When a client instructs a professional to act, that person has a duty to be satisfied the client has the capacity and capability to give those instructions. This duty applies to lawyers and certain other professionals in Australia. For professionals working with private clients this is a broad-ranging duty that applies to client decisions of significance affecting their health, wealth and wellbeing.

This situation arises particularly when client decision making involves:

  • substantial transitions (eg changing living arrangement),
  • contract-based transactions such as not only approval of a financial plan, tax returns or accounts, but also signing a will or other estate administration and personal representation documents, or
  • consent or refusal to medical treatment.

A contemporary review of the duty is required due to four escalating developments in 2020 – pandemic social distancing, signature and witnessing over audiovisual media, virtual meetings and remote collaborative computing. This is a review ending with eight practices and procedures drawing on advisory information provided by Lawcover Insurance Pty Ltd and The Law Society of New South Wales.

When considering a client’s capacity an open question for professionals involved in the evaluation is: What client behaviour demonstrates the client is engaged and has capacity and capability, or in other words is an autonomous decision maker? Asking this question explores whether there exists any cause for doubt about a client’s legal capacity. The question is in line with the enquiry recommended by Justice Kunc in Ryan v. Dalton:[1]

A solicitor should always consider capacity and the possibility of undue influence, if only to dismiss it in most cases.”

Traditional approach to the legal capacity question

Now the traditional approach to the capacity question by lawyers has been to assume that a client has capacity, that legal capacity exists unless there is evidence to the contrary. A problem made evident by recent neuropsychology research is that the assumption in the traditional approach locks lawyers into making a binary choice, selecting either a green light to proceed with instructions or a red light to pause, query capacity or decide it is not in evidence.

The need for evidence of capacity is a constant. Only with it can a lawyer ground a conclusion that is defendable if required in any subsequent court case or other enquiry. Hence evidence has been sought of behaviour that demonstrates client knowledge of a proposed decision, client understanding of the purpose served by a proposed decision and therefore evident ability residing in the client to approve the making of the proposed decision, signature of a document or other instructed outcome.

The legal capacity question when audiovisual devices are used

This traditional approach requires review in light of Australian state and territory human rights legal developments, pandemic social distancing laws, and the escalation in 2020 in use of remote collaborative computing for legal advice, signature and witnessing.

The directions in human rights law can be stated succinctly. New South Wales and other jurisdictions in Australia are transitioning to apply rights-based and supported decision making methods for health, medical and legal care. This requires a higher quality of evidence and recognition that a client’s capacity sits on a spectrum, rather than at a green or red light.

Relatively recent research makes clear that in an ageing society mild cognitive impairment affects a higher percentage of the population and its onset may be 20 years before it is recognised. How many significant decisions may be made in that 20 year period? The concern shared by professionals dealing with clients is acute, particularly mature-aged clients and clients experiencing heightened metal health issues be they from unemployment, loss of income, loneliness or medical factors. As clinical neuropsychologist Dr Jane Lonie observes:

Professionals are reasonably good at recognising the less complex cognitive functions that impact on decision making and legal capacity, such as comprehension or communicating. They are generally considerably less good at recognising the higher-level aspects of cognitive function that impact on decision making capacity, such as executive brain functions.”

New pandemic period regulation for document witnessing

The NSW Government in April 2020 recognised that facilitating signature of documents by witnesses is an immediate area of concern when law triggered by COVID-19 health concerns requires social distancing, except in exceptional circumstances.

The Law Society of NSW explains two of the functions served by having documents witnessed: “By attesting a document, the attesting witness, being a person who does not have a personal interest in the document; … certifies that the document was signed voluntarily; … and represents that they attested at the time they witnessed the signature by the signatory.[2]

The Government introduced new law for witnessing documents governed by NSW State law during the COVID 19 pandemic for a period of six months from 22 April 2020 unless the NSW parliament decides otherwise. For use of audiovisual links, to complete a conventional physical signing of documents, new approaches to witnessing or attesting of documents apply under new regulations[3] with the objective to:

(a)     provide that documents that require a witness may be witnessed by audio visual link, and

(b)     provide that tasks in relation to witnessing a document may be performed by audio visual link, and

(c)     allow an oath, declaration or affidavit required for a purpose specified in section 26 of the Oaths Act 1900 to be taken or made before an Australian legal practitioner, and

(d)     to allow a statutory declaration to be made before a person before whom a statutory declaration under the Statutory Declarations Act 1959 of the Commonwealth may be made.

Strict compliance with the regulation is needed for defence of the validity of the document concerned.

Remote witnessing does not make prudence redundant

Lawyers and other professionals need practical guidance to following given the new mix of considerations involving:

  • a continuing duty to evaluate client capacity,
  • the NSW Government’s introduction of new law for witnessing using audiovisual media, and
  • the increasing use of audiovisual devices in place of traditionally face to face interactions.

Despite the promise of efficiency and time saving with technology and paperless arrangements, electronic transaction advantages do not make redundant many traditional practices and procedures. Neither e-signatures, nor wet signatures observed or monitored with audiovisual communications, make irrelevant a professional’s application of time and costs to ensure decisions and transactions involving a client will be binding and can be defended.

With documents requiring witnessing and attestation, electronic signatures should not normally be used. For circumstances involving use of electronic media, The Law Society of NSW’s 2018 fact sheet “FAQ on Electronic Witnessing of Signatures[4] sets out many hurdles in the law for signature and witnessing that can only be overcome by establishing very clear processes for signature and witnessing that comply with the law. It states that where a document has been incorrectly witnessed “the document may not have the intended, or any, legal effect.”[5] In a case where the incorrect witnessing is by a solicitor that may “lead to liability for misleading conduct or negligence, … or amount to unsatisfactory professional conduct.”

In using audiovisual devices and remote collaborative computing and for compliance with social distancing laws clients and their advisers require practical assistance, to which we now turn.

Eight practices and procedures

  1. Preliminary confirmations
  1. Beware of opinion masquerading as evidence. Take steps to be satisfied you can assume the legal capacity of the parties or otherwise have sufficient evidence that may validate the capacity of the client. Use appropriate experts to validate the decision making ability of a person to undertake the transaction. The Capacity & Capability Clinic at MQ Health is available to help.
  2. Set the expectations of the client on what is to take place in any virtual meeting occurring through the agency of audiovisual technologies. Give the client advance notice that alternatives and options may arise in the approach to be taken if there is any escalating complexity in the nature of anticipated events.
  3. If e-signatures are to be used, co-signatories and multi-party document signatories should in some way acknowledge in writing that they consent to be bound by their electronic signatures. This can be by way of expanding attestation clauses such as those used relating to section 10 the Electronic Transactions Act 1999 (Cth).
  4. Take steps to ensure the principal signatories and witnesses are reasonably satisfied that the document being signed is the same as the document or copy of the document to be signed by each party. The facts and steps taken to complete this should be recorded. This could involve, for example, at the start of a virtual meeting a real time read over or page turn comparison. The method used should be included in the meeting record.
  5. Take steps to inform the client about any additional costs being incurred by the use of remote witnessing or signing and document any agreement to those additional costs.
  1. Witnessing: The witnessing of documents involves special processes.
  1. The witness must observe the person signing the document in real time. This means that the camera angle will need to allow the witness to see both the face and the signing hand of the person signing the document.
  2. Two ways are set out in the NSW regulation for signing as a witness.
    1. The witness may sign a counterpart of the document as soon as practicable after witnessing the signing of the document.
    2. Alternatively, if the signatory scans and sends a copy of the signed document electronically, the witness may countersign the document as soon as practicable after witnessing the signing of the document.
  3. If the document being witnessed is a will, to meet the requirements of section 6(1)(c) of the Succession Act 2006 (NSW), the will maker should also observe each witness signing the counterpart or copy document in real time.
  4. The witness must endorse the document, or the copy of the document with a statement that specifies the method used to witness the signing and that the document was witnessed in accordance with the Electronic Transactions Regulation 2017 (NSW).
  5. When seeing a client by audiovisual link, if the client is making an enduring power of attorney, the prescribed witness needs to provide a certificate that they explained the effect of the power of attorney to the principal before it was signed and that the principal appeared to understand the effect of the power of attorney. A record should be kept of the discussion with the principal that satisfied the prescribed witness of the matters certified.
  1. Recordings: Under section 7 of the Surveillance Devices Act 2007 (NSW) it is unlawful to secretly record private conversations on a listening device, which includes a device that can overhear, record, monitor or listen to a conversation. If the audiovisual meeting is to be recorded on a “listening device” the convenor of the meeting should obtain ideally express (or at least implied) consent of all parties to the making of that recording on that device, as it is a requirement of the Act.
  2. Evaluate capacity and recognise it is decision, situation and time-bound: Whether or not a professional is meeting a client face to face[6] it is important to consider and test each client’s mental capacity and decision making ability to do what they are proposing. Since capacity is situation and decision-specific, knowledge and approval of a decision or document has to be demonstrated in the context of each specific meeting at which a client binds to the decision or document. Do not rely on evaluation of a client made in a recent month or year or relating to another situation or context. While 8% of 60 year olds have mild cognitive impairment the gradation is considerable for many, with 37% of persons aged between 70-90 having mild cognitive impairment. Be aware of the limits of the decision making ability of the parties to the document. Simply assuming capacity in the face of evidence a person has constrained decision making is not recommended.
  3. Check sufficient evidence of the meeting is recorded: Circle back to check the evaluation of the decision making ability of the client. Assuming capacity without evidence creates exposure to claims that conclusions were not valid, efficacious or defensible. Therefore, ensure there is a record of evidence by which the legal capacity of the client is assumed.
  4. Cautions: Lawyers should exercise the usual caution to prevent fraud and undue influence and to assess capacity.
  1. A basic need is to verify a signatory’s identity with documents such as a drivers licence, passport or medicare card.
  2. Ordinarily lawyers would see a client alone to check that the client is acting voluntarily and not being unduly influenced by another person. In audiovisual meetings, it may be appropriate to check the signatory is alone to avoid possible undue influence.
  3. Consider asking for a video camera scan of a room. A range of capacity evaluation questions should be asked to consider the decision making ability of a signatory as is usual and normal practice. Dr Lonie, a frequent expert witness in cases involving wills and estates says:

If you ask a client with any level of cognitive incapacity whether they are being influenced in making a decision it can be a total waste of time, as they are unlikely to say that they are. Given the way that those who exercise undue influence operate, a better approach for extracting evidence is asking the client to explain the purpose of the proposed decision in their own words.”

  1. File notes: Make and keep file notes of the meeting including the reason that the meeting is taking place by audiovisual link and the process taken to establish the efficacy of the meeting.
  2. Counterpart document file management: Witnessing by audiovisual link results in each signatory wet signing a separate but otherwise identical document. Each should be stored together in a compendium to preserve the totality of the records of the signing event. It is useful to include in that compendium a certificate to the effect of the New Zealand Law Society certificate template reproduced in the appendix below.

It is clear from this guide that remote signature, witnessing and advisory work needs a solemn approach and attention to each of the eight practical steps discussed above.

Best practice for professional practices is to be engaged in not only signatures and witnessing, but also recording adequate and appropriate evidence on the validity and efficacy of such mechanisms for acceptance of transactions. Such security is central to the value expected from professional advice.

In cases where there are doubts about the decision making ability of a person then a more extensive evaluation of their ability and a supervised execution session is needed. In cases where there are doubts it may be prudent for a professional to elect to not proceed with a proposed decision, signature or other activity without further assurance. In many of these difficult or complex decision making cases the Capacity & Capability Clinic at MQ Health and Autonomy First lawyers can help.

=======

ABOUT THE CAPACITY & CAPABILITY CLINIC

The Capacity & Capability Clinic at Macquarie University Hospital can provide a structured and blended medico-legal consultation. Consultation may be face to face or in video conferencing or other communication facilities hosted by the Clinic eg Zoom, Microsoft Teams or Skype.

The Clinic is co-seated by clinical neuropsychologist Dr Jane Lonie and wills and estates lawyer Michael Perkins TEP. Jane and Michael have a combined experience approaching 60 years in professional practice serving individuals and families. They are active too in professional education and training for their peers. They can provide consultation independent of other contributing professionals already retained by a client, that can efficiently address the matter of a person’s capacity and capability in various contexts.

For direct appointments or referrals, contact MQ Health to discuss consultation hosting needed for any case or matter | capacity@mqhealth.org.au | Phone (02) 9812 3997. Face to face client appointments are conducted at MQ Health, Suite 401, Level 4, 2 Technology Place, Macquarie University unless otherwise arranged.

For direct legal assistance contact Autonomy First Lawyers Pty Limited Phone 1300 31 42 82 or Email enquiry@autonomyfirst.com

IMPORTANT DISCLAIMER

This guide is an overview for general guidance only. They do not replace the need for advice on individual cases. For specific advice , a person’s particular circumstances must be taken into account and a Capacity & Capability Clinic or Autonomy First Lawyers consultation is offered.

END NOTES

Photo credit: Couple considering documents, Haley Phelps, Unsplash

[1] para 107, Ryan v Dalton; Estate of Ryan [2017] NSWSC 1007 (31 July 2017)

[2] https://www.lawsociety.com.au/sites/default/files/2018-07/LS2976_LegalTech_Witnessing-electronic-signatures_FAQ.pdf

[3] https://legislation.nsw.gov.au/regulations/2020-169

[4] https://www.lawsociety.com.au/sites/default/files/2018-07/LS2976_LegalTech_Witnessing-electronic-signatures_FAQ.pdf

[5] Netglory v Caratti [2013] WASC 364 at [146], [309]; Ellison v Vikicevic (1986) 7 NSWLR 104 at 112)

[6] See Law Society of NSW document covid-19 Witnessing of Documents_FAQ Combined 23 April 2020_0.pdf

APPENDIX – New Zealand Law Society certificate template

Certificate Concerning Administration of Oath or Declaration[7]

I [   ], barrister / solicitor, of [  ] certify as follows:

  1. On [time and date] I was asked by a person [known to me as / who identified themselves to me as] [deponent’s name appearing in the affidavit or other document] (“the deponent”) to administer that person’s [oath / declaration / affirmation] on a document described to me as [for example: an affidavit to be filed in the Family Court].
  2. Because of the mandatory isolation requirements and restrictions on movement resulting from the government’s COVID-19 virus Alert Level 4, and the consequences of the Epidemic Preparedness (COVID-19) Notice 2020 issued by the Prime Minister on 25 March 2020, I was not present with the deponent when I was asked to administer that person’s [oath/declaration].
  3. I attended to a form of attestation adopting the following procedure:

[For example …]

  • The deponent and I met by audio-visual link at [eg 10am on Tuesday 31 March 2020]. The audio-visual link system we used was [eg Zoom/Skype];
  • I asked the deponent to identify him/herself to me by name and to hold up to the camera his/her photograph and personal identification page from his/her passport. I observed the [eg passport/driver’s licence] and satisfied myself that the person in the photograph was the person meeting with me by [eg Zoom/Skype];
  • [Alternatively, I know the deponent because [eg they are a regular client of mine and have been for the last 10 years.]
  • I asked the deponent to expose to the camera the document intended to be attested including the affidavit/declaration itself and the exhibits. I observed the document to be the unsigned affidavit of [deponent] in the [eg Family Court at Auckland, file no. FAM XXX-2020];
  • I then watched the deponent place the document down on a desk in view of the camera and I witnessed the deponent signing the jurat page and initialling each preceding page. The deponent held each page of the signed or initialled document up to the camera. I then asked the deponent to scan the document and send it to me. I received it at [time and date];
  • I was satisfied that this was the same document that I had seen the deponent sign, as far as it was possible for me to do so by following these procedures. I attested a copy of the scanned document and then sent it back to the deponent.
  1. I am unaware of any circumstances to show either that:
    • The deponent was not the person identified to me; or
    • The signature on the document was not the deponent’s signature.

Signed: ………………………………….. Barrister and Solicitor

Dated: ……………………………………

[7] See the information at https://www.lawsociety.org.nz/practice-resources/the-business-of-law/legal-practice/opinion-administration-of-oaths-and-declarations-in-circumstances-of-mandatory-self-isolation