Powers of Attorney: The legislation

Many people who are appointed as Attorneys are not aware of their obligations and responsibilities and may view the Attorney as all encompassing. The experience of SRV’s casework team is that this can sometimes mean that the Principal (the person who created the document) is excluded from the decision-making process and has decisions imposed upon them.

In September 2015, Victoria’s Power of Attorney Act VIC 2014 (the Act) came into operation. It sets out the obligations and duties of an Attorney in some detail. An Attorney is appointed to make decisions on behalf of someone else known as a Principal. An Attorney may be appointed to make financial and/or personal decisions.

The Act imposes responsibilities upon an Attorney including that they must:

  • act honestly and diligently
  • act with reasonable skill and care
  • not use their position for personal gain
  • avoid conflicts of interest
  • keep accurate records and accounts
  • not disclose confidential information.

Critically, from SRV’s point of view, the making of a Power of Attorney does not mean that the Principal can no longer make decisions for him/herself. In fact, if the Principal has capacity, the Act states that an Attorney must involve them in decision making and consider their wishes. If the Principal lacks decision-making capacity, an Attorney must act according to the Principal’s interests and consider their well-being. The Attorney must exercise their Attorney in the least restrictive way having regard to the Principal’s capabilities.

Under the Act, if there are concerns about the behaviour or actions of a financial Attorney, the Victorian Civil and Administrative Tribunal (VCAT) may order an Attorney to provide details of how they have been managing the Principal’s finances. VCAT may also order an Attorney to pay compensation to a Principal in circumstances where the Attorney has misappropriated funds belonging to the Principal. This provision for an order of compensation by VCAT is a new aspect of the 2014 Act and only applies where money has been misappropriated or mismanaged post September 2015. The Act also provides that where VCAT considers the Attorney’s behaviour to be dishonest, it may refer the matter for criminal prosecution.