TRIBUNAL UPDATE: COMPENSATION WHERE LOSS CAUSED BY ACTIONS OF AN ATTORNEY USING A POWER OF ATTONEY.

• Date: 01 January 2019
• Author: Smith, Anita

Enduring powers of attorney are useful and specific forms of agency that allow for a person to appoint a trusted person to manage personal and/or financial decisions even after the person who appoints them has lost decision-making capacity to supervise the agent/attorney. While it is likely that most enduring powers are operated by honest and diligent appointees, sadly some persons appointed to these important positions of trust abuse those powers or operate the powers incompetently, causing financial loss to the person who appointed them. Cases of financial elder abuse that are presented to courts and tribunals frequently arise from misuse of an enduring power of attorney.

Guardianship lists in Australian tribunals have been the adjudicators of disputes arising from the operation of enduring powers of attorney since guardianship tribunals were established from the 1980s. Presumably legislatures of the era considered that the issues of incapacity and substitute decision making were suitably compatible between guardianship and powers of attorney that they may be determined by the same tribunals. Consequently, guardianship tribunal members make decisions about the validity, suitability and operation of enduring powers and can revoke or amend the powers. Tribunals are generally considered to be more accessible and informal, and less costly, than courts, particularly wealthy persons or instances of very serious fraud. Litigation about financial losses caused by an attorney have been more likely to occur after the death of the principal (sometimes called the donor) at the point of the distribution of a principal's deceased estate.

In a new approach, when the Victorian Parliament passed the 2014 Powers of Attorney Act (Vic) (the Act) it included provisions empowering the Victorian Civil and Administrative...