The Financial Conduct Authority (FCA) has recently suggested that Lasting Powers of Attorney should be granted online, removing the need for “wet” signatures. The idea is that this should make Powers of Attorney easier to apply for. The FCA made the proposal in a paper about improving financial services for the elderly, which was published on 20 September 2017.
We are living in the 21st Century and the technology is certainly there to make this a reality. There are no doubts about the advantages in using digital signatures for formalising contracts. Convenience and increased speed of processing is the major factor.
However solicitors up and down the country have expressed concerns over the proposed changes. The proposals do not explain in detail how the online process will work, and what safeguards, if any, against potential abuse will be put in place.
As things currently stand, it is necessary for the person making out the Power of Attorney, referred to as the “donor”, to physically sign the document. That signature needs to be witnessed by an independent person. The document also needs to be formally signed off by a “certificate provider”, usually a solicitor, who confirms that the donor has had everything explained to them and they fully understand the powers they are granting. This is an important safeguard for donors. Involving a solicitor also ensures that the donor has not been subjected to any undue duress in granting the powers.
Solicitors for the Elderly, an independent national organisation of lawyers who provide legal advice for older and vulnerable people, of which Price Slater Gawne is a member, has criticised the proposed changes as “reckless in its disregard for the potential for financial abuse”.
Some may consider the legal profession’s criticism of the proposals to be unwelcome. After all, LPA forms are lengthy, difficult to complete and getting everything signed by all the required parties in the correct order can be a real bore! However it is worth pointing out that an LPA confers wide-ranging powers on attorneys.
From the moment of registration, attorneys can make important and life changing decisions on the donor’s behalf. The potential for abuse is great and could be made worse by the simplicity of an online process which reduces the creation of a Lasting Power of Attorney to a commoditised product. This in turn is likely to see an increase in cases where fraudsters and unscrupulous family members are taking advantage of vulnerable elderly people. For these reasons we feel that physical signatures and witnesses should be here to stay.
If you would like to make a Lasting Power of Attorney, our specialist solicitors are here to give you all the guidance you need. Please call 0161 615 5554 today.