One advantage of doing so is to avoid your loved ones having to apply for a guardianship order to make decisions about you. These decisions are likely to cover your personal welfare (e.g. care arrangements and medical treatment) as well as financial decisions, so ensuring your Power of Attorney includes welfare powers is essential.

However, in some situations, a guardianship application may still be needed even though the person has signed a Power of Attorney. An Attorney in Scotland generally cannot make a decision about an incapable adult which would result in them being subject to a "deprivation of liberty". This has been defined by the UK Supreme Court as a situation where the incapable adult is "under continuous supervision and control and not free to leave” (P v Cheshire West and Chester Council and Anor, 2014 UKSC 19). This so-called "acid test" is a relatively broad definition and accordingly may be met by living arrangements that look fairly uncontroversial.

The quality of the care or the good intentions of the carer are not the point: as Lady Hale observed in Cheshire West, "a gilded cage is still a cage". The rationale is that persons with disabilities are equally entitled to the protection of the European Convention on Human Rights (ECHR). Article 5 of ECHR provides that no "person of unsound mind" shall be deprived of their liberty except "in accordance with a procedure prescribed by law". So, while a deprivation of liberty of an incapable adult is possible, it must be lawfully authorised.

Although a validly executed Power of Attorney is a legal instrument, for a number of reasons it is generally regarded as not meeting the requirements of Article 5. This means it is insufficient to enable an Attorney to authorise a deprivation of liberty (although this point can be debated, especially if there is specific provision in the deed to waive Article 5 rights). This has practical implications for many Attorneys. If an adult is noncompliant with proposed care arrangements (e.g. a move into residential care where they want to stay at home) it is not uncommon for the social work team to suggest that moving them would constitute a deprivation of liberty. Also, any regular or frequent restraint of an incapable adult is usually a deprivation of liberty, even if it is done for their own protection.

As well as being fundamentally inappropriate in terms of Article 5, depriving someone of liberty without proper authorisation leaves the Attorney and other organisations involved (e.g. a public authority) potentially liable to a damages claim by the incapable adult for breach of their Article 5 rights. There have been a number of such claims in England, some involving substantial amounts.

In my experience, welfare Attorneys in the kinds of situations outlined above are likely to be advised by the social work department to apply for guardianship. A guardianship order can operate  alongside the Power of Attorney. It does not need to reproduce the powers in that deed - the applicant will seek only the specific powers which require authorisation, such as a restraint power. A guardianship application meets the procedural requirements of Article 5 (JM v Aberdeenshire Council, 2017 CSIH 65), so an appropriately framed order will be regarded as sufficient authorisation. This approach also means that a further order requiring the adult to comply with a decision, including a warrant for their return to care, can be sought under s70 of the Adults with Incapacity (Scotland) Act 2000. A welfare Attorney cannot seek this order - only a welfare guardian can apply for it.

There is a principled rationale behind this approach that is supported by European and Supreme Court jurisprudence. However, there is also a tension between the requirement for judicial oversight of actions which may restrict autonomy, and the importance of respecting an autonomous choice to appoint an Attorney. The requirement for welfare guardianship also has an impact on resources such as MHO and psychiatrist availability. It will be interesting to see how this plays out in the context of the ongoing review of incapacity and mental health in Scotland, given the focus on respecting the "rights, will and preference" of incapable adults and supporting their "exercise of legal capacity" (Article 12, United Nations Convention on the Rights of Persons with Disabilities).

This is a developing area of law with new decisions emerging from the Sheriff Court to Supreme Court level, so expect more controversy to come. In the meantime, though, a Power of Attorney remains an essential document no matter what your age or health status. It's important to consider who you wish to nominate to make decisions about your personal welfare as well as your finances if you are no longer able to do so in future. So it's still good advice to prepare a Power of Attorney while you still can.