‘Excessive’ LPA fees to be refunded

News Article

A government body has admitted it has been charging ‘excessive’ Lasting Power of Attorney fees for the past four years and has pledged to offer refunds to those affected.

The Office of the Public Guardian (OPG), which protects the financial affairs of people who lack mental capacity for making decisions, is an offshoot of the Ministry of Justice.

The OPG has admitted that the fees it charged were above the costs involved in order to process the application – something which government agencies are unable to do without specific legislative permission.

The OPG has attributed the error to the surge in LPA registrations it has dealt with in recent years, stating: “Increased volumes, coupled with greater efficiencies in processing applications, have resulted in fees being charged above the operational cost of delivering the service, without the Ministry of Justice having exercised the power provided by legislation to allow us to do this.”

The excess charges, which total an estimated £89million, will be refunded to those affected during the current financial year.

Outlining improvements it intends to implement, the OPG statement continued: “We are committed to taking such steps as are necessary to make sure that people are made aware of, and receive, the refunds to which they are entitled.

“We will be working closely with the MoJ and its new income strategy unit, which will oversee the standards and controls set for all income streams. We have also made a number of improvements to the way in which we forecast demand and associated costs, in order to enable us to base fee proposals on robust evidence and to ensure compliance with requirements set by HM Treasury.”

Tim Steele, a Partner with Palmers, who specialises in Lasting Powers of Attorney arrangements and older client matters, said: “This announcement is certainly good news and reduced fees will hopefully lead to more people taking the prudent decision to put in place an LPA.

“Making such an arrangement allows you to choose someone you trust to manage your affairs in the event that you lose mental capacity at some point in future. Ordinarily people will appoint a close relative or friend to fulfil the role of attorney.

“With a LPA in place you will have peace of mind that you have appointed an attorney who can speak for you should the need arise.”

For advice on the process for making a Lasting Power of Attorney, please contact us.