Review of Adult Decision-Making Capacity Law
The Law Commission recently issued Report 151 – “Review of Adult Decision-Making Capacity Law”, which proposes a complete overhaul of our laws governing adult decision-making capacity. The recommendation is to repeal the Protection of Personal and Property Rights Act 1988 (PPPR Act) and replace it with a modernised legislative framework.
Core Philosophy and Purpose
A new Act would shift the focus from “protecting” individuals to promoting their equality, dignity, and autonomy. Its design is to bring Aotearoa New Zealand into line with the UN Convention on the Rights of Persons with Disabilities. It requires decision-makers to consider tikanga Māori where relevant.
Key Proposed Changes
1. A Standardised Capacity Test: The proposal introduces a single, standardised test for decision-making capacity. A person will only lack capacity if—even with support—they cannot understand, retain, use/weigh relevant information, or communicate their decision. The Act would retain the general presumption of capacity.
2. Shift to “Supported” Decision-Making: A major conceptual shift is the introduction of a Formal Support Regime. People can appoint “formal supporters”, or have the Family Court appoint them, whose sole job is to help the person make their own decisions. Crucially, there is a prohibition on a formal supporter from deciding on behalf of the person.
3. Strict New Rules for Representatives (Substituted Decision-Making): When Court-appointed representatives make decisions on someone’s behalf, these three strict Decision-Making Rules bind them:
- Rule 1: Decisions focus on the represented person’s wishes and values; shifting away from a pure “best interests” test.
- Rule 2: The person participates in the decision to the greatest extent possible.
- Rule 3: Relevant material information informs decisions, noting that the Family Court will only appoint representatives if it is the least restrictive intervention available.
4. Modernisation of Enduring Powers of Attorney (EPAs): The proposal retains EPAs and updates them for modern practice. Key changes include:
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- Donors may appoint multiple attorneys for the same decisions, either jointly or severally.
- Permits remote execution and witnessing via audio-visual link.
- Restricts welfare attorneys from deciding on “significant matters”, such as entering residential care, without a formal capacity assessment or a Family Court determination.
5. Centralised Oversight and Dispute Resolution: The Commission recommends establishing an agency to maintain the new EPA register, run a complaints mechanism, examine financial records, and potentially offer dispute resolution services.
Implications
The policy is a fundamental paradigm shift for clients considering private wealth management, practitioners in elder law, and family law clients. While the proposal is at the policy proposal stage, we should prepare for the eventual legislative transition. Lundons Law will track the Government’s response to Report 151 and whether it introduces a Bill to Parliament.
Existing current EPAs remain valid for now, but the law is modernising. For clients structuring their estate and capacity planning, we can help with a “wishes and values” discussion. We encourage you to document your values to make it significantly easier for your attorneys to comply with the proposed Decision-Making Rule 1.
For clients dealing with Family Court property or welfare orders, we expect that future reviews of these orders will lean heavily toward the “least restrictive” options, potentially transitioning from representative orders to formal support arrangements.
You are welcome to contact us to discuss the proposed changes.
