Risk Watch: Practitioners acting as Attorneys and substitute decision makers – professional indemnity

Practitioners acting as Attorneys and substitute decision makers – professional indemnity issues

GRANT FEARY, ACTING DIRECTOR, LAW CLAIMS

The Advance Care Directives Act 2013 (SA) (the ACD Act) was proclaimed on 1 July 2014. The objects of the ACD Act include enabling competent adults to give directions (“ACDs”) about their future health care, residential and accommodation arrangements and personal affairs and to express their wishes and values about those matters including by specifying outcomes or interventions that they wish to avoid (s. 9 ACD Act).

In the seven years that the ACD Act has been in operation, I think it is fair to say that there has been something of a “love-hate” relationship between the profession and the ACD Act. Some of the requirements of the ACD Act (e.g. with respect to the order of signing) have caused real practical issues but the good sense in having documents such as ACDs gain more currency must be of benefit.

Queries have arisen from within the profession as to whether or not practitioners should take on obligations as a Substitute Decision Maker (“SDM”) pursuant to an ACD. These queries have given rise to a number of different views – some practitioners have said that there is a need for practitioners to be able to take on such obligations, especially in relation to clients who may not have appropriate family members to appoint as SDM. Other practitioners however have said that they would not agree to any such appointment because of the inherent likelihood that any decisions made would lead to disputation.

This has led to the additional query as to whether, in the case of a practitioner taking on obligations under an ACD, the Professional Indemnity Insurance Scheme (“the Scheme”) would apply to those obligations. Whilst it is not possible to be definitive about the coverage provided by the Scheme or to bind Underwriters in the absence of a specific claim scenario, the definition of “Legal Practice” contained in the Scheme Documents relevantly provides that “Legal Practice” means “the provision of such legal services as are usually provided by a legal practitioner in private practice in Australia, while holding a current practicing certificate… including the acceptance of obligations as trustee, executor, administrator [or] attorney-under-power…”

It will be immediately apparent that the acceptance of obligations pursuant to a power of attorney are specifically included. No specific mention is made of ACDs. The question therefore arises are appointments as an SDM under an ACD a “legal service” usually provided by a legal practitioner in private practice in Australia. Clearly up until 1 July 2014 the answer must have been “No” because ACDs did not exist.

Opinions have been expressed that there are some important differences in the qualities of the obligations taken on by an SDM pursuant to an ACD as opposed to those taken on by the attorney pursuant to a power of attorney. Without descending into too much detail, under a power of attorney the attorney is essentially a discretionary agent with fiduciary responsibilities. Attorneys under Power generally deal with legal and financial issues.

As we have seen, the focus of ACD’s is on personal affairs, wishes, values, future health care and residential and accommodation arrangements.1

A view has been expressed by an experienced Counsel in this area that

decisions about health care, residential arrangements and personal affairs should be regarded as falling outside

the scope of “Legal Practice”. This would mean that acceptance of obligations as an SDM pursuant to an ACD would not be covered by the PII Scheme.

There may be a grey area though. This is because “Accommodation arrangements” which might be the subject of an ACD where those arrangements for example involve the sale of the family home to fund a place in residential care or a retirement village, overlap with such arrangements which would, if performed pursuant to a power of attorney, be within the scope of “Legal Practice”.

The question arises as to whether there is a groundswell of opinion within the profession that obligations under an ACD should be within the scope of “Legal Practice”? Ultimately any decision as to any change in the scope of the PII Scheme are matters to be debated by the Society Lawguard Management Pty Ltd, Underwriters and the Attorney-General, after considering all relevant issues. There may of course be consequences in respect of the premium payable to Underwriters if it is seen that the change expands Underwriters’ liability.

At the moment, however, given the indication that obligations under an ACD do not fall within the scope of “Legal Practice”, practitioners should not accept appointments as SDMs under ACDs and should limit their acceptance of obligations to powers of attorney.

It would be useful however if practitioners could provide any views they might have as to these matters to me – gfeary@lawclaims.com.au – so that we can gauge whether or not any change should be considered. B

Endnotes 1 It is noted that ACDs in effect replaced Medical

Powers of Attorney which were obviously not limited to legal and financial matters.