EFFECT OF MENTAL INCAPACITY ON POWERS OF ATTORNEY ETC. (Hansard, 17 October 1990)

§ Lord James Douglas-Hamilton
I beg to move, That the clause be read a Second time.

§ Mr. Speaker
With this it will be convenient to discuss the following: New clause 8—Further provisions as to judicial factors—
'.—After section 35 of the Judicial Factors Act 1849 there shall be inserted the following section— 35A—(l) Subject to subsection (5) below, where an individual grants a factory and commission or power of attorney which includes a declaration of intention to which this section applies, the factor and commission or power of attorney shall not be revoked only by reason of any subsequent mental incapacity. (2) This section applies to a declaration of intention which is in the prescribed form and includes a statement that the granter intends the factory or commission or power of attorney to continue despite any subsequent mental incapacity of his, provided that—

(a) the factory and commission or power of attorney has been subscribed by the granter and attested by two witnesses before a notary public and has been registered in the Books of Council and Session or in the books of the appropriate sheriff court of the sheriffdom in which the granter habitually resides;

(b) the notary public has made a statement in the prescribed form that the granter has read or has had read to him prescribed information explaining the effect of the declaration; and

(c) the granter has sworn or affirmed before the notary public that the declaration was made freely and without coercion of any kind.

(3) In subsections (1) and (2) above 'mental incapacity' means, in relation to a granter, that he is incapable of managing his property and affairs by reason of mental disorder. (4) 'Mental disorder' has the same meaning as in section 1 of the Mental Health (Scotland) Act 1984. (5) A factory and commission or power of attorney which includes a declaration of intention to which this section applied shall be revoked by appointment of a curator bonis or tutor-dative and may be revoked on application to the court by any person having an interest. (6) In this section—

(a) 'prescribed' means prescribed by regulations made by the Secretary of State:

(b) 'the court' means the Court of Session or the sheriff court".'.

Government amendment No. 108.

§ Lord James Douglas-Hamilton
New clause 8 in the name of the hon. Member for Glasgow, Garscadden (Mr. Dewar) and new clause 21 have similar aims. They seek to overcome a problem faced by an increasing number of families where a relative, who has granted a factory and commission or power of attorney, subsequently becomes mentally incapacitated. In Scotland, unlike England and Wales, a power of attorney terminates if the granter becomes mentally incapacitated. A curator bonis could be appointed, but in view of the costs involved, a curatory is not usually considered worthwhile except for fairly large estates.
New clause 8 mirrors for Scotland provisions in the Enduring Powers of Attorney Act 1985 which apply to England and Wales, but the simpler provision in new clause 21 will achieve the same end. It will ensure that, after the commencement of the provision, any existing rule of law by which a factory and commission or power of attorney ceases to have effect in the event of the mental incapacity of the donor shall have no effect. Mental incapacity is as defined in section 1 of the Mental Health (Scotland) Act 1984.
The provisions will apply only to powers of attorney granted after the provision comes into force. It does not seek to alter the effect of powers of attorney already granted, nor does it revive powers of attorney that have lapsed because of the mental incapacity of the donor. In the former case, the granter can revoke any existing power and grant a new power.
Amendment No. 108 seeks to ensure that the new clause will come into effect as soon as possible—that is, on commencement of the Act. New clause 21 is sufficient to achieve the objectives sought by the hon. Member for Garscadden. It has been deliberately kept simple, since the Law Commission intends to publish later this year a discussion paper on powers of attorney and other matters relating to guardianship of the adult incapacitated.
It may turn out that, on the basis of the commission's consultations, and a more wide ranging consideration of the matter, a different solution to the problem may emerge. Accordingly, I ask hon. Members to recognise that it may be necessary to return to the subject when the commission issues its report and recommendations. In bringing forward the new clause we recognise that a social need exists which should be met now, and new clause 21 is sufficient to achieve that end. Therefore, I ask hon. Members to accept new clause 21 and amendment No. 108, and I ask the hon. Member for Garscadden to withdraw new clause 8.

§ Mr. Dewar
I have no difficulty about falling in with the Minister's request on this occasion. I do not always think that a shorter clause is a better clause but there is no doubt that we are attempting to obtain the same result and I am perfectly happy to take the Minister's word that his new clause encompasses the meaning more conveniently. It is an admirable means of curing a difficulty, which, as he fairly said, has faced many families who unfortunately, have had to deal with the situation where a close relative no longer has the faculties to look after his or her affairs. It is right in those situations—in a sense anticipated, because a power of attorney has been granted—that the power of attorney should run on and allow the proper administration of that person's affairs. I am glad that the Minister has acted to achieve that. I welcome his new clause, and will not press new clause 8.

§ Dr. Godman
I, too, welcome new clause 21. Will the Law Commission, as part of its brief, comment upon the code of practice which was produced under the auspices of the Mental Health (Scotland) Act 1984? I ask that question because I am fairly confident that neither the House nor the Scottish Grand Committee has ever had the opportunity of scrutinising the workings of that important Act.

§ Lord James Douglas-Hamilton
The remit is for the Law Commission to consider later in the year matters relating to the guardianship of the adult incapacitated. In so far as the code relates to this, it would be perfectly competent for the Commission to comment on it as it so wished.