Author: Tom Dumont (2001)

Tom Dumont examines the position of financial institutions dealing with attorney instructions and
the probems for them in ignoring misuse of such powers
(taken from Isssue No 15 – April 2001

A bank or other financial institution may rightly think that the scales of justice are finely balanced. On one side is the devil and on the other the deep-blue sea. The institution can be liable for failing to act on a customer’s instruction, but can also be liable if it does act on a customer’s instruction. Nowhere is this difficulty more sharply etched than with enduring powers of attorney (EPAs). The problem arises from the fact that, in law, the attorney’s instructions are the customer’s, but in reality of course the attorney is not the same person as the customer, and the customer probably has no idea what is happening. The Master of the Court of Protection has estimated that as many as 15% of EPAs may be operated improperly or fraudulently. That is a shockingly high proportion, which must send a shiver through any bank that stops to think about its ramifications.