In a legal context, capacity is the term used to refer to an adult person’s ability to make a decision for themselves.
The presumption is that every adult has the capacity to make decisions, which normally includes the ability to:
- Understand the facts and the choices involved;
- Weigh up the consequences of the choices;
- Communicate their decision.
There are situations where you might need to assess decision-making capacity as a friend, family member or other health care practitioners, and in some situations, you need to consider the specific legal test for capacity.
What is the legal test for capacity?
Unfortunately, there is no single legal test for capacity which will cover all types of decisions. It would normally depend on the nature of the decision, which affects the test for capacity.
Decisions can be related to personal life, health, or money and property, and each one would have its own considerations depending on nature of the decision.
As an example, to prepare an Enduring Power of Attorney, the legal test you are trying to establish is:
Q. Does the person understand the nature and effect of the Power of Attorney document they are signing at the time it is being made? (not before or after).
Q. Does the person understand the nature of appointing a Power of Attorney and are they familiar with the general notion of a Power of Attorney and the powers conferred on them?
And in answering the above, there are a number of additional questions you might ask, including: does the person know they are appointing someone to make financial decisions? Do they know the functions of the attorney? Do they know when the power takes effect? Do they know they can appoint two attorneys?
However, when, in assessing whether someone has the capacity to make their own financial decisions, you might consider these two questions:
Q. First, is the person capable of managing their own property and affairs? They don’t have to be able to manage them in the best possible way, they just have to be able to manage them. Issues to consider include whether the person is able to deal in a fairly capable way with the ordinary regular dealings in life so as to provide for their own welfare and anyone dependent on them, whether they understand their assets and outgoing expenses, and whether they can manage their money to provide food, clothing, medicine and other necessities.
Q. Second, if they can’t manage their affairs, is there a risk that they may be disadvantaged or harmed, or their money or property wasted or lost?
In addressing capacity it is important to avoid discrimination. Don’t assume a person lacks capacity based on age, appearance, disability, behaviour or any other condition or characteristic.
Before concluding lack of capacity, ensure that everything possible has been done to support the person to make a decision.
If all assisted decision-making efforts fail, then a determination that the person lacks capacity with respect to the decision is appropriate, and information can be sought from a substitute decision-maker. This is a last resort.
Substitute decision-making need not always be formal. It can be on an informal basis where the person has family, friends or carers who can make decisions for them when the decisions are not significant. More formal legal arrangements exist in the form of an advance care directive, an enduring guardianship, or a power of attorney, or by order of the Guardianship Tribunal, Mental Health Review Tribunal or Supreme Court.
For more information or advice concerning legal capacity, contact the experienced team at Rockliffs Lawyers today.