that person receives it which means that is also complicated.^[33]

5.27       In Equality, Capacity and Disability, the ALRC recommended that the Australian and state and territory governments develop methods of information sharing about substitute decision-maker appointments including enduring attorneys and guardians. In particular, the ALRC noted that information sharing could take the form of an online register of appointments.^[34]

5.28       The ALRC also received a broad range of submissions to this Inquiry supporting the establishment of a register.^[35] Those submissions are replete with examples of abuse of enduring documents.^[36] There are three factors that appear to support abuse:

• principals with diminished decision-making ability have limited ability to monitor the activities of their attorney;

• family members are most commonly appointed as attorneys and this relationship of trust makes it less likely the principal and third parties will question the actions of attorneys; and

• there is generally a limited understanding in the community of the powers and duties of the attorney.^[37]

A register would reduce abuse

5.29       Registration would assist in ensuring that enduring documents are operative only in circumstances genuinely authorised by an older person, upholding choice and control. The establishment of a register would:

• ensure that only one enduring document can be registered at any one time;

• enable the easy identification of documents that are live (that is active because they commence on signing or because it has been appropriately confirmed that the principal no longer has relevant decision-making ability); and

• provide clarity as to the precise roles and powers of the attorney.

5.30       The Eastern Community Legal Centre submitted that a register ‘will help minimise the extent to which these documents are misused, forged or amended without consent or knowledge of the older person and their families. It will also be helpful in cases where the original document has been lost or destroyed.’^[38]

5.31       This view was been supported by academics who have noted that:

Registration has become popular as a way of ensuring the effectiveness of enduring powers of attorney as a vehicle for recording a principal’s wishes. A common issue arising is confusion in determining whether a valid enduring power of attorney exists and, if so, who the appointees are and what are the wishes of the principal the instrument reflects.^[39]

5.32       In relation to providing specific protection against abuse, a register would prevent:

• an attorney attempting to rely on an enduring document that has been revoked; and

• an individual attempting to arrange a subsequent enduring document in circumstances where there is a question as to the decision-making ability of the principal.^[40]

5.33       Seniors Rights Victoria submitted that:

an attorney could potentially purport to rely on the original document to exercise powers that have since been revoked. In the absence of the revocation document, a certified copy of a POA document could still be purported to be evidence of a valid POA although it is a clear abuse of power.^[41]

5.34       Another potential value of registration was highlighted by a number of submitters, including Legal Aid (ACT)—‘[c]ompulsory registration of powers of attorneys may assist in preventing elder abuse, as it may alert attorneys to a further level of oversight required in complying with their duties and responsibilities.’^[42]

5.35       In addition, a register may have broader benefits than simply protecting an older person from abuse. The Eastern Community Legal Centre noted that:

Registration would allow authorities such as hospitals, banks, lawyers and aged care facilities to verify documents that are presented to them.

A consequence of the private nature of such instruments is that upon presentation of the instrument to a third party such as a bank or aged care facility, the third party has no way of confirming that the  instrument is valid and has not been subsequently revoked.^[43]

5.36       Registration would assist banks and other financial institutions, organisations, companies and service providers to establish the authenticity and currency of enduring instruments more easily. This may protect against financial abuse and also facilitate transactions where difficulty in confirming the authenticity of an enduring document has delayed property transactions unnecessarily. As the University of Newcastle Legal Centre observed:

it would be in the interests of those being asked to rely upon the authenticity of appointing documents, if there was the ability to confirm the authenticity of the document (in particular any institution or individual being asked to release an asset on the basis of a power of attorney document, would likely be keen to gain confirmation that the document they are presented with is genuine).^[44]

5.37       The financial services industry was strongly in favour of a register of enduring powers of attorney.^[45] The Australian Bankers’ Association (ABA), which has long advocated for a register, submitted that:

our member banks have noted an increased use of formal arrangements and the number of substitute decision making instruments being presented by third parties. This includes power of attorney appointments and appointments of financial managers by the relevant State Civil and Administrative Tribunal. The industry is concerned that the ageing population in Australia will mean that the use of formal arrangements is only likely to become more prevalent.^[46]

5.38       The ABA also said that the registration of enduring documents and their revocation would allow financial institutions and others to ‘more easily establish the authenticity and currency of the instrument.’^[47]

5.39       A register would also assist hospitals and health care professionals to identify quickly whether a patient had appointed a substitute decision maker and then contact that person.

5.40       The ALRC also proposes that guardianship and financial administration orders should be added to the national online register. Currently, when a guardian or administrator moves interstate they must apply to the tribunal in their new state for the order of appointment in their old state to be recognised.^[48]  In NSW, for example, only the appointed guardian or financial manager can apply for recognition of the appointment.^[49] In consultations, the ALRC heard of situations where a person is taken interstate by family members, ‘beyond the reach’ of a guardianship order. In this set of circumstances, the family is unlikely to register the pre-existing order, and may apply for a new order without reference to the current standing appointment.  The national online register should prevent a person from making any new applications in a new jurisdiction.

International perspectives

5.41       The law of England and Wales provides that enduring documents must be registered under the Mental Capacity Act 2005 (UK).^[50] Scotland also introduced compulsory registration of enduring documents in the Adults with Incapacity (Scotland) Act 2000 (Scotland). In Ireland, enduring documents must be registered before they can be activated—that is, at the time of the loss of decision-making ability and not at the time they are made.^[51] In each of these jurisdictions there is evidence that registration has assisted in confirming:

• the existence of an enduring document;

• the identity of the attorney; and

• that it has been appropriately verified that the principal has lost decision-making ability and that the attorney therefore has authority to make decisions for the principal.^[52]

5.42       In these respects, there is evidence that this has reduced the instances of enduring documents being used to facilitate fraud against older persons.^[53] The English and Scottish models, that require registration once an enduring document is made, are preferable as such an approach provides two opportunities to check the validity of the instrument: at the time of making and at the time that powers come into force.

5.43       Evidence from the UK also suggests that awareness raising, particularly around the value of putting in place enduring documents as part of advanced planning for possible loss of decision-making ability, is integral to the success of a registration scheme. In addition, keeping costs low and ensuring that forms are short and easy to complete are important in increasing people’s ability and willingness to register enduring documents.^[54]

Arguments against a register

Efficacy of a register in reducing elder abuse

5.44       While there have been a number of reviews supporting a register of enduring documents, there have also been a number of bodies that have recommended against its establishment.^[55] 

5.45       For example, in 2010, the Queensland Law Reform Commission did not recommend establishing a compulsory registration scheme noting that:

there are likely to be limitations on the extent to which a registration system can ensure the essential validity of a registered instrument. In particular, a registration system cannot necessarily detect fraud or abuse. … The Commission has therefore concluded that the burdens of a mandatory registration system would likely outweigh its benefits.^[56]

5.46       Similarly, in this Inquiry, the Law Society of NSW strongly opposed a register for a number of reasons, including questions as to its efficacy in preventing financial abuse of older persons:

While a register may have the benefits envisaged in identifying persons holding powers of attorney, the Law Society of NSW is not persuaded that this, in itself, would operate in any practical or effective way to prevent, or affect, the incidence of elder abuse.^[57]

5.47       The ALRC recognises that a register will not entirely prevent financial abuse by attorneys acting under an enduring document, but considers that more easily identifying and confirming who has power under a valid enduring document may assist in reducing abuse where there is a question as to who is the attorney or guardian.

Chilling effect

5.48       A second argument against a register was explained by Capacity Australia as a ‘chilling effect’. Capacity Australia suggested that a register would discourage use of enduring documents leading to ‘an increase in the inappropriate misuse of elderly persons’ money’ and more court and tribunal financial management orders being made.^[58]

5.49       Capacity Australia recognised that enduring documents are an important tool in protecting those with diminished decision-making ability from abuse, but expressed concern that any reduction in the use of enduring documents could put more people at risk, as a significant proportion of abuse occurs in the absence of enduring documents.

5.50       The potential issue of a ‘chilling effect’ could be addressed by ensuring that the register is easy to use and that it is a simple and quick process to register, revoke and change status on the register. It should be possible for solicitors and other suitably qualified professionals to manage the registration process on behalf of a principal and their attorney.^[59]

Cost

5.51       The cost of registering an instrument may also deter some people from entering these arrangements. State Trustees Victoria submitted that ‘there would probably need to be community acceptance that such an agency would have to charge a fee for registration to ensure the agency [managing the register] was appropriately resourced.’^[60]  

5.52       In those states where a power of attorney must be registered with the land titles office if it is to be used as part of land transactions, the fees are relatively high.^[61] The fees in Tasmania, where registration is compulsory, are of a similar amount.^[62] In most states and territories, the processes for registration requires manual submission and processing of the enduring document. Lower cost models for registration should be considered.

5.53       One such model is the Personal Property Securities Register (PPSR), which was introduced in 2012. The PPSR is a national online register which replaced Commonwealth, state and territory government registers for security interests in personal property, including those for bills of sales, liens, chattel mortgages and security interests in motor vehicles as well as the Australian Securities and Investment Commission’s (ASIC) Register of Company Charges. The PPSR is an easy to use online register and has relatively low fees while operating on a full cost recovery basis.^[63] The cost of searching the register for individuals is $3.40, the cost of registering a security interest depends on the type of interest and its duration, but can be as low as $6.80 and up to $119.00.^[64] There is no charge for removing a security interest.^[65]

5.54       ADA Australia suggested that enduring documents could be added to My Health Records, which currently provides for online storage of medical records and, from 2016, ‘advance care directives’. In order to encourage use of the online storage of medical records, the scheme is currently free. There may be similar public policy imperatives that support free registration of enduring documents.^[66]

5.55       In any event, the hardware and software from the My Health Records system may provide useful models for a register of online enduring documents particularly in relation to safety and privacy standards. Notwithstanding this, the ALRC considers that enduring documents should be kept separate from medical records and advance care directives, as enduring documents will be available to a broader range of organisations including banks and financial institutions.

5.56       Cost is an important issue and the implementation of the register should proceed on a low cost basis so as not to discourage the use of enduring documents.

Privacy

5.57       The uploading of enduring documents onto a register raises privacy concerns. Currently decisions about enduring appointments and assessments of decision-making ability are not publicly recorded. State Trustees Victoria suggests that ‘creating a public register of such [enduring] documents presents significant privacy and confidentiality issues. For example, it will become a matter of public record that a particular individual lacks capacity to manage their own affairs.’^[67] 

5.58       The principal should be able to decide which individuals (as opposed to organisations) may access the register with respect to their enduring document (eg specified family members). More broadly, a level of privacy can be maintained by restricting access to the register to authorised people and organisations. The ALRC is interested in hearing from stakeholders regarding who should have access to the register. For example, searching the register could be restricted to authorised people and organisations such as: Courts and Tribunals; the Aged Care Assessment Services (ACAS); the Royal District Nursing Service; Police; Ambulance; banks and other financial institutions; State Trustees; hospitals; Medicare; Centrelink; insurance companies; aged care facilities; medical practitioners and legal practitioners.

National register

5.59       Given that enduring documents are made under state and territory laws there is an issue as to whether the register should be a single national register or separate state and territory registers. There was strong support in submissions that, if there were to be a register, it should be a single national register. The Australian Association of Social Workers stated that ‘[w]e support the idea of a national register. Such a register would require national consistency and transferability, and should include national accessibility.’^[68]  This was supported by ADA Australia who submitted that a register ‘needs to be national, not state-based, and searchable by services that operate remotely and after hours (such as health services).’^[69]

5.60       The NSW Parliamentary Committee noted that a mandatory national register would also provide an incentive for the states and territories to move towards uniformity in legislative regimes for enduring documents. The NSW Parliamentary Committee noted that:

the complex issue of a mandatory national register of enduring powers of attorney instruments is best considered as part of the Australian Law Reform Commission’s inquiry into protecting the rights of older Australians from abuse, and following that, by COAG.^[70]