Hon Ruth Dyson
Minister of Labour, Minister for ACC, Minister for Disability Issues, Minister for Senior Citizens, Associate Minister for Social Development and Employment (Child, Youth and Family)

Second Reading: Protection of Personal and Property Rights Amendment Bill

11 September 2007

Mister Speaker, I move that the Protection of Personal and Property Rights Amendment Bill be now read a second time.

This Bill improves the protections for vulnerable people in Part 9 of the Protection of Personal and Property Rights Act 1988.

Part 9 allows people to complete Enduring Powers of Attorney (EPA) so that, in the event that they lose mental capacity from accident or disease, someone can continue to make decisions on their behalf. There are two kinds of EPA: a personal care and welfare EPA, and an EPA for property affairs.

At the outset, I would like to express my appreciation of the Social Services Select Committee for the thorough and comprehensive consideration they have given to the Bill and the careful thought members have given to changes that will improve it.

Part 9 of the Protection of Personal and Property Rights Act is a very important measure for New Zealand’s ageing population in particular.

The use of Enduring Powers of Attorney that it provides for, is a voluntary self help measure which enables people themselves to arrange for someone to make decisions on their behalf should they, at some point in their future lives, be unable to make those decisions.

The alternative, provided for in the other parts of the Act, is for the Courts to appoint someone to make those decisions. It is best for the person to nominate and appoint someone they know and trust as their attorney.

It is an unfortunate fact of life that not all decisions made by attorneys under EPAs are made in the best interests of the person who has given the EPA. It is an even more unfortunate fact of life that some of the worst cases of abuse of EPAs involve family members, who have sought to benefit themselves rather than the person who appointed them, the donor.

While Part 9 of the Act works very well for the majority of people, it does not have sufficient protections against attorneys with mischief on their minds manipulating situations to their advantage or taking decisions without being held accountable.

This Bill sets out to do several things.

Firstly, it sets out to enable people to draw up EPAs in such a way as to prevent problems from arising, if and when the EPA is activated. A key change is to the process for establishing EPAs so as to prevent coercion, misrepresentation or undue influence of the person concerned, especially when that person is frail or unwell.

This will require that the person’s signature on the EPA must be witnessed either by a lawyer retained independently from the attorney, or by an authorised officer of a trustee corporation. The witness must certify that they have explained to the person the effects and implications of the EPA and other matters, including the person’s rights to revoke or suspend the EPA, and to specify monitoring arrangements. The witness must also certify there is no reason to believe the donor is mentally incapable.

I agree with the Select Committee that the advice and witnessing provisions be extended to appropriately trained and experienced legal executives, who undertake much of this work in legal practices.

Our Labour-led government believes that these measures will give people making EPAs much more control over the way they are managed. The measures will also make it more difficult for attorneys to get people to sign EPAs for the benefit of the attorney’s interests rather than the interests of the donor.
The second major area addressed by the Bill is to provide for process and procedural changes that address specific problem areas, such as consistency in the practices of activating EPAs, decision making, and gifting arrangements. Most of the provisions in the Bill are dedicated to these changes.

The Bill provides a clear statement of the purpose of Part 9, an element missing from the original legislation. It also makes it explicit that the obligations of an attorney are to act in a way that promotes and protects the best interests of the donor.

For people who are losing capacity and to a lesser extent, the people who act for them, the transition of responsibility from donor to attorney is a very important step in their lives.

The Bill addresses and strengthens this process through three measures. Firstly, donors of EPAs are presumed to be mentally competent until established otherwise.

Secondly, a clear and consistent threshold is provided for the activation of a personal care and welfare EPA when the person loses capacity. The threshold is measured against the person’s capacity to make or understand individual decisions rather than being a ‘once and for all’ activation of the EPA. This change recognises that some medical conditions do not mean a person loses capacity to make all decisions relating to their personal care and welfare all of the time.

Thirdly, the Bill provides a clear process for activating an attorney’s authority to act under an EPA. For significant personal care and welfare matters and for property EPAs, activation is based on a certificate by an appropriate health professional that the person is mentally incapable. The Bill recognises that in some cases a health professional other than a medical practitioner may be the appropriate person to issue such a certificate.

The Bill also promotes the empowerment of donors by requiring the attorney, as far as practicable, to consult the donor and any person specified by the donor in the EPA. The attorney is also required to encourage the donor to act for him or her self, and otherwise to involve the donor in decision making to the maximum extent of the donor’s capability.

I accept the Select Committee’s recommendations in respect of clarifying when a medical certificate of incapacity is required for an attorney to act on significant personal care and welfare matters. These will relieve an attorney from the need to produce further medical certificates where the donor is certified to have a health condition that will continue indefinitely, or for a specified period.

Where an attorney is acting on behalf of a donor they will be required to provide information on the exercise of their powers to any person or persons specified in the EPA.
This is an important measure, not just for maintaining the integrity of the decision making by attorneys, but also for reducing the opportunity for the management of an EPA to become a matter of discord among other family members.

The extra step recommended by the Select Committee of requiring property attorneys to keep records of the financial transactions they have made on behalf of a donor, will provide transparency of the attorney’s actions.

The limitations the Bill places on the powers that attorneys currently have to benefit themselves and others, will reduce the opportunity for abuse. The extent to which attorneys should be able to benefit themselves and make gifts or loans to people other than the donor are matters that should be considered by people when drawing up an EPA They should not be left to the discretion of the attorney as is currently the case.

The new provision in the Bill that allows the donor to suspend an attorney’s power to act recognises situations where the person might have recovered the capacity to act on their own behalf, for example, when recovered from a severe head injury.

The remaining area the Bill targets is to improve the opportunities for redress when attorneys misuse their responsibilities.
This is done by extending the range of people who can apply, as of right, to the Family Court for the review of an attorney’s actions. At present any person other than the donor applying to the Court can only do so with leave of the Court.

I agree with the Select Committee’s recommendation that this right be extended to Elder Abuse and Neglect Prevention Services. This freeing up of access to the Family Court will be of considerable help to such Services. Frequently they have had difficulty dealing with abuse arising from EPAs involving family members as attorneys.

I would like to recognise the Elder Abuse and Neglect Prevention Services from throughout New Zealand, many of them provided by Age Concern, who deal with these types of situations when they go wrong, almost on a daily basis. I know that these services have been supportive of the changes being sought in this Bill and are watching the progression of the Bill with interest.

Mister Speaker, the enduring powers of attorney provisions of the Protection of Personal and Property Rights Amendment Bill represent a very important measure available to all New Zealanders, not just older New Zealanders. The possibility that New Zealanders may lose capacity to make decisions for themselves either through disease or accident is an unfortunate reality of life.

This Bill will give people, and older people in particular, greater confidence that EPAs will work in their favour. It will provide more emphasis on drawing up EPAs in a format that suits personal and family circumstances and provides processes that are sound and back older people’s wishes. It also ensures, if all else fails, the actions of the attorney can be more easily scrutinised by the Family Court.

I would expect that this Bill will open up the way for many more people to draw up EPAs to safeguard themselves against unforeseen events. In this respect, to have an EPA is a very sensible and prudent measure for all New Zealanders, not just those in or approaching retirement.

Mister Speaker, the changes I have outlined will, when the Bill is passed, take twelve months to come into effect. In that twelve months period there will be further work required to redraft the enduring powers of attorney forms and guidelines and other certificates to be set out in regulations.

I look forward to the passing of the Bill and the implementation of the changes, and the impetus they will give to enduring powers of attorney in New Zealand.

ends

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