Zipser, Ben --- "Capacity to give instructions - practical guidance for lawyers" [2018] PrecedentAULA 17; (2018) 145 Precedent 9

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CAPACITY TO GIVE INSTRUCTIONS

PRACTICAL GUIDANCE FOR LAWYERS

By Ben Zipser

The issue of whether a client has mental capacity to give a lawyer instructions or make their own decisions in respect of financial or other matters concerning their affairs occasionally arises for lawyers.

In some cases, it may be obvious that the client does not have such capacity, such as where they are disorientated about where they are and are clearly unable to comprehend what is being said to them. In other cases it may be less clear. This article provides some practical guidance to assist lawyers in determining whether their client has mental capacity to give instructions and make decisions.

This article borrows from a publication of the Law Society of New South Wales entitled When a client’s mental capacity is in doubt – A practical guide for solicitors, published in 2016 (the NSWLS Practical Guide). Some other government and regulatory bodies in Australia have published similar guidelines: see, for example, Queensland Handbook for Practitioners on Legal Capacity published by the Queensland Law Society, and the LIV Capacity Guidelines and Toolkit, published by the Law Institute Victoria.

STANDARD FOR MENTAL CAPACITY DEPENDS ON NATURE OF ACT

Whether a client has mental capacity in respect of a particular act will vary with the nature of that act. In Guthrie v Spence^[1] the New South Wales Court of Appeal stated:

‘Under the general law there is no single test for capacity to perform legally valid acts — rather, capacity is decided, in relation to each particular piece of business transacted, by reference to whether the person has sufficient mental ability “to be capable of understanding the general nature of what he is doing by his participation”, and concerning any legal instrument “is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained”: Gibbons v Wright [1954] HCA 17; (1954) 91 CLR 423 at 437–8. Thus, capacity of both children and adults to give evidence is dependent, in broad terms, on being able to understand the nature and significance of the task that is involved in giving evidence ... Capacity to consent to medical treatment depends on the ability of the person in question to understand fully what is proposed ... The familiar test of testamentary capacity ... is dependent on being able to carry out the particular tasks involved in understanding and evaluating the matters that need to be taken into account in deciding what one’s testamentary dispositions will be. Capacity to marry is dependent on being able to understand the nature of the relationship of marriage ...’ (some citations omitted)

It follows from the above that ‘one person could have capacity to perform one task, but lack capacity to perform a different task’: Guthrie v Spence.^[2] For example, a personal injuries plaintiff might have capacity to make decisions concerning the litigation including whether or not to settle, but lack capacity to decide (even with advice) how to administer a large award (Masterman-Lister v Brutton & Co^[3]); and a testator who may no longer have mental capacity to make a will disposing of her valuable estate may still have capacity to revoke a particular gift in respect of a will previously made: D’Apice v Gutkovich.^[4]

SOME PRINCIPLES IN ASSESSING MENTAL CAPACITY

When a client’s mental capacity may be in issue, the NSWLS Practical Guide proposes some principles in considering the issue. Some of the principles are as follows:

1. Commence with the presumption that the client has mental capacity. This reflects a common law presumption that every adult person has legal capacity to make their own decisions.^[5]

2. As explained above, whether a client has mental capacity in respect of a particular act will vary with the nature of the act. In short, capacity is decision-specific. If a client has capacity to make some decisions, but not others, they have the right to make those decisions that they have capacity to make.

3. A person’s mental capacity can fluctuate over time or in different situations. A client may lack mental capacity to make a decision at a particular point in time, but have capacity to make a decision a few days later, if their mental capacity has naturally improved in the intervening period or they have taken medication which has reduced or overcome the mental capacity impairment. Where a client’s mental capacity fluctuates over a period in which a client makes decisions, the lawyer may need to assess the client’s mental capacity for each decision.

4. The lawyer should assess a person’s decision-making ability, and not the decision they make. A client should not be assessed as lacking mental capacity because they make a decision that their lawyer considers unwise or reckless.

5. Substitute decision-making is a last resort. Before a lawyer concludes that their client does not have mental capacity, the lawyer should ensure that everything has been done to support the client in making a decision.

INDICATORS OF LACK OF MENTAL CAPACITY

The NSWLS Practical Guide lists some warning signs or red flags that may suggest that the client’s mental capacity is in issue. Some warning signs are as follows:

• A client demonstrates difficulty with recall or has memory loss.

• A client is disorientated.

• There is a sense that ‘something about the client has changed’, including deterioration in personal presentation or mood, or social withdrawal.

• A client shows a limited ability to interact with the lawyer, repeat advice to the lawyer and ask key questions about the issues.

If warning signs exist, the lawyer should conduct an initial capacity assessment by interviewing the client. In relation to the interview, the NSWLS Practical Guide recommends that the lawyer ask open-ended questions rather than questions which can be answered ‘yes’ or ‘no’; frames questions to quickly identify areas of concern for which the client may need support or help; and ensure that it is the client being assessed who answers the questions.

MENTAL CAPACITY ASSESSMENT FROM MEDICAL PRACTITIONER

In some cases a lawyer may be able to conclude, without the assistance of expert medical opinion, that a client has, or does not have, mental capacity to give instructions or make decisions in respect of financial or other matters concerning the client’s affairs. Where a lawyer is in doubt, it may be prudent or appropriate for the lawyer, subject to obtaining instructions from the client, to obtain a mental capacity assessment of the client from a medical practitioner with experience in assessing cognitive capacity, such as a psychiatrist, psychologist or geriatrician. The lawyer should take care in drafting the referral letter for a mental capacity assessment. The NSWLS Practical Guide recommends that the referral letter sets out matters including the client’s background, the purpose of the referral, the relevant legal standard of mental capacity to perform the task at hand, and information about the client’s social or living circumstances.

A mental capacity assessment report from a medical practitioner may conclude that the client has, or does not have, mental capacity in respect of the task in question. However, such a report is only one source of evidence relevant to whether the client has mental capacity in respect of the task. Ultimately, the lawyer must make a final legal judgement, taking into account the mental capacity assessment report, about whether the client has mental capacity in respect of the task.

Ben Zipser is a barrister at the Sydney Bar, with a broad practice, principally commercial. PHONE [phone] EMAIL [e-mail].

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^[1] [2009] NSWCA 369, [174].

^[2] Ibid, [175].

^[3] [2002] EWCA Civ 1889; [2003] 1 WLR 1511; [2003] 3 All ER 162, [27].

^[4] [2010] NSWSC 1333, [96].

^[5] See, for example, Goddard Elliott v Fritsch [2012] VSC 87.