Lawyers Beware Bias

How can a wills and estates lawyer interview a donor for 2.5 hours, take 31 pages of detailed notes, determine the donor to have legal capacity to make an enduring power of attorney (EPA), and yet still have the resulting instrument be declared invalid? The answer, according to Justice Devlin in Martin v Hunter, 2021 ABQB 153, is bias.

The facts of the case would make any lawyer’s job fiendishly difficult:

  • An incapacitated donor who was very personable, was great at storytelling, was capable at repeating information supplied to her, and maintained herself in a well-kempt state,
  • The same donor being someone highly suggestible and keen to hide her dementia,
  • The same donor being someone who, like many with dementia, began to harbour delusions of financial misfeasance being perpetrated against her by her existing attorney,
  • A potential attorney who was easily convinced by the donor’s suspicions due to a lack of information on the donor’s mental state, a financial motive, and a negative history with the existing attorney, and
  • The same potential attorney being someone who retained a lawyer, withheld from him crucial facts, and primed him with unproven (and false) allegations against the existing attorney.

The unfortunate result was duelling EPAs, competing medical assessments, and considerable inconvenience for the medical professionals involved. It likely could have been avoided with more due diligence on the lawyer’s part, but this was made difficult to see because of a loss of objectivity and skepticism.

“It is clear from the Lawyer's notes that he believed he was walking into a situation of elder abuse and financial exploitation by an ill-intentioned family member who had improperly gained control over the elder's financial affairs. The urgency with which he approached the situation shows that he was doing his best to solve this 'problem' in a timely way."
- Justice Devlin

The Powers of Attorney Act, RSA 2000, c P-20, requires any donor of an EPA to be mentally capable of “understanding the nature and effect” of the EPA. As interpreted by Midtdal v Pohl, 2014 ABQB 646, the threshold for capacity this sets is low, but it means a donor must understand:

  • “the attorney would be able to assume complete authority over the donor’s affairs;'
  • “the attorney could do anything with the donor’s property that the donor could have done;'
  • “that the authority would continue if the donor became mentally incapable; and”
  • “would in that event become irrevocable without confirmation by the court.'

Establishing this understanding could involve inquiry into many factors, such as whether a donor: could distinguish between relevant individuals, was situated in time and place, had a minimal grasp on the nature of their assets and obligations, was driven by delusional thinking, or was acting on suggestions they could not process or evaluate.

The lawyer in this case missed several signs of incapacity:

  • The donor was speaking as if she was in the past and in a manner that was excessive and out of context,

  • The donor consistently got her late son’s name (and the lawyer’s name) wrong, and

  • The donor had little idea how much money she had or how it had arrived at her present location from her childhood home.

The lawyer did not corroborate verifiable, yet false, statements made by the donor:

  • That she had only for the first time, coincidentally on the day of her meeting with the lawyer, received her favourite breakfast from her care home,

  • That she had recently owned and had driven a vehicle, and

  • That her existing attorney was motivated by greed (despite having assisted the donor for many years).

The lawyer also missed inconsistencies in the donor’s stories, which indicated she was delusional, extensively coached, or at least an elaborate storyteller:

  • The donor said she had been called by a bank manager who personally made allegations of financial misfeasance and elder abuse against the existing attorney and yet who also took no action to address the situation.

  • The donor claimed she had gone to a different lawyer previously and told them her existing attorney wanted her entire estate but that she wanted it to entirely go to her grandsons. This was despite that no new documents were created from this fictitious meeting.

Lastly, a critical gap in the lawyer’s otherwise impeccable notes was that he did not record what he explained about the EPA to the donor or what she said in response. Those statements should always be recorded because they go to the heart of what is required by the Act. This left the Court without crucial insight into the donor’s capacity at the time of the EPA’s execution.

“[T]he Lawyer approached his task and obligations with diligence and good faith. He impressed me as sincere and dedicated to his client’s well-being. That said, his perspective on the matter was excessively influenced by what he was told by [the potential attorney], who hired him and paid the bills. This case provides a cautionary tale for lawyers who are drawn into complex and often highly conflictual family dramas surrounding older people’s money."
- Justice Devlin

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