XN000022-1997-01-08 — Page 24

9.

A power of attorney is an arrangement whereby one person empowers another to act on his behalf and in his name. Unfortunately, as the law now stands a power of attorney is automatically revoked when the donor of the power loses the mental capacity to enter into contracts or exercise his or her legal rights in other ways. Thus, the holder of a power of attorney loses the power to act in the management of a person's affairs at the very time when his or her assistance is perhaps most needed.

The need for a power of attorney which is capable of surviving the onset of mental incapacity has been felt for some time. Many countries in the common law world have already introduced legislation to provide for a mechanism of this kind, which is known as an enduring power of attorney. We have been able to draw on such legislation in preparing our own proposals for dealing with the problem.

The proposals contained in the Bill have been the subject of consultation with the legal profession and other interested organisations such as the Hong Kong Council of Social Service and the Hospital Authority. The need for some kind of enduring power of attorney was evident from the responses to that consultation. With substantial numbers of Hong Kong people emigrating in recent years, there has been a growing need for owners of property to create powers of attorney for the administration of property which they are no longer able to manage personally. At the same time, chronic and degenerative illnesses affecting mental capacity have become more common in the community, as the proportion of old people increases.

Existing legal procedures for managing the affairs of a mentally disordered person are cumbersome, time-consuming and costly. They require an application to the High Court for the appointment of a receiver to manage that person's property and affairs. Such an application is normally made by a close relative or friend. But the serious drawbacks of the present system are likely to deter most people from seeking the assistance of the court when this is called for.

There can be little doubt that there is a need for a less complicated means of dealing with the problem. This Bill is designed to meet that need by providing a simple, straight-forward and inexpensive legal mechanism. I will now describe the main provisions in the Bill.

Under clause 3, an enduring power of attorney must be executed in a form which will be prescribed by regulations and which contains certain prescribed explanatory information. Clause 5 provides that the instrument creating the power must be signed by the proposed attorney, and must be executed by the donor in the presence of both a solicitor and a registered medical practitioner. The solicitor is required to certify that the donor of the power appears to be mentally capable, whilst the medical practitioner must be satisfied that the donor is mentally capable. For these purposes the Bill adopts a new definition of mental incapacity, which I will explain when introducing the Powers of Attorney (Amendment) Bill later this afternoon,