HL Deb 27 January 2005 vol 668 cc1395-432

11.32 a.m.

The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee. — (Baroness Ashton of Upholland.)

On Question, Motion agreed to.

House in Committee accordingly.


[Amendment No. 28 not moved.]

Clause 7 [Payment for necessary goods and services]:

Lord Goodhart moved Amendment No. 29: Page 4, line 36, at end insert— ( ) A contract may be rendered void through the county court when it is demonstrable that a person lacked capacity to understand the contract when they made it or lacked capacity to meet their obligation under that agreement (or both).

The noble Lord said: These amendments have been proposed by the CAB, which is concerned with the number of cases in which businesses have entered into contracts with people who lack capacity, and those contracts were unduly disadvantageous to those people. At present, under English law, though not under the law of Scotland, a contract entered into by a person lacking capacity can be set aside only if the other party to that contract was aware of the incapacity. The CAB amendments alter this, and it wants to apply to England the rule in Scotland, which is that a contract can be set aside on grounds of incapacity even if the other party to the contract was not aware of the incapacity.

There are two particular sets of circumstances in which a change of law of this kind ought to apply: first, if goods or services are supplied, even at a fair price but those goods or services are inappropriate for the requirements of the purchaser. For example, a person suffering from manic depression may, during a manic phase, buy things that are not needed by them and are not appropriate to their lifestyle. The CAB briefing refers to the purchase of a yacht, and I mentioned at Second Reading the purchase of enormous cowsheds for a farm that was far too small to be able to make use of them. In cases of that kind, it would be reasonable to say that the contract can be set aside at least before the providers of goods or services have changed their position to their detriment in reliance on it. For example, if someone lacking capacity buys an expensive new car from a dealer who has it in stock, and before delivery of the car the contract is set aside, the dealer is no worse off than if the contract had never been entered into. I accept that it is a more difficult situation for the contract to be set aside after delivery, particularly, for example, if the buyer of the car has caused damage to it.

The second set of circumstances where it is plainly justifiable to set a contract aside even in the absence of knowledge of lack of capacity, is where goods or services have been provided at an excessive price. Any such contract involves taking unfair advantage of the purchaser. It may not be a case where the purchaser lacks capacity. The purchaser may be gullible, inexperienced, badly advised or close to, but not quite over, the borderline of capacity. In such a case, the provider of goods or services can justifiably be required to accept the rest of the contract being set aside if the purchaser turns out to lack capacity, even if the provider was not aware of that. For example, a case was raised by the CAB of an elderly man who was talked into paying a gardener £ 1,125 for one and a half days work. That was clearly inappropriate, and it would be justifiable to set aside that contract and recover that money even if the gardener in question had done one and a half days' work. The principle applies also to the purchase of property at a substantial undervalue from a person lacking capacity.

These are issues for the civil courts, not for the Court of Protection. I see no need to confine them to the county courts as these amendments do. If it is law in the county court it should be law in the High Court as well. There is a strong case for extending the existing powers to set aside a contract for incapacity of one party where the contract can be set aside without loss to the other party, or where the person lacking capacity has been persuaded to enter into a plainly disadvantageous contract.

Further, the CAB says that under Scottish law, where any contract can be set aside if entered into by a person lacking capacity, that law works satisfactorily, and in general other parties are prepared to accept any consequential losses. We wish to hear the views of the Government both on the application of the full Scottish law and on the more limited alternative suggestions that I have mentioned. I beg to move.

Earl Howe

I add my warm endorsement of these amendments, which are of considerable importance. I suspect, in fact I know, that the Minister needs no persuading on the iniquities of those individuals who exploit confused elderly people by tricking them into making purchases that they do not need, or by overcharging them for goods or services that they have received.

The feature of these amendments that commends them is that they are not "nanny state" amendments. They are better seen as an addition to the legal framework that protects consumers generally, but also more particularly vulnerable consumers. The noble Lord has made a strong, persuasive case for buttressing the rights of consumers who lack mental capacity, because the safeguards in the existing law may not be ones of which they are capable of taking advantage. I agree that the experience in Scotland provides a useful paradigm for what these amendments seek to achieve.

Lord Christopher

I support the amendments as well. Perhaps I see them in a slightly different light in certain respects. To begin with, I see them prospectively as a deterrent for those who may be inclined to take advantage of vulnerable people. The better care agencies would wish to draw to the attention of the people for whom they provide that there may be a strong liability if they do certain things that they should not.

I have discovered that there are very many more such cases than anyone might realise, for the simple reason that, while some are prosecuted, the majority almost certainly are not. That is primarily because of the difficulties of proving fraud. One case in which there was a prosecution, similar to that referred to by the noble Lord, Lord Goodhart, was when a very expensive horse was purchased, a stable yard refurbished and new stables built, all out of the moneys of the elderly person ostensibly being cared for.

In a sense, my final remarks bear on what I said at our first sitting. The provisions as they stand will not help a great deal those who are not yet declared to lack capacity but are none the less seriously vulnerable. As the Bill's passage continues, I hope that we shall be able to fill that gap in it.

Baroness Ashton of Upholland

The noble Earl, Lord Howe, is right that I need no convincing about trying to deal with unscrupulous behaviour, particularly towards elderly people. I have a lot of experience of that. I am grateful to the noble Lord, Lord Goodhart, for raising the matter. I am also grateful to my noble friend Lord Christopher, who raised very particular issues which we will come to in the course of the Bill's passage, but about which I have had the privilege of talking to him at length.

I shall resist the amendments on three grounds, but I do so with the opportunity to talk a little about what else the Government are doing to address the issues raised. I therefore resist the amendments in a spirit of wanting to find the best way to deal with the questions, not saying that the Government are not interested in dealing with them.

As the noble Lord, Lord Goodhart, made clear, there is already a right to challenge a contract in court where one party knew or should reasonably have known that the other party lacked capacity. I am also concerned that, in making the amendments, we might even narrow the grounds for such a challenge, which would be extremely contrary to what the noble Lord wishes to achieve. I pay tribute to the work of the citizens advice bureaux in looking at the Bill with us, and more generally for the support that they give to many people, especially those in such circumstances.

As Members of the Committee know, common law enables a contract made with a person who lacks capacity to be challenged and declared void at the option of that person or their representative, if the other party knew or should reasonably have known that the person lacked capacity at the relevant time. As the noble Lord, Lord Goodhart, said, the only exception is the provision in the Sale of Goods Act surrounding the sale of necessary goods. Those provisions, replicated in Clause 7, ensure that traders can sell and recoup a reasonable price for necessary goods and services to someone who lacks capacity to make the contract. That is to ensure that people who lack capacity can still buy goods and services, to enable them to live independently. That is the purpose behind this part of the Bill. The other side of the same coin is that the provisions also ensure that traders are not discouraged from selling to them. I recognise that the amendments would leave those areas unchanged, but it is important to examine the balance in such aspects of the Bill between enabling people to continue with everyday life and being unable to do so.

Unfortunately, the amendments could also reduce the current scope of protection. An example is where the price is inappropriate. At the moment, any contract can be challenged, even a contract that is entirely fair in its terms. The second and third amendments would require the person lacking capacity to show that goods and services were not necessary, or that the seller had overcharged or undersold, before it could be challenged in the court. We do not want to reduce the scope of protection provided by the current common law—that challenge can be made on any grounds.

The third set of reasons is more complicated. The amendments shift the emphasis from whether the other party knew or had reasonable grounds to believe that the person lacked capacity to the simple question of whether the court believes that the person making the contract had capacity to do so. Under the amendments, if the person lacked capacity, the contract would be void. It does not matter whether the person selling to that individual could reasonably be expected to know that. That is at odds with the principles of the Bill, which empower someone who lacks capacity to make as many decisions as they can. We do not want reputable businesses to shy away from making contracts with anyone they perceive as lacking capacity, and thus for those who lack capacity to be discriminated against.

11.45 a.m.

It is also worth saying that the amendments would have an effect that I am sure is not intended. At the moment, a contract is voidable only if the person who lacks capacity wishes it to be so and if it is determined by the courts that that is right. The amendments would enable the seller to apply to the court to have a contract declared void on the basis of the person's lack of capacity. I am not sure that that is where we want to go, but it would be the effect.

The amendment would place an unreasonable burden on the business concerned. If any contract made with someone who lacked capacity could be void, irrespective of the other party's knowledge or reasonable belief about lack of capacity, there could be increased challenges. I am not sure that it is fair to say that a salesperson at the point of sale—which may not be face to face—would have to estimate whether a person lacked capacity. That is not reasonable.

The Government have approached these important issues through initiatives from my colleagues in the Department of Trade and Industry. I shall briefly set out a few examples, which I hope will allay some concerns raised. Today, we have the first day of Committee in another place on the Consumer Credit Bill. In that Bill, there is a new test of an "unfair relationship", which will enable a court to have regard to all relevant matters in a relationship that seem unfair to the debtor, including issues of capacity. The court can modify or set aside all or any of the rights and obligations in the credit agreement. In those circumstances, the court might find that a relationship was unfair, whether the lender knew that the person had the capacity to enter the agreement or not.

That Bill will also allow a consumer to complain to the Financial Ombudsman Service about a credit agreement if the lender's own complaints service has been exhausted. People who are unable to represent themselves can be represented in making a claim. That Bill also gives the Office of Fair Trading expanded powers of investigation and enforcement to address conduct designed to exploit or harm people, which would include people who lack mental capacity.

Another project under way is the unfair commercial practices directive, which is directed at aggressive or misleading sales practice and should provide a high level of protection for vulnerable consumers. Also relevant is the Government's consultation on doorstep selling, which looked at bogus and exploitative trading practices. We have had 3,000 responses to that, and the NACAB has done huge work on door-to-door selling. We will be bringing forward proposals on the matter.

The issue is of significant concern to the Government. However, the amendments would run counter to the principles of this Bill, and conceivably make it more difficult for people who wished to live their lives independently to be able to do so. I know that that was not the intention. We take the issues raised extremely seriously, but we wish to address them in some of the other initiatives that we have taken forward. Within the way in which the law operates, we believe that we have the balance right in enabling people to live independently while recognising that any behaviour to exploit someone would be understood and dealt with by the courts. On that basis, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Goodhart

I am grateful to the Minister for expressing sympathy with the problems that arise in cases of this kind. However, I am a great deal less grateful for the fact that she is not prepared to do anything about it in the Bill. Quite correctly, she criticised the way in which these amendments are drafted. I have to say that I did not draft them myself, but those points are of course all curable.

Perhaps the noble Baroness's best argument was when she said that she did not want people to back away. I can see that up to a point, and I think that in cases where someone buys an apparently reasonable amount of clothes, there is no justification for penalising the person who sold them on the grounds that the person who bought them was, for example, also buying the same things from several other shops and ended up with far more than he or she needed. But there are also cases involving the sale of very expensive items, such as a car, a yacht, a horse or jewellery and so on, where the person who is selling should certainly have in mind whether there are any grounds for thinking that the person might lack capacity.

This is an important issue. I note that the Minister pointed with some force to the provisions in the Consumer Credit Bill, but if that is sauce for the goose of the Consumer Credit Bill, why is it not also sauce for the gander of the Mental Capacity Bill, and why should not the same kind of principles be applied more widely than to contracts of consumer credit?

This is an issue to which we shall need to return. I shall take away these amendments but I think it likely that I shall bring them back, not in identical form but in a somewhat similar form intended to achieve the same effect but perhaps more efficiently. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 30 and31 not moved.]

Clause 7 agreed to.

Clause 8 agreed to.

Clause 9 [Lasting powers of attorney]:

Lord Goodhart moved Amendment No. 32: Page 5, line 17, leave out "and which includes authority to make such decisions

The noble Lord said: In moving Amendment No.32, I shall speak also to Amendment No. 33. These amendments raise the question of when the lasting power of attorney comes into effect. In fact, the Bill is not nearly as clear on this subject as it should be. The issue is covered by Clause 9(1),which states: A lasting power of attorney is a power of attorney under which the donor … confers on the donee … authority to make decisions about all or any of the following … [the donor's] personal welfare or specified matters concerning [the donor's] personal welfare, and … [the donor's] property and affairs or specified matters concerning [the donor's] property and affairs, and which includes authority to make such decisions in circumstances where [the donor] no longer has capacity". I have some difficulty in understanding exactly what the final words mean. They could be read as meaning that a lasting power of attorney comes into effect only on a donor's incapacity, but they could also be read as meaning that a lasting power of attorney may come into effect immediately or at any other time before the incapacity, provided it expressly states that it is to remain in effect after the commencement of incapacity.

As I understand it—I believe this is made clear by the draft code—the Government intend the latter meaning; that is, that it can come into effect immediately, provided it is stated that it will remain in effect after the commencement of incapacity. But I do not think that the drafting here is very good. It should be clarified.

One has to ask what kind of decision can be taken by the donee of a power of attorney while the donor still has capacity. There are, of course, two kinds of power here: the power to take decisions on personal welfare and the power to deal with property and affairs. I believe that final decisions on the personal welfare of the donor should be taken by the donor so long as he or she retains capacity. So far as concerns personal welfare, a spouse or relative could make arrangements. They could, for example, find suitable accommodation to offer to a donor who is unable to continue living alone, but the final decision in a case of that kind should be for the donor.

On the other hand, a lasting power of attorney could reasonably give a donee authority over the property and affairs of the donor while the donor was still alive. For example, a donor might say to a donee, "I find it too difficult nowadays to make out my tax returns. Can you deal with them?" That kind of transfer of power seems perfectly reasonable. Indeed, that is what the code says is the purpose of the Bill. But nothing in the Bill says that a lasting power of attorney cannot give authority to take welfare decisions while the donor still has capacity to take them himself.

Surely it should be stated in the Bill that, first, a lasting power of attorney cannot apply to welfare decisions before the donor loses capacity and, equally, that the lasting power of attorney can apply to decisions relating to property and affairs before the donor loses capacity. As I said, it is clear from the draft code that that is what the Government intend but it is very far from clear in the Bill that that is their intention, and I think that this is a sufficiently important issue to justify it being included in the Bill. I beg to move.

Baroness Ashton of Upholland

The noble Lord is absolutely right in his interpretation—that is, financial powers of attorney can be used with or without capacity. An example of that is that at present people can and do use enduring powers of attorney when they have capacity. They may feel that they are no longer able to deal with certain things, such as the tax return—I know that feeling. Another example may be where the individual or his family have gone to live abroad but they do not know the country and have appointed an attorney to deal with issues for them in this country. There are many such examples. Or it may be the case of an elderly person who is finding it difficult to handle some investments but is perfectly happy to use his money on a day-to-day basis. The provision is specifically designed to allow that to happen. Those are common occurrences now and we wish them to continue. I think that the noble Lord, Lord Goodhart, is with us on that.

Welfare issues can be included only when a person lacks capacity. Clause 11(6)(a) states that welfare decisions can be taken only where P lacks capacity. So I am not sure that I agree with the noble Lord that that situation is not dealt with in the Bill. But I make it clear that throughout the Committee stage everything that is said will be pored over by me and others to ensure that we capture all the critical points. However, I shall of course look at the language again.

Clause 9(1) does not deal with the point at which the LPA comes into effect; it concerns the fundamental definition of a lasting power of attorney. It must include the authority for when P lacks capacity or it will not be an LPA. We think that the combination of those clauses achieves what we and the noble Lord wish, which is, as the noble Lord said, within the code of practice. They enable flexibility for financial lasting powers of attorney but, for obvious reasons, inflexibility on welfare and other matters. I hope that I have addressed the points raised. I shall check the wording again but that is my understanding. I hope that the noble Lord will feel able to withdraw his amendment.


Lord Goodhart

I am grateful to the noble Baroness. We are entirely agreed on the purpose here. What she has said goes some way towards satisfying my concerns. As this is simply a drafting point, it is unlikely that we will wish to press the matter again. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 33 not moved.]

Earl Howe moved Amendment No. 34: Page 5. line 22, after "registered" insert "and updated

The noble Earl said: I hope that the Committee will allow me to take a few minutes to set out the thinking behind Amendments No. 34 and 46. Their aim is to place on the face of the Bill, and, I hope, to improve, the proposals suggested in a Written Statement by the Minister's honourable colleague, David Lammy, on 10 January. The intention is that the measures contained in the amendments would be of simple, practical assistance to donees, to financial institutions and to the Office of the Public Guardian. There are three issues to address and I shall go through each of them in turn.

First, there is the issue of keeping the register of lasting powers of attorney up to date. There is a widespread view, which I share, that keeping the register up to date will be essential if it is to be of any use in checking concerns about abuse. I welcome the fact that this concern has been acknowledged by the Government, but I believe that there is a case for including a requirement within the Bill that information is kept up to date once an LPA is in use.

To make the system workable there should be a requirement on the Public OPG to confirm receipt of information about the lasting power of attorney and all such confirmations should be presented with the instrument when being used. If a lasting power of attorney is being presented, for example, to a bank and an address has changed, proof that that has been recorded and acknowledged by the Office of the Public Guardian will mean that the bank will not need to conduct its own inquiries.

The second issue I want to flag up is that of establishing a simple method of enabling banks to accept a lasting power of attorney if it is stipulated that it should be used only if the donor has lost capacity. The suggestion that the Minister put forward was that the donor should state that the lasting power of attorney should come into effect only once a general practitioner has confirmed in writing the donor's lack of capacity to manage his affairs.

Unfortunately, that goes only part of the way to resolving the problems that banks will face. It is a helpful suggestion, but it does not cover the waterfront. First, a donor may fail to suggest that particular stipulation, or the stipulation might be one that the banks would not feel they could accept. Secondly, it may mean that banks develop different practices in relation to what they accept and do not accept; for example, how frequently would a bank want to have confirmation of that sort? On an individual decision test, it could mean that they may want confirmation for every single transaction, or other banks may develop systems whereby they want further confirmation of incapacity if the amount to be withdrawn is over a certain amount. One can see all kinds of complications arising.

My view is that these are issues that are best addressed on a national basis by the Office of the Public Guardian. I believe that in such cases it would be desirable for there to be a requirement on the donee to inform the OPG of the proposed use of such a lasting power of attorney and that the certificate of incapacity to manage his financial affairs should be sent to the OPG along with information about any other changes of circumstance. The OPG would then confirm in writing the receipt of that information and it should be presented to the bank with the instrument.

The third issue is establishing when a lasting power of attorney is actually in use. I believe that it is essential that the OPG is aware when registered LPAs are in use. That is essential because of the need to monitor and to gather statistics, but more importantly, it will enable the OPG to send relevant sections of the code of practice to donees at a time when they will have considerable relevance to them. Given that there is likely to be a long gap between registration and the LPA being used, it is likely that donees will need up-to-date information from the code.

In the case of financial LPAs, that would give an opportunity for the OPG to give information to donees about the need to discuss with the bank ways of opening accounts which would allow the donor as much responsibility for his finances as he could manage. That is of particular importance in cases where there are fluctuating conditions or where a donee can manage simple day-to-day transactions, but not large investments.

A simple way of triggering information about the use of the LPA is a requirement on the donee to inform the OPG when LPAs are used for the first time. At the same time, the donee should either confirm that there have been no changes of circumstances since registration other than the capacity of the donor, or should update any other changes of circumstances.

Currently, the proposal is that all registered LPAs should be updated with changes of circumstances. I really have to question whether that is sensible or necessary. It would engage the OPG in unnecessary work that frankly is of little relevance if the LPA is not in any form of use. It is very likely that individuals will forget to notify the OPG of changes of address or marriage if they are not using the lasting power of attorney.

I recognise that in some instances it may not be possible for the donee to have updated the registered instrument at the time when it is first needed. A welfare power of attorney, for example, may need to be used if the donor has suffered an accident and then goes into a coma. In those kinds of cases, I believe that the registered lasting power of attorney should be accepted, even if the information is not up to date, as long as the requirement is met by sending the required updated information to the OPG within 28 days.

I also suggest that where no changes of circumstances have been recorded after the notification of use, it would be helpful for the OPG to send reminders, along with leaflets informing the donee about the code, at five-yearly intervals.

I hope that the Minister will be sympathetic to these proposals, which are designed to encapsulate and build on the idea set out by her honourable friend Mr Lammy. I beg to move.

Baroness Barker

The debate on Monday was one of high moral principle and great oratory. Today is the time to put on anoraks and get down to what I believe are some of the most important aspects of this legislation—the small, mundane things of life. I strongly support the noble Earl in all that he has said. Those who had the misfortune to be on the Joint Committee with me will know that I banged on endlessly about financial abuse.

One of the most shocking pieces of evidence that the Joint Committee heard was from Master Lush of the Court of Protection. We asked whether he could give any indication of how the current system was working. He said that the court, which at the moment does very little monitoring as far as I can see, reckoned that in about 20 per cent of the cases there was some form of abuse. That thought has stayed with me as the proposals have unfolded on lasting powers of attorney.

When the Minister responds, I suspect that she will make much of the fact that registration will be a factor. It is good that powers of attorney will now have to be registered because we know that there are thousands of powers of attorney which are not. In essence, they are almost like private arrangements between individuals.

I suspect also that the word "balance" might enter the Minister's response, because there is, I accept, a question of balance between undue burden and what is fair. I come down on the side of the noble Earl and his proposals for one reason: there is widespread ignorance about powers of attorney, even among people who hold them. Apart from anything else, what the noble Earl proposes will go a long way toward establishing good practices on a day-to-day level.

In discussions that I and others have had, usually with Ministers from the DWP, it is widely acknowledged that in financial affairs the response that one gets from a financial institution to a particular problem of this kind is random. One does not know how an institution will respond to a particular problem. That is not to say that banks and institutions do not respond with great compassion and understanding, but frequently they do so by bending rules and procedures in order to try to make something happen.

On the noble Earl's proposal to keep the register up to date, people live far more transient lives and names change far more frequently than they ever did before. The names of those involved are not necessarily obvious, where either the donor or the donee has married and changed his or her name. Such details need to be kept up to date. There is also the question of enabling LPAs to become "living" documents; ones which are routinely used. Another key point concerns the first use of an LPA.

Those are three fundamental elements to make what is a good proposal work in practice. Both donors and donees find these matters difficult. For all those reasons, I strongly support the noble Earl and I hope that he receives a favourable response.

Baroness Greengross

I have added my name to the amendment in support of the noble Earl because we have been very worried about financial abuse for a very long time. As the noble Baroness said, the amendment puts in the element of balance. So this is feasible, while at the same time being a fairly routine and easy way to protect people against the sort of abuse we really have to do something about. I am very pleased that the Bill will eventually do that.

Lord Christopher

Perhaps I may add one word of caution. I apologise to the noble Earl; I missed the context—it is not important to hear it again—in which he referred to general practitioners. But, from my own experience, to rely exclusively on them in present circumstances is a considerable risk. That is not a criticism of them at all, but they simply are not directly trained or involved in this area—and perhaps they should not be. That is a matter for consideration.

I discussed some of the affairs discreetly with one GP. He was quite appalled to learn of the financial changes taking place, which certainly would never have been known to him simply on the basis of his visiting the patient. I think that one needs to be very careful in that direction.

12.15 p.m.

Baroness Finlay of Llandaff

I would not like noble Lords in any way to pre-empt the Government's response to the amendment, but, on listening to the argument made out by the noble Earl, Lord Howe, it strikes me that there is the potential here for another point of abuse to be picked up and the red flag to occur in a way that may not happen otherwise. The principle behind the amendment is certainly extremely important even if the exact process may not be acceptable at the moment to the Government. The noble Earl has outlined another layer of safety for people.

Baroness Ashton of Upholland

I agree with the noble Baroness, Lady Finlay, that it is important to ensure that we identify points where the red flag goes up and people become concerned. I am very grateful to the noble Earl, Lord Howe, for bringing the amendment forward, not least because I think that he has half my speaking notes and the noble Baroness, Lady Barker, has the other half.

With regard to the amendment, I feel that I would want to look again at what we are doing. Where I differ from what has been proposed is only in the sense of what we put on the face of legislation, how inflexible that can be, what issues should go alongside it, and what is better put in guidance or codes or practice, which, noble Lords will know, I take very seriously because they have statutory force.

Perhaps I may explain to the noble Earl what my concern was about notifying the Office of the Public Guardian before the power was used. I could not see what the point of that would be, in the sense that you might use the power once and then not use it again for 20 years—for example, if it was a financial power, or because somebody had a road accident and it was used at that particular point to support their welfare needs, but then they recovered and that was that for 25 years. I do not see what the Public Guardian could do that would be of help. The noble Earl said that you could send donees the latest information from the code of practice to remind them of their duties and responsibilities. I cannot commit to that—I am going completely off my speaking notes here—but I thought that that was a very interesting point. I am very grateful to the noble Earl for it.

I am not sure how to make that happen, and I am not certain that it needs to be in primary legislation, but I hope that the noble Earl will not mind if I say that that was of great interest to me. I shall go away and think about what we might do.

As the noble Baroness, Lady Barker, said—and I have been more or less in this position—one does not always know what one is doing when given a power of attorney. The more we are able to inform people, the better. So I thank the noble Baroness for that and I shall look at it.

I am not going to make too much of registration. However, the noble Baroness, Lady Barker, is right; it is very important that powers of attorney are registered. In a sense, at the point of registration, a lasting power of attorney becomes a customer of the Office of the Public Guardian. From that point onward any complaints can be investigated and dealt with, whether or not the office has been notified that the power is being used. That is an important difference from the current position. I would not want to loose sight of that as a critical point of contact.

I can see the point about the code of practice, but I cannot see that being notified that the power was being used once would necessarily help. However, as I have said, I shall look at that point.

As the noble Earl said, some financial lasting powers of attorney can stipulate that they are to be used only when the donor loses capacity. We have talked about the certificate of incapacity. I think that there are real issues about that. We have made a commitment—the noble Earl referred to my honourable friend Mr Lammy—about amending the draft code of practice to explain that where a lasting power of attorney contains such a provision, the donor should specify that and specify how the donee will demonstrate that the donor has lost capacity. The code will say that if the donor wants to include this provision within the lasting power of attorney, it will be in his own interest to decide these arrangements in advance.

Members of the Committee have talked about the role of GPs. We are not saying that somebody loses capacity at a positive moment in time, because it does not happen like that, and the Bill has specifically gone away from that premise. I should be concerned about not losing the flexibility that we would want to put into the provision, bearing in mind of course that the vast majority of lasting powers of attorney of all kinds are with those who love the individual and who are loved by the individual.

Yes, we need to be clear about stamping out abuse, but I do not want to be too inflexible. For the moment, I want to put that in the code and allow donors— people such as you or me—to decide, if they only wish the individual to use the power of attorney in financial matters when they have lost capacity to do so, how that will be determined. It may be by a GP; it may be by other means. I am nervous about including that in statute and making the provision even more onerous when this is something that we are keen for people to think about to make provision for the future in safety.

Baroness Barker

I have a great deal of sympathy with the noble Baroness's point about flexibility. I have talked to different people who know that they are ill and will lose capacity, and who, in the absence of the Bill, have sought to make all sorts of arrangements, including having consultant gerontologists sign an agreement with their spouse that they have lost capacity, and so on. Up to a point, I accept her argument about flexibility.

I also accept the good point made by the noble Lord, Lord Christopher: how on earth are GPs to make such decisions, especially in relation to a person's capacity to manage finances? The problem, to which my noble friend Lord Goodhart alluded, is that with nothing at all in the Bill, there is a huge hole. People who want to make powers of attorney do not know where to go or to whom to turn to have an authoritative statement about that fundamental point: that they have lost capacity.

I shall give the noble Baroness an example. An elderly lady had developed Alzheimer's. When a relative found out that a significant amount of money from an officer's war pension was going into her bank account, she suddenly came back from abroad and developed an interest. The person who had been guiding that person's welfare and her GP went to the bank to say, "This money is needed to pay for this person's care. This other person will come in and bring with them this person who lacks capacity. They will probably have got her to sign something, but we ask you not to give them the money". The bank said, "No. We have no authority to stop that".

My point is that it is not just about the wishes of the person with incapacity. How do institutions know who has the authority? That is an old example from many years back, but I have thought about the matter a lot and talked about it with some of the people concerned. For me, on balance, there must be some medical input. It cannot be the only or final input; there must be a structure of decision-making around it that includes representatives of families, and so on; but at some point there must be a definitive marker of whose word can be trusted.

Baroness Ashton of Upholland

I am grateful to the noble Baroness and I understand her example, but what was in my mind while she was speaking was, first, the fact that it will involve not someone walking in with a piece of paper but a registered LPA. The noble Baroness may shrug her shoulders, but the importance of that is that the donor, who could be me, will have made a decision about who they wish to be their attorney. That is critical.

First, this does not involve just someone arriving on the scene; you or I will have made the choice of who we want to be our attorney. Yes, we will put safeguards around that, but the critical factor is that, with capacity, I have made that choice. We should not lose sight of that. Secondly, I will have registered that choice with the Public Guardian, who knows about that choice and can have that choice challenged by another relative who says that that they are really worried about that. The Public Guardian would have to investigate that.

Thirdly, I take the point about banks and financial institutions. Part of the work that we are already beginning in thinking through what we do next is with the financial institutions to consider how we can support them and how they can train their staff better to understand those issues, given that backdrop.

One can argue about when medical intervention should be involved, but in my experience of people losing capacity, there is not one moment when it happens. People lose capacity over time, sometimes in a fluctuating way but, especially over financial issues, they may lose capacity over some things but not others. The reason that I want flexibility is that many people are vesting in someone who loves them the ability to say, "My mum can no longer deal with money. She cannot understand what the money is in her pocket. I can see that, so I need to be able to support her". It does not necessarily always involve a medical intervention of some kind by someone who says that they do not think that the person can deal with money any more.

All I am asking is that we do not make the Bill so inflexible that, first, people will not make these powers of attorney, which is a factor that we must always consider and, secondly, we do not recognise that in the vast majority of cases, people will not be incapacitated in any particular way at any one moment. I take on board what the noble Baroness said and am keen during the course of the Committee to reconsider the safeguards. In many ways, I have no difficulty with what is proposed; my only issue is with what is written in the Bill and what is not. The Committee knows better than I do that when including things in the Bill, we must ensure that, in a sense, we are inflexible—we are clear about what we mean, what sanctions apply and the outcome. From working in government, it is clear to me that what we provide in guidance, the code and advice that we send to people can have a dramatic effect on how people deal with issues.

I take the noble Baroness's example; there are many examples and my noble friend Lord Christopher himself has a story to end most concerning what can go wrong. I am not against that, but I am looking for a balance. Let us be clear. Financial institutions need better training, information and support, yes. Registration is a critical part of that. People will make a considered choice at a point where they have capacity. Incapacity is not an event; incapacity is a process. We must be aware of that. It is mainly about choosing someone who you love and trust. We must keep that balance right. Having said all that, I am of course keen to ensure that we have this right and we will look at it again.

I shall finish by talking a bit about the point about changing circumstances raised by the noble Earl. As I said, that is when I definitely thought that he had got hold of my speaking notes. I agree with what the noble Earl is seeking to achieve. The issue is about how it would work. He himself asked: if there is a moment when you have to send in information, is that the most pertinent point? Again, I am not sure that that is for primary legislation or accompanying regulations.

What sanction would we impose if people do not let us know that they have moved house? If they do not notify us that they have changed their name, but it is clear from other evidence who they are, would we want the LPA to be invalid? Changing circumstances and changing information are important, and I accept that we need to get people to notify changes of circumstance, but the noble Earl himself said that, in many ways, that notification of information may be irrelevant—I hope that I am not misquoting him—to what we are seeking to achieve. We have been trying to enable people to give information under the code of practice but not saying, "You must do this", because there would have to be a corresponding, "If you do not do this, this is what will happen".

12.30 p.m.

I do not think that any Member of the Committee would suggest that in the case of a person moving house or failing to notify that they have changed their name—perhaps because they got married or divorced—where it is quite clear that it is still the same person, the power of attorney should become, somehow, invalid or that there should be a sanction against the person.

I am looking for ways in which we can use the code of practice so that we do not end up with an over-bureaucratic system, which I am not sure is the best use of public money when we need to do quite a lot in that area, or something that needs to provide a sanction with it.

In summary, I am very interested in what the noble Earl, Lord Howe, said about giving people more information when they want to use it and ensuring that the safeguards around that are right. I am very keen to keep flexibility to enable people to make informed choices and to ensure that the institutions, particularly financial ones, receive advice, support and understanding. I recognise that registration is a critical moment and makes the attorney a customer of the Office of the Public Guardian, thereby enabling people to complain, to raise issues and to have them investigated. We will look at how best to retain flexibility for the individual donor and not make it so onerous on the donee that people do not do it.

My contention is that, currently, that is in the code of practice. But, on the basis of what the noble Earl has said about giving people information, I will look at those issues again very carefully and perhaps have conversations outside your Lordships' Chamber. I hope that the noble Earl will withdraw his amendment.

Lord Christopher

Before my noble friend sits down, perhaps she will be kind enough to respond to two questions. The first question relates to filling what I think is probably an inexcusable gap in my knowledge. What will be the legal status of the code of practice? That is not simply my worry; it has been expressed to me by others when discussing the legal basis.

Secondly, did I understand the Minister correctly that members of the family would have an opportunity of objecting where lasting power of attorney was sought? My understanding of the Bill is that the person making the power could nominate those persons who should be told, which might leave out the family altogether.

Baroness Ashton of Upholland

A statutory code of practice means that courts would take it into account. If one departs from a statutory code, one has to give evidence as to why one has departed from it, which gives the statutory code legal force.

My noble friend is correct. The Bill allows the individual to designate who he would wish to be notified about the lasting power of attorney, but that does not prevent anyone from making a complaint to the Office of the Public Guardian, which can decide if it wishes to pursue that complaint.

Earl Howe

This has been an extremely useful debate. I extend my thanks to the Minister, the noble Baronesses, Lady Barker and Lady Finlay, and the noble Lord, Lord Christopher, for having illuminated aspects of those quite tricky questions. At Second Reading, I said that quite a bit of what I wanted to raise in Committee was about balance and clarity, of which this is a classic example.

We will be coming to a series of issues where the question will be: should we amend the Bill or should we be content with something in the code of practice? I agree fully with the Minister that a lot of this could be embodied within the code of practice very satisfactorily. I am not completely convinced, however, that there should be no amendment whatever to the Bill. We really need to look at that issue between now and Report stage.

The Minister will realise that my key concern was that there should be established, recognised procedures, so that the system is workable and universal. I used the banks as my main example in the context of those amendments. From a day-to-day point of view, interaction between the donee and donor's banks will have particular importance. But we do not want different banks to adopt different rules and practices that leave the public bewildered and unclear, which suggests that whatever rules we have should be mandatory if they are to be universal. I am not quite sure that the code of practice, although it will have statutory force, will ensure that all the banks sign up to it and that they do not also add their own rules.

Flexibility is fine, but it can lead to uncertainty. That is the downside of flexibility. Nevertheless, I am grateful to the Minister for all that she has said. I think that we are thinking on parallel tracks even if the tracks are not exactly the same. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe moved Amendment No. 35: Page 5, line 30, leave out "section 4 (" and insert "sections 1 to 4 (the principles and

The noble Earl said: In moving the amendment, I shall speak also to Amendments Nos. 55 and 57. The amendments are quite simple: they are aimed at ensuring that the attorney under an LPA acts in accordance with all the principles outlined in Clause 1. I believe—I am sure that we all do—that attorneys should be aware of the need to consider each of the principles before acting; for example, making sure that the person lacks capacity before making any decision, enabling the donor to make his own decisions where possible, helping the donor to communicate his decision and so on. Although that is implied in the Bill, in the light of my discussions with the Making Decisions Alliance, my feeling is that that should be in the Bill.

Amendment No. 57 makes a proposal that is closely allied to that point. The proposed new subsection would make it clear that financial attorneys are also under the same obligation not to make any decisions for the donor if he can make the decisions for himself, unless the donor has expressly given permission that it can be used prior to loss of capacity. That provision, explicit in the Bill, would serve to focus minds at the time that the LPA is created. More to the point, it would act as an added safeguard to the donor. I beg to move.

Baroness Finlay of Llandaff

I strongly support this amendment. Reinforcing the principles behind the Bill is crucial. One can imagine a situation where someone had powers and his decision-making was influenced by his own experience. We all have fears—sometimes irrational or deep-seated—of which we may not even be completely aware. But such views may alter the way in which we look at something, particularly if it is from someone else's point of view.

On trying to think through the type of decision that could be made, I became concerned that a clinically negligent or irrational decision might be made. It would then be very difficult, unless you were really forcing the person making the decision to go back to the core principles of the Bill, even to be able perhaps to challenge that.

One example that came to mind was a situation concerning someone with a high spinal injury in intensive care, in a coma and unable to communicate in any way. The person making the decision might view that as being so horrendous that when asked for a welfare decision he would go against continuing with all clinical input. But the clinicians may be aware that the condition is in fact spinal shock as opposed to a cord transection and that there may be quite a high chance of recovery. That is an example from my own experience.

However, the general principle will arise in several other amendments because reinforcing the principles in the Bill at every relevant point is absolutely crucial. Again. I strongly support the amendment.

Baroness Barker

I rise to support the noble Earl in his amendment and to speak to Amendments Nos. 55 and 57, to which I have added my name. On Tuesday, I think it was the noble Baroness, Lady Greengross, who talked about decisions that are benign but which are made unnecessarily on behalf of other people. Given that, my reason for attaching my name to these amendments is to highlight why they are needed. A carer for a person who lacks capacity may become so used to making decisions that, while they are clearly in the person's interests, doing so becomes a way of life. Over time, the carer begins to take over decision-making on aspects and activities where the person could be making those decisions for himself.

I hasten to say that I have no wish to undermine carers in any way, but having listened to people with learning disabilities, I know that one of their fears about this Bill—although more so over the original draft Bill than the one before the Committee—is that it will allow others to make on their behalf decisions that they are perfectly capable of making for themselves. This is not easy to quantify, and I shall give the Minister a dose of her medicine by saying that I do not think that we should be too specific—the wording is general in nature. None the less, it is right to include what is almost a form of reminder for decision-makers that they should not be making decisions where it is reasonably clear that the person concerned could make that decision for himself. That would strike a helpful balance in the legislation.

Baroness Ashton of Upholland

I sympathise with what these amendments are trying to achieve. The proposal is very much in line with the spirit of the Bill by placing an emphasis on the principle of best interests, minimum intervention and our insistence on a functional approach to capacity.

We have put the principles right up front and have made it clear that we want them to apply to all acts done and decisions made for people who lack capacity. Attorneys must have regard not only to best interests, but also to the presumption of capacity, the principle of minimum intervention, and the requirements for assessing capacity as set out in Clauses 2 and 3.

Noble Lords will note that we again make specific reference to "best interests" in this clause because that is the guiding principle of the Bill. All decisions made and acts done by attorneys must first and foremost be guided by a regard for best interests. On Tuesday we discussed objectivity within the consideration of best interests that is critical to that way of operating.

The relevant clause already holds that attorneys are subject to the "provisions of the Act" which will make them subject to the principles set out in Clauses 1, 2 and 3. But I am not averse to including additional references to the principles clause. I shall look at this again and consider whether Clauses 1 and 4, covering principles and best interests, do go far enough in their emphasis to address the points that have been made On that basis, I hope that the noble Earl will not wish to press his amendment.

I turn to Amendment No. 55. I recognise that the objective is to ensure that an attorney with the authority to make personal welfare decisions cannot act if he, knows or has reasonable grounds for believing that P has capacity in relation to the matter". The noble Baroness, Lady Barker, spoke tellingly about the way in which someone can find himself, with no malign intent, drifting into the habit of taking over the decision-making processes in someone's life.

That will be balanced by the guidance we issue and the clarity with which we set out the processes for determining capacity. But Clause ll(6)(a) already makes it clear that an attorney's authority to make decisions about a person's personal welfare extends only to those circumstances where the person lacks capacity. Further, while I hope that the Bill will be widely read once it has been enacted, I have my doubts about that. What will matter is how the message is put across to those who find themselves acting as attorneys, along with all those who have an interest in looking after the welfare of people who lack capacity.

This new subsection was added to Clause 11 in response to recommendations made by the Joint Committee, and I am grateful for that. We agreed that neither health nor welfare decisions should be taken by an attorney while the donor has capacity. Given that, I think that the Bill already achieves the intention of this amendment while recognising that its interpretation in the outside world is a critical element. The code of practice will be very important in its function of providing information to those who act as attorneys.

We have discussed briefly the issues raised by Amendment No. 57 in the previous group. It addresses the difference regarding a financial power of attorney in the sense that, very often, those with enduring power of attorney are able to act in some matters but not in others. We have spoken about handling investments, filling in tax returns and so forth. The donor and donee can work together on such matters. However, we have also said that if donors wish to limit that authority, they should do so. That is already provided for in the Bill because it makes specific provision for the donor to set out restrictions and conditions if they so wish. It also ensures that when people do consider a lasting power of attorney, they receive the necessary guidance on when and how it should be done.

On the basis of my commitment to look again on where the principles might be set out, and on the basis that issues of welfare and financial powers of attorney are addressed and will be further covered in guidance and the code of practice, I hope that the noble Earl will feel able to withdraw his amendment.

12.45 p.m

Earl Howe

I am grateful to the Minister for her helpful reply, and to the noble Baronesses who spoke in support of these amendments. Turning first to Amendment No. 35, I thank the Minister for agreeing to look again at the point.

I will take Amendment No. 55 away and look at it again. I would say only that I think the amendment is perhaps more in tune with the spirit of Clauses 1 and 2 in that it is very much a matter of emphasis here. We may arrive at the same point legally, but the language used and the absence of negatives may be of some significance.

I take the point made about Amendment No. 57. If this issue does not appear in the Bill, it is certainly one that should be flagged up when the code of practice is issued. It is something that everyone who makes a lasting power of attorney needs to think about and is not a matter that should pass by default. Given that we are in agreement on that point, it is more a question of deciding where the provision should go. Again, I shall reflect on what the Minister has said. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

Schedule 1 [Lasting powers of attorney: formalities]:

Earl Howe moved Amendment No. 36: Page 36. line 24. after "attorney," insert "and in the case of a welfare attorney prescribed sections within the instrument covering advance statements as to treatment and care preferences, advance decisions that specified treatment is not to be carried out,

The noble Earl said: In moving Amendment No. 36 I shall speak also to the other amendments grouped with it. This is another set of amendments with a very practical purpose to them. Quite simply, each attempts to improve the wording of the instrument. The amendment to paragraph 2( 1 )(a) is aimed at encouraging donors to put as much information as possible on the instrument about how they wish the donee's powers to be used, and to make clear to the donee on the instrument any wishes and preferences they may have in relation to their care.

Having talked about this with members of the Making Decisions Alliance, I think that the LPA instrument could be of great help in establishing a person's past wishes if at the time of making the instrument the donor is encouraged to give some serious consideration to how they would like their care to be provided. For instance, they may wish to state that they would like the donee to receive a direct payment for care rather than having to receive services. That would be in line with the Government's policy of encouraging that kind of empowerment. Currently, direct payments can be made only once the person has lost capacity if this has been specified on the enduring power of attorney instrument. It would be a great help to the donee to know what the person wished if this was stated on the LPA.

Amendments Nos. 38, 39 and 44 relate to donees stating whether they are bankrupt or on the POVA register. The amendments would simply allow an additional safeguard if donees had to make statements of this nature.

Amendments Nos. 47 to 50, which relate to paragraphs 19 to 22, would ensure that where there is an alteration to an LPA there must be a statement about the nature of the alteration on the instrument itself. The Bill proposes that the alteration could go on an attached note. I am not happy with that. We all know what happens to attached notes—they become detached and can go adrift. I agree very strongly with the Making Decisions Alliance that this is one point of important detail which should be rethought. I beg to move.

Baroness Ashton of Upholland

I am grateful to the noble Earl. I must admit that the stamping part of the Bill is my favourite and I have been looking forward to debating it for several days.

Let me go through the amendments. With Amendment No. 36, we are again discussing where one would provide information, not the question that information is important. The reason I am resisting the idea of putting on the face of Bill the information that the noble Earl wishes to have about the kind of care and treatment the donor might like to receive—although I recognise the importance of giving people information and getting them to think about decisions—is that the prescribed information is not for that purpose and I am a little nervous about what it might do.

I looked yesterday at the prescribed information required on the enduring power of attorney form. An obvious comparison is where you apply for a passport and a great deal of information is provided in boxes at the side of the form which helps you to fill it in. The purpose of the prescribed information would be to ensure that donors fully understand the purpose and the effect of the lasting power of attorney that they are creating. It is a critical function of that information that donors are in no doubt about what they are doing and what they are creating.

I would be worried about including information on advance decisions as part of that prescribed information, partly because people might feel that they have to include information about advance decisions on the form. Technically, the amendment would make that kind of information essential. I know that is not what the noble Earl seeks to do—he is seeking to invite people to think about the issue and perhaps to include such information—but, unfortunately, the amendment would have that effect. I mention that in passing but, nevertheless, it is an important part of the debate.

We will be providing guidance, including advice about advance decisions. The noble Earl referred to people wanting someone to be financially supported, to the importance of people thinking through the kind of decisions they are making and the importance of making their wishes known to their loved ones or to their attorney—who would probably be a loved one too—so that they are able to act on their behalf in the best possible way.

I agree with the spirit of the amendment but I am nervous about saying that advance decisions should be on the form because the purpose of the information required is different. It is about ensuring that people know where to sign and that they understand what the document is. We are only discussing where you do this. I do not think it is appropriate for it to be on the form.

Amendment No. 37 would require the person making the LPA to state on the document the relationship, if any, between the donee and any person the donor has named to be notified of an application. I am not really sure quite what the noble Earl is getting at but I think it is to identify any possible collusion between the donee and the named person, or indeed to signal any undue pressure that might have been placed on the donor to name a person who will not object to the registration. I am not sure that that would be particularly helpful because we know that the relationship between the donor's chosen attorney and a named person is not a sound indicator of whether that person is acting in the interests of the donor.

Our guidance will inform people about the benefits of naming a person to be notified but, again, this is ultimately the choice of the donor. If the noble Earl wishes to return to the issue and explain a little more about what might be achieved, perhaps we can speak again outside the Committee. The only thing I can think of is that it would help to identify possible collusion, but I am not sure that the amendment would achieve what is necessary in such a case.

Amendment No. 38 seeks to amend the schedule to the effect that the powers of lasting powers of attorney are subject to the provisions of the Bill and, in particular, to Clauses 1 to 4. It is a mirror of Amendment No. 35, which we have already discussed. As I have already indicated, I will consider Amendment No. 35 and whether we can make changes to make it even clearer that the principles in Clause 1 must be followed by an attorney.

Amendments Nos. 39, 44, 45 and 47 concern additional safeguards. They all require the donee to state that he is not bankrupt and is not on the protection of vulnerable adults list. They require the notifications, which must be sent to those named by the donor to inform them of registration, to contain this information. I agree that we should do everything we can to safeguard against the abuse of donors of lasting powers of attorney.

Let me deal with the issue of bankruptcy. The Bill already states that someone who is bankrupt cannot be appointed to act as a financial attorney. We have listened to concerns about how we can ensure that this provision is not ignored. There may be a situation, for example, where the donor did not know that the donee was bankrupt and the donee kept quiet about it. We have therefore decided that the Office of the Public Guardian will check to see if prospective financial attorneys are bankrupt when an LPA is to be registered. That information will be available to the Office of the Public Guardian throughout and should make it unnecessary for the donee to agree a statement to that effect or for it to be included on the notification. If the donee is bankrupt, then the LPA will be invalid. That will achieve the noble Earl's objective.

As the noble Earl said, the amendments also relate to people on the protection of vulnerable adults list. They propose that someone who appeared on the list could not be registered as a lasting power of attorney unless the donor was aware of this. If the donee was placed on the list and the donor was unaware of this and lacked capacity, the lasting power of attorney would be revoked.

I am very sympathetic to the intention of the amendments but my reservation is a practical one. It would not be possible as things stand for the public guardian to check whether donees were on the POVA list and, therefore, whether these requirements could be complied with.

The noble Baroness, Lady Barker, will know more about this than I do—I know that she was very involved in the legislation— but the list was designed to ensure that people included on the protection of vulnerable adults list could not be recruited to work as care providers. That is what it is for. In order to make it possible to cross-check—and there are also issues of information being used other than for its original purpose, but I shall leave those aside for the moment— we would have to make substantial, fundamental amendments to the Care Standards Act 2000 to allow the list to be checked by donors or by the Public Guardian. Such changes would be beyond the scope of this Bill.

I have already indicated that I am very sympathetic to what lies behind the amendments and so I propose to look at another way of doing this. Noble Lords will know that the Government are currently considering the recommendations of the Bichard inquiry, one of which proposes that, new arrangements should be introduced requiring those who wish to work with children, or vulnerable adults, to be registered". If we were able to adopt such a scheme, we could consider whether donees of lasting powers of attorney and deputies should be brought within it. The current position is that the Office of the Public Guardian could not check the accuracy of the donee's statement that he or she was not on the POVA list, but we are considering, within the context of the Bichard inquiry, whether we can address that shortcoming.

I propose to take this issue away and look at whether there is value in requiring prospective attorneys to make a statement that they are not on the POVA list. However, it must be understood that whether or not they tick the box, at present there is no way of checking. That might be a deterrent to some people who did not know that we could not check it, but I do not want to give the wrong impression.

Now we get to my favourite part, which is about stamping—

1 p.m.

Baroness Barker

I am very sorry to hold the noble Baroness back. I heard what she said about the POVA list, and I quite understand why it is not possible to do what we want. I think she said there should not be a requirement for somebody to declare that he was a bankrupt because that would be checked by the Office of the Public Guardian, and if someone was a bankrupt, the LPA would be automatically invalidated. What would then happen? Presumably the authorities would then write to the person who had taken out the power of attorney that it was invalid because the person chosen to act as donee was bankrupt.

Given what the noble Baroness said about having a statement about POVA, albeit a voluntary one that cannot be enforced by legislation, is there not a parallel about getting people to declare, or not declare, bankruptcy at the stage at which the power of attorney is being drawn up so that we begin, through the paperwork, to drive standards up? There is something wrong about this being reactive, about people having to go to the Office of the Public Guardian to be told that it cannot be done because their chosen donee is bankrupt. That should be brought to people's attention when they are drawing up the LPA. I am sorry that this is a bit incoherent, but does the noble Baroness take my point?

Baroness Ashton of Upholland

I take the point completely. The noble Baroness has highlighted what I said was almost a contradiction. Because we can check something, there is no need to tick a box; because we cannot check something, the box has to be ticked. The noble Baroness is absolutely right.

The point behind the amendments is, I believe, to provide clarity and protect vulnerable people. The underlying principle is whether we can discover whether somebody is bankrupt. Yes, we can. Can we discover whether somebody is on the POVA list? No, we cannot.

The noble Baroness talks, quite rightly, of deterrence. If people have to tick a box, it might make somebody think twice. That is why I shall look at this within the context of POVA. I am not against having a box about bankrupts; I was not suggesting that that would or would not be a good thing, and I shall look at it. But in the context of the Bill, as opposed to how we design the form to make it work better, if somebody were bankrupt, we would know. We would be able to identify him even if the LPA had already been registered, and to notify financial institutions to that effect. With POVA, we cannot.

In looking at what might be on the form, I would not want to pretend that, with regard to POVA, it would give us any further information other than what the individual chose to declare. That might be a good deterrent, but it would be no more than that at this stage. I accept that what I said was contradictory purely in terms of the amendments, but I was asking what we were trying to achieve.

The noble Earl has taken forward something the MDA has raised, and we may have given the answer. The instrument is stamped. The word "note" is stamped. My initial reaction yesterday was to change "note" to "stamp"; then someone very cleverly pointed out that the great joy of legislation is always making sure that you put something down for the future. I shall not be changing "note" to "stamped", although they are stamped at the moment, because if we move to electronic records, that will be an electronic note and not a physical stamp, and I would have to bring the legislation back to change it. Noble Lords can see why I am enjoying this.

The noble Earl is absolutely right; the most logical thing to do is not attach one piece of paper to another piece of paper and risk it being lost. That does not happen now—it is stamped. But I want to leave the word "note" in the Bill to allow for what I hope will be a good move to electronic records. I hope that that explanation makes sense, and that the noble Earl will feel totally satisfied and withdraw his amendment.

Baroness Masham of Ilton

There are many vulnerable people who have capacity but may be frail and vulnerable. Will they be protected under the Bill, or will it only be those without capacity?

Baroness Ashton of Upholland

The whole purpose of the Bill, as I think the noble Baroness, Lady Masham, knows, is to try not to define a person as lacking in capacity, incapable or having capacity. For many people, as they get older, or because of illness, changes in capacity are fluctuating or gradual. It is a function of getting older. We are seeking to protect everybody by making it absolutely clear that incapacity is not a moment—it is a process.

Secondly, one should always act in the best interests of the individual. That is an objective, not a subjective, test. It is not a question of what I think or what the noble Baroness, Lady Masham, thinks, but of what is objectively in the individual's best interests.

Thirdly, given the protections we provide for powers of attorney, we are telling people that if they wish to, it is a good idea to appoint somebody they trust, and probably love, to act on their behalf if they cannot do it themselves. We are saying that our job is to provide safeguards so that even though the vast majority will be fine, if somebody were to try and exploit people, we would protect them.

I hope that as we go through the Bill, the noble Baroness, Lady Masham, will see that that is what we are doing. Many of the issues we are debating today are not about a disagreement of principle but merely about how we achieve what we want.

Earl Howe

This is just the sort of debate in Committee that I enjoy and believe that we should have because it enables us to air some extremely important practical matters. We all agree about the end result; it is simply a question of how we get there.

I well take the noble Baroness's point that Amendment No. 36 has an unwanted side effect. I shall reflect on that point. As regards bankruptcy and the POVA list, we are looking at how we reach the end point. In a sense, it does not really matter how we get there on this issue, as long as we get there. I am very grateful to the Minister for her undertaking about bankruptcy. I am entirely reassured by that.

I was a little disappointed to hear that there is no means for the Public Guardian to carry out a check on whether someone is on the POVA list. It would be helpful to have a discussion with the Minister outside the Committee on what options are available to achieve the end point we both desire. I am grateful to her for referring to the Bichard inquiry, which is very germane to the issue.

There is a deterrent value in requiring someone to tick a box. That was partly the rationale for these amendments, although it is not a sufficient justification for them. The justification is, as we all agree, to protect vulnerable people. Nevertheless, I think we are in agreement on that narrow issue. The points that the noble Baroness made about the stamp were sufficient deterrent to enable me to refrain from bringing back these amendments at Report. However, I do not want to close off my options at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 37 to 39 not moved.]

Earl Howe moved Amendment No. 40: Page 37, line 12, at end insert — ( ) no material conflict of interest is likely to arise by the creation of the lasting power of attorney,

The noble Earl said: In moving Amendment No. 40, I shall speak also to Amendments Nos. 41 to 43 and 58. Amendment No. 40 is, I hope, self-explanatory. A person on whom a lasting power of attorney is conferred is in many cases likely to be the spouse or close relative of the donor. In those circumstances, the donor enters into the power of attorney with his eyes open as regards any potential conflict of interest which the donee may face if ever in the future he has to act under its authority.

Conflicts of interest are an everyday fact of life. Very often, they do not matter because many if not most people are able to set aside their personal wants and wishes when they know that their duty is to do the very best by someone they love. However, there will be instances where perhaps the conflict of interest is both blatant and dangerous. We have all read of cases where someone has inveigled their way into the life of an elderly person of some means. The family of that person are all of a sudden made to feel unwelcome by this individual who may be a carer or housekeeper. Before anyone knows what is happening, the carer has become the donee of a lasting power of attorney. Within a year or two, the power has taken effect because of the mental incapacity of the donor. I am concerned that, as the Bill stands, there is not a great deal to prevent that type of situation arising.

My amendment proposes that, at the time of registration, the Public Guardian should have the reassurance from the person signing the certificate that accompanies the LPA that, in his opinion, there is no material conflict of interest—actual or potential—about which the Public Guardian need be concerned. A qualified statement by the person signing the certificate would not necessarily be a bar to registration of the LPA. However, it could serve as a marker if, at a future date, the Office of the Public Guardian initiated a degree of monitoring on the operation of certain LPAs. One hopes that it would also act as a signal to the donee of the LPA that a certain conflict of interest had been publicly noted. There could well be merit in having at least an element of transparency in this sense without going overboard in trying to eliminate conflicts of interest in all circumstances, which is clearly unrealistic and impossible.

Amendments Nos. 41 to 43 are again straightforward. Clause 9 makes it clear that an LPA is not created unless the person executing it has capacity to do so. When we look at the provisions in Schedule 1 relating to the formalities for making an LPA effective, it is not explicitly stated how the Public Guardian is supposed to know whether that condition has been met. That is clearly a fundamental consideration and I wonder whether a responsibility should not be placed on the person signing the certificate accompanying the LPA that, in his opinion, there is no doubt about the person's capacity to enter into the deed.

If so, it is not obvious how the person signing the certificate is supposed to ascertain the matters that he is required to certify or what investigations will be necessary for him to carry out. If he is negligent, or maybe a little remiss in carrying them out, what penalties will there be for incorrect certification? Although we do not want to create a mammoth piece of bureaucracy, people need to know that certifying an LPA is not something to be undertaken lightly or incautiously.

We do not know who the person of a prescribed description will be—whether a medical practitioner, a lawyer or someone else with a suitable qualification. Equally, we do not know what kind of prescribed information the certificate will have to contain. It would be extremely helpful to the Committee if the Minister could shed a little light on these areas.

1.15 p.m.

Amendment No. 58 is a straightforward probing amendment. I do not need the Minister to tell me that it is extremely defective in the way that it has been drawn up. It is designed for a purpose—as a hook on which I can hang what I am about say. Clause 13 (6) makes clear that the appointment of an LPA donee is terminated on the occurrence of certain events, one of which is when the donee himself loses mental capacity. My question is self-evident from the amendment. What does this provision imply? Does it mean that a donee who has a car accident and is taken to hospital in a coma, but who later makes a full recovery, will find that his appointment has been terminated by his period of unconsciousness? Does it mean that someone who is epileptic and has temporary periods of incapacity cannot ever be the donee of a lasting power of attorney?

As the clause stands, not only would temporary bouts of incapacity terminate the donee's appointment, but they would also serve to revoke the power itself. Is that really desirable? I realise that the amendment is far from perfect as it stands, but I would be grateful if the Minister could throw some light on the question. I beg to move.

Baroness Barker

I will speak to Amendment No. 79 which is in this group, but before I do, I want to say that I strongly support the intent behind the amendment moved by the noble Earl, Lord Howe. As he said, conflicts of interest are everyday matters and things that families manage very well. However, when a conflict of interest is of such a magnitude it is right that it should at least be noted and registered, if not prohibited. I hope that that would apply to all powers of attorney, however informal the process of establishing it had been— whether or not there had been legal advice.

Amendment No. 79 is designed to question Clause 23(2)(b). This may be a reflection on the lack of capacity of my noble friend Lord Goodhart and myself—although my noble friend is an experienced draftsman and lawyer—but neither of us understood what the clause meant. We thought that it might refer to big decisions such as moving house or something that a person would absolutely have to be consulted about. However, we did not really know what it meant so we are asking the Minister to explain.

Lord Alton of Liverpool

I also share the concerns voiced by the noble Baroness, Lady Barker, on that point. I am sure that we all agree that clarity in legislation is essential but sometimes we fall back on a certain amount of gobbledegook and anyone reading paragraph (2)(b) of Clause 23 would agree with the remarks just made. However, I particularly support what the noble Earl, Lord Howe, said on Amendment No. 40 about the important question of conflicts of interest. Many of us will have dealt with such situations. Certainly, when I was a constituency Member of Parliament I often dealt with disputes within families or between friends because of issues that would arise through conflicts and they were some of the most painful experiences that any of us could be involved in.

I particularly recall a telling remark made by the noble Earl's noble friend, the noble Baroness Lady Cumberlege, during the Second Reading debate on the Assisted Dying for the Terminally Ill Bill. She said—and it drew some laughter in the Chamber, though the issue is very serious—that where there is a will there is a relative. We must at least be seized of that possibility. That is why, when conflicts of interest arise, it is important that we ensure, as the noble Baroness has just said, that they are at least recorded— and, in some cases, there should be strict prohibitions.

We shall have to consider the question with regard not only to LPAs but to directives and other issues in the Bill. It may be that there should be a specific section simply dealing with conflict. I draw the Committee's attention in that regard to the most recent report of the Joint Committee on Human Rights—the fourth report of the Session 2004–05. The committee suggested that the following safeguard should be inserted into the Bill: A requirement that a witness to an advance directive not be a person who stands to gain from the person's death, or employed at the relevant health care establishment which is caring for the person". Will that point, and the point raised by the noble Earl, Lord Howe, and the noble Baroness, Lady Barker, be addressed as we proceed through the details of the Bill?

Baroness Howarth of Breckland

The reason I am here today is to raise on behalf of CSCI, and as the ex-deputy chair of the National Care Standards Commission, the serious concern that they have about the registered owners and their staff. It is important to consider not only the staff in care homes but the whole grouping who might become either LPAs or deputies. That is why I am in difficulties knowing on which amendment to make my point, so forgive me if I am procedurally wrong. The noble Earl, Lord Howe, is always so good at being eloquent. It would make it extraordinarily difficult for vulnerable people to have confidence in their care homes if they felt that these powers were in the hands of those who were registered to care for them.

There is an added difficulty in that CSCI, which has the responsibility to inspect in such situations, will find itself with a whole new raft of conditions to oversee in terms of the rights and responsibilities of the individuals under its care in relation to that inspection. So there is an institutional as well as personal problem.

I hope that the Government take time to consider the matter. I would like to see some definition placed in the Bill. The Minister may be reticent about that but, if that is not done, these issues must be included firmly in guidance. I am grateful for the words recommended by my noble friend, and seek clarification on the point.

There are some difficulties in how the definition might be written, as one cannot prevent those in residential homes and domiciliary care—and let us not forget that domiciliary care, with people caring for Others in their homes, is part of the issue—from looking after people's finances and being involved in them. Carers often have to manage the money, collect the pensions and do the shopping. We need to be careful that we do not exclude those activities in ensuring that those carers are not deputies or have power of attorney.

Baroness Ashton of Upholland

First, my noble friend Lady Andrews will address in greater detail the very important point that the noble Baroness. Lady Howarth, has raised. I became aware of it when I saw the letter from the Commission for Social Care Inspection yesterday. I am going to seek a meeting with CSCI, as well, to explore the matter in greater detail. But I can tell the noble Baroness at the outset that we are very alive to the issue. There are no absolutes in this issue, as she will know, so we want to be clear about not ruling something out for ever in all circumstances. But there are real concerns, which she has raised, and my noble friend will discuss them in greater detail when we reach Amendment No. 64, when the matter arises. However, the noble Baroness is right to raise the matter here, too, and we shall consider what we can further do. We do not want to move to an absolute position, because there may be circumstances in which it is appropriate to act as deputy in particular circumstances approved by the court in the right way.

I am grateful to all Members of the Committee who have spoken on this matter. I can tell the noble Lord, Lord Alton, when we come to advance decisions, but I do not want to pre-empt that. He makes an important point, and I am studying what the Joint Committee said in its final deliberations on the Bill to ensure that we have got the Bill right. But that is an issue, as the noble Lord will realise, that we must deal with in the right and sensible way, recognising the relationships that will exist between those acting as attorneys, who will very often be beneficiaries but may not know that they are. With an advance decision, a doctor would not know and could not find out the beneficiary of somebody's will, because there would be no way of knowing that. We must ensure that we have got the balance right.

Lord Alton of Liverpool

Before the Minister leaves that point, she said earlier in our proceedings that she was aware that many people will never read the detail of the Bill but they will have a rough idea of what it allows. Would it not be sensible to codify in one part of the Bill all the questions around conflicts of interest? We will debate the different aspects of that when we discuss Amendment No. 64. But the matter arises at several points in the Bill, so would it not be sensible to bring it all together in the same place?

Baroness Ashton of Upholland

The purpose of the Committee is to explore how far one codifies at all and how far one codifies in particular ways. The theme today has been how far one can codify in a way that does not move the balance too far in the other direction, and prevent people being involved in something that we are all supporting—that is, to create lasting powers of attorney for all the right and obvious reasons. So we are negotiating in a sense, or discussing how and when it is best to put such matters into the legislation, with all that that brings, when it is best to consider these matters in other ways, and how far one can differentiate between different kinds of relationships and interests. There may be conflicts in one set of circumstances, but none in another. That is very important. I am not against the noble Lord's proposal, but we are trying to explore the matter—and that is the joy of Committee, if I may say so.

I turn to Amendment No. 58. We have sought to create certainty around the question of the attorney. The noble Earl rightly referred to the possibility of someone having an ongoing illness that means he lacks capacity, or someone who may have a fluctuating illness. The key point is whether the attorney lacks the capacity to carry out the duties of the attorney. That is the point that we have been searching for.

To give a very flippant example, but an example none the less, if an attorney were very drunk for an evening, one would be quite clear that he would not be able to carry out his duties. But of course, during that time, he may not be required to carry out the duties, so it does not apply. So we do not want to revoke powers of attorney for those circumstances. An attorney might have an accident and be unconscious for 12 hours, then perfectly fine thereafter. But we are keen to get some certainty into the process, because we do not want to create confusion in the minds of those who are going to be reliant on the powers of attorney operating correctly—not least, the financial instructions, which we described earlier. Our suggestion is that, in the case of an attorney with fluctuating capacity, or indeed with a long period of incapacity, it is better for the revocation of the power of attorney to be final, and for the ex-attorney to apply to the court for appointment as deputy if the court considers that to be in the person's best interests.

Having reconsidered the Bill, I am not sure that the current drafting is as helpful as it might be, so I will look at it and see whether we can clarify it further. We are seeking to be absolutely clear that the attorney must be able to carry out the duties of the attorney and, when that might not be possible for varying periods that could affect the situation, the power should be revoked, but with the opportunity to become a deputy if that were felt to be appropriate by the court. That is simply and precisely to give clarity to those on the receiving end of the attorney, if I may so describe it.

I turn to Amendment No. 79, proposed by the noble Baroness, Lady Barker, and the noble Lord, Lord Goodhart. I love the idea that we have put something in the Bill that even they, with all their amazing abilities in different ways, could not understand. I confess that I did not understand it either. But now I do, and once you do it becomes easier, certainly for those with a legal training and a legal mind. I am looking specifically at the noble Lord, Lord Goodhart. I suspect that he will start nodding when I make my next comments.

1.30 p.m.

Lasting powers of attorney are in law regarded as agents and are therefore affected by the law of agency as well as the provisions of the Bill. Noble Lords familiar with the law of agency—which I was not, but I am now—will know that it is sometimes necessary for the attorney to give the consent or authorisation of the donor before they can act. The obvious example is where the donee would like to purchase the donor's property. The donor would make it a condition of the power of attorney that the attorney must get their consent. In other words, if I wanted to buy the house of someone for whom I act as attorney, I would need to get their consent to do so. However, if they lack capacity, I cannot get their consent. Yet, it would be wrong for me to purchase their house without consent. In those circumstances, the court would step in and give the consent. So, it is a protection, but a protection in circumstances where the law of agency applies. Noble Lords could read Clause 23(2)(b) with that example in mind.

Lord Goodhart

I am a little concerned with that explanation. I think that a case where the donee was wishing to purchase the donor's property would be outside the functions of an agent and the donee would be purchasing not as agent but on his own account. I think that the donee could not under the law of agency then proceed to sell to himself. So it would be a transaction that was outside the agency altogether. So it would not, I would have thought, have had much to do with the law of agency. I see what is intended, though I am not sure that it is necessary.

Baroness Ashton of Upholland

I think that in that situation—and I am not a lawyer, as is about to become quite clear—you would be acting as both. You would not only be purchasing it for yourself but acting on behalf of the other person as their agent. You are therefore undoubtedly in a conflict. In those specific circumstances the court must intervene to ensure that it is done properly. That is my understanding of the situation, and we will ensure that that is the case. I saw that as the logic of the matter when I discovered that this provision was needed. There are times when one is acting both as agent for someone else and on one's own behalf. One cannot be in that conflicted situation, and therefore the courts must intervene.

The critical point is that it is about ensuring that people are properly looked after. So the courts will act appropriately and properly.

Baroness Greengross

Would not the other provisions about conflict of interest cover this point, rather than this specific provision? It seems to me an absolute conflict of interest, even if it is within the family.

Baroness Ashton of Upholland

The noble Baroness is right to think that. But as we also know, it is important in primary legislation to ensure that there is a good fit with the other parts of the law. I will go away and see whether it could be done that way. However, I suspect that parliamentary counsel have included the provision because of the need to make it sufficiently clear so that lawyers looking at it will say, "I know what this means. This means that it must apply to the law of agency". As the wording did not carry that meaning for the noble Lord, Lord Goodhart, I shall have to check it. However, as parliamentary counsel do not put in superfluous clauses, there must be a very important explanation for it. But I take the noble Baroness's point—which is one that I as a layperson would take.

It is also very important to say that the provision is solely about the consent or authorisation that the attorney needs in order to carry out their duties as an attorney. So it is not about giving or refusing consent on medical treatment. I hope that I have made that clear; I am not entirely certain that I have, but I hope that I have.

I turn to Amendments Nos. 40, 41, 42 and 43. I say to the noble Earl that our ambition on the prescribed person is that there will be someone who has known the donor for some time or is perhaps a professional. The certificate will say that, in their opinion, the donor understands the purpose of the instrument and the scope of the authority conferred upon it; that no fraud or undue pressure is being used; and that there is nothing else to prevent an LPA being created.

I have shied away from requiring that a professional do that because "professionals" quite often equals "fees". I am not terribly taken with making that a requirement. In my view, it is just as valid to allow someone who knows you well to fill in the form. I take the noble Earl's point on people understanding the importance of the matter. I will think about how we can ensure that that happens. Perhaps that is a matter of providing guidance to the person signing it. This is not the right analogy, but I know that, like me, the noble Earl will have been in the position of being asked to sign the back of a passport photograph to say that it is a true likeness. Neither he nor I would sign it if that was not true. When we witness signatures on wills and so on, we are very clear that we do so with a sense of responsibility. I think that that is very important.

I am not sure that I want to go further by saying that the form has to be signed by a particular type of person. I do not want to base this purely on professionalism. We are also asking people for their opinion. This is by no means the only safeguard; it is a part of the process. That is my current position and where I hope to remain. However, I am willing to listen to what other noble Lords say.

Noble Lords have made the point that relatives are likely to be beneficiaries of the donor's will. I like the comment of the noble Baroness, Lady Cumberlege, that, "Where there's a will, there's a relative". That has to be one to remember. I do not want to prevent anyone appointing a relative merely because there might be a conflict of interest. It is possible, indeed probable, that noble Lords here today who take out—as I hope they will—a lasting power of attorney will appoint someone who will be a beneficiary in one way or another. They may not know that they will be a beneficiary, but they probably will be. It is difficult for a certificate provider to determine the likelihood of a conflict arising without knowing the contents of the donor's will. I am not entirely sure that it is appropriate that they should be given that information. I am nervous about that.

I am also keen not to deter people from wanting to provide the certification. Much of this is about getting people to understand the importance and relevance of these documents while trusting in the good sense of most people. I recognise issues of vulnerability, but we are also talking about ensuring that we give people the right safeguards and flexibility.

Lord Alton of Liverpool

I am sorry to interrupt the Minister again, but these are important questions. She has been very helpful in assisting us to explore them. She referred earlier to a situation where, for example, a house might be sold over the head of the person who previously lived there because they lost their capacity. As she said, in many cases a relative will be acting on behalf of someone with their wishes and will do so in a loving and caring way. However, we are all aware of circumstances where someone is given permission by the court which, on the face of it, seems a reasonable enough decision, that person comes to own the property, and then he acts to evict from the home the person without capacity. Perhaps the person without capacity will be put into residential accommodation and have a much inferior standard of life than he had previously. That may be very much against what his primary wishes would have been. What will we be able to do about such cases?

Baroness Ashton of Upholland

The noble Lord has raised some very important points. I would say two things. First, above everything else, the Bill's theme and core is that the attorney must act in the best interests of the person concerned. The scenario that the noble Lord painted clearly would not be in the person's best interests. Therefore, the power of attorney could be revoked and the force of law could take its place.

Secondly, we have created in the Bill a new criminal offence involving wilful neglect of the individual. This is meant specifically to capture circumstances in which an individual may be neglected—not physically harmed, but neglected—as a consequence of the actions of an attorney or anyone else. That will be a criminal offence that will carry a sentence.

We are seeking to say that we recognise that, in the vast majority of cases, attorneys will act in the best interests of the individual in a loving and caring way—which is great—but that we also have to guard against circumstances where someone, whoever they are, whether an attorney or someone else, does not do so. We need the weight of law to protect that individual. We hope to achieve the combination of those two things. The noble Lord is right—we need to get a balance in those two areas. We do not want to prevent or deter people from taking powers of attorney or from wishing to be attorneys, never mind signing the certificate, but we also want to assure that protections are in place.

Baroness Greengross

I am sorry to intervene as everyone is hungry, but I shall be quick. We talked about bankruptcy but there are other considerations. It may not be a case of someone being bankrupt. Would wilful neglect cover someone who puts an older person who is frail and vulnerable into very cheap accommodation as opposed to expensive accommodation, as the former person knows that he or she will benefit from doing that at a later stage?

Baroness Ashton of Upholland

We are running ahead of ourselves. We will debate this matter later. It would depend on the circumstances. It depends what the noble Baroness means by cheap accommodation and expensive accommodation. However, it is difficult to say that that situation incorporates the best interest test and therefore the attorney's powers could be revoked and he or she would have no control over what happened to the individual in question. One way or another those circumstances are covered in the Bill, whether it is a question of neglect or best interest.

I shall be brief as I am neglecting the need of Members of the Committee to take refreshment. Amendment No. 41 seeks to include particular reference to the mental incapacity of the donor when the prescribed person makes the certificate. I reassure the noble Earl that the Bill already requires that the prescribed person certifies that, in his opinion, the donor understands the purpose of the instrument and the scope of the authority conferred under it. As the noble Earl would expect, I want to avoid the label "mental incapacity" in the Bill because it does not fit with what we seek to do.

We have ensured that if, in the opinion of the person providing the certificate, the donor does not understand that he is creating a lasting power of attorney, he will not be able to provide a certificate. Without the certificate the lasting power of attorney cannot be registered. We have done it that way round. A certificate is awarded when the donor says that he has understood what he is doing. If a certificate is not awarded because that is not considered to be the case, the lasting power of attorney cannot be registered. I hope that the noble Earl considers that we achieve the same outcome but from a different direction.

In Amendment No. 42 the noble Earl seeks penalties for incorrect certification. I am sure that the noble Earl seeks to deter someone from lying in a certificate rather than to catch people who fill it in incorrectly. However, he will understand that I do not want to deter people from providing a certificate because they fear a mistake on their part or that a challenge to their opinion might result in a fine or criminal sentence. I am sure that the noble Earl does not want that either. We need to make clear that this is an important thing to do. The donor needs to think carefully about who he or she invites to certify this provision. The provision of a certificate is an important safeguard which in most cases will be made by honest people with integrity. We want to support this and not undermine it. If it were the only measure upon which one was relying, I could understand the desire to include many more safeguards, but that is not the case.

We have discussed various measures today, for example, ticking boxes, certifying in a particular way, filling in a form in a particular way, the Explanatory Notes that we provide and guidance that is given to the donor, the donee and the person providing the certification. We are trying to build all those things into the appropriate safeguards.

Amendment No. 43 seeks to remove the requirement that the certificate includes any prescribed information. We propose that the prescribed information will include explanations about the purpose of the lasting power of attorney and the meaning of the certificate on the face of the certificate. This is intended to ensure that the maker of a certificate knows exactly what he or she is signing and the legal effect of the lasting power of attorney that is being created. The maker of a certificate should understand the seriousness of the action that he or she is taking.

I hope that I have gone at least some way to address all of the points that have been made today. I am very happy to continue discussions on these issues between now and Report. I hope that the noble Earl will withdraw the amendment.

Earl Howe

Once again I am very grateful to the noble Baroness and to Members of the Committee for what they have said in relation to these amendments. I am particularly glad that Amendment No. 40 attracted the support that it did. The noble Lord, Lord Alton, is, of course, right that conflict of interest is an issue that extends across a number of areas in the Bill. We shall return to that theme shortly.

The noble Baroness, Lady Howarth, raised a dimension of the issue about which she is supremely qualified to speak. I must say that it was not a point that I had focused on myself. I hope that we can pursue that matter between now and Report. I refer to the concerns raised by CSCI.

I am grateful to the Minister in relation to what she said about Amendments Nos. 41 to 43. She was most helpful. I agree with her that we do not necessarily want to stipulate that it should be a professional person who signs the certificate. That would create unnecessary costs and barriers. But at the same time if someone signs a certificate in bad faith, I am sure most of us would feel that there ought to be a penalty for doing that.

I speak from ignorance but I would be extremely surprised if there were not penalties associated with someone who deliberately made a false statement when certifying someone's passport application or an application for a shotgun certificate and did so either when he should have known better or when he had not made the proper inquiries, or when the statement was an out-and-out lie. I would be surprised if there were not penalties associated with doing that so there was a real deterrent in law. The matter that we are discussing is to my mind equally serious. I hope that it can be clarified.

The noble Baroness is right—what is being asked for here is an opinion; it is not necessarily a matter of fact. It is not possible for someone to know the contents of someone else's will, and not desirable either. Nevertheless that does not prevent an opinion being given whether there is, or is likely to be, a material conflict of interest.

1.45 p.m.

Baroness Ashton of Upholland

I am sorry to interrupt the noble Earl but I want to make a distinction. When one signs the back of a passport photo to confirm that it is a photo of the relevant person, or when one confirms a signature, those are facts. However, the matter that we are discussing concerns opinion. How would one ever know whether the opinion of the person making the certificate was wrong, false or that he or she lied? I would be interested to hear how the noble Earl considers we could deal with that issue in the same way as we deal with facts. By the way, I have no idea what the penalties are for giving false information in relation to a person's passport. It is a question of facts versus opinions, which is a difficult issue to resolve.

Earl Howe

I take that point but if the noble Baroness pursues my example of the application for a shotgun licence, you are passing an opinion that the person who is applying for that licence is a suitable person to hold it. I have had occasion to refuse to give such an opinion as the person applying was not in my opinion a suitable person to have a shotgun. There are probably parallels elsewhere.

I turn briefly to Amendment No. 58. If the test of capacity of the donee is, as the noble Baroness said, a matter of fact in all the circumstances at a particular juncture, that is a very helpful clarification. However, if that is so, we need to look at the drafting a little more closely to make that point clear. The question then arises, at what point does a temporary period of incapacity become significant and then trigger a revocation of the power? Reading the Bill, I do not think that we are very close to answering that question. Therefore, we should reconsider it. However, the time is drawing on and it is the moment for me to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 41 to 50 not moved.]

Schedule 1 agreed to.

Baroness Andrews

I beg to move that the House do now resume. In doing so, I suggest that the Committee stage begin again not before 2.50 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.