Assessing Legal Capacity: Protect your client and yourself
The question of when to have capacity formally assessed frequently arises in legal practice.
There is a common law presumption that adults are competent to validly enter transactions or execute documents that require legal capacity, but there is no fixed standard for what constitutes legal capacity.[i]
The capacity required depends on the transaction in question and may vary significantly. For example, there are different tests of the capacity required to make a will, appoint an enduring power of attorney, contract a marriage, give a gift, enter a mortgage, settle a trust, enter a plea, consent to medical treatment or sign a DNR, or to provide instructions.
The corollary of the above is that a client with mild dementia who is subject to a guardianship order may still have testamentary capacity,[ii] or a client who has legal capacity to enter into a marriage may not have testamentary capacity.[iii] This means that the assessment of cognitive capacity must be finely tuned to the exact transaction at hand.
A legal practitioner who is aware of facts which may indicate a lack of capacity to provide instructions in respect of the specific transaction has a duty to their client, and potentially to third parties,[iv] to take sufficient measures to be satisfied that their client has the required capacity.[v]
Warning signs may include “withdrawal, lack of motivation and confusion, anxiety, inability to make decisions, pay attention, remember short-term matters”, evidence of dementia including “loss of short term memory, general decline in intellectual ability and judgment, confusion, disorientation” as well as other more overt signs of mental disease or deterioration.[vi]
If in any doubt, a prudent solicitor will protect their clients’, and their own, position[vii] by seeking a formal assessment of cognitive capacity.
How to have capacity formally assessed?
Whilst Courts accept evidence from solicitors of their observations, as well as that of family and friends, solicitors have no medical training and may not have the necessary expertise to assess cognitive capacity.
Courts also regularly accept evidence from treating general practitioners. However, whilst most GPs are able to comment broadly on general functional capacity, they may not be qualified to accurately assess the extent of any cognitive impairment and the nature and extent of any residual cognitive capacity to the degree required by the differing legal tests of capacity. As an example, most GPs are not qualified to assess the specific extent of loss of functional cognitive capacity through dementia and whether or not a patient retains the cognitive capacity relevant to amount to testamentary capacity. Nor are GPs, as a rule, familiar with the concepts set out above or of the need to establish the facts relevant to the precise question in issue.
This is not to denigrate GPs, but merely to point out that the formal assessment of cognitive capacity is a specialist field of expertise, which specifically falls within the training, education and experience of clinical psychologists or neuropsychologist specialising in the assessment of cognitive function. They are trained to identify and distinguish between lost and residual cognitive capacity and to assess specific task oriented functional capacity.
This applies whether the patient has, by way of example, an acquired brain injury, early onset dementia, age related aphasia or loss of effective cognitive capacity through non-organic psychological conditions such as PTDS. This highly detailed assessment may be needed to determine whether a client with dementia and some loss of capacity still has the relevant capacity required to appoint an enduring power of attorney or execute a will.
It is not sufficient for the psychologists or neuropsychologists to merely understand subtle variations in cognitive capacity. They must also understand the legal concepts set out above so they can work with the solicitor to ensure that the correct legal tests are applied. Such psychologists are few and far between.
What is involved?
The nature and extent of the required assessment will depend on the client’s condition and the specific capacity question in issue.
As capacity is specific to a particular situation or set of circumstances general tests of cognitive capacity alone do not usually provide sufficient discrimination to enable determination of legal capacity / incapacity except in the most extreme of cases.
Structured question sets administered by a psychologist familiar with the particular legal tests of capacity involved will serve much more effectively to determine legal capacity.
In cases where there is less concern, or the concern is “defensive”, it may be possible for an experienced clinical psychologist who is familiar with the implications of the legal tests to assess capacity through a simple review of the clinical records and perhaps a discussion with a GP for background, followed by a structured Skype interview directed to the specific issues and questions.
In more complex cases with clear existing cognitive impairment, or where substantial financial sums are involved or a challenge is clearly anticipated to a Trust or other disposition, an in-person assessment with formal clinical or neuropsychological testing and scoring may be appropriate. Such testing, per se, does not suffice to prove legal capacity but may be a useful tool to assist the expert.
In cases where there is a real concern about the transience of capacity it may be necessary to have the assessment undertaken on a number of occasions, and for the instructions to be provided or the document executed literally during the assessment in which both the solicitor and the clinical psychologist participate.
The record of the opinion should be provided in a report in admissible form citing the Code of Conduct and it may be appropriate for the interview to be recorded so the Court can (if required) later observe the process for itself to be satisfied of the client’s competence at the relevant time.
While there is a cost involved in obtaining such assessments, if there is any question of competence or clear risk of a later challenge to competence, a contemporaneous assessment of cognitive capacity by a qualified clinical psychologist is comparatively cheap insurance for both the client and their solicitor: it can be usefully thought of as “insurance against possible specious claims”.
Ex Post Facto Assessments of Capacity
Where capacity is challenged after the fact it is still possible for an expert clinical psychologist to provide an opinion on the relevant capacity questions. While they are at a disadvantage compared to situations where they have carried out the assessment contemporaneously, the expertise and issues are the same.
Expert Experts - Clinical Psychologists
Expert Experts represents a number of clinical psychologists with specific expertise in this field, including the Author and the Professorial supervisor of a Doctoral Thesis on expert opinion issues and psycho-legal protocols for assessing cognitive capacity to execute wills and to appoint an enduring attorney.
[i] Gibbons v Wright (1954) 91 CLR 423 at 437–8 per Dixon CJ, Kitto and Taylor JJ; See also: Guthrie v Spence  NSWCA 369 per Campbell JA at 174
[ii] D’Apice v Gutkovich – Estate of Abraham (No 2)  NSWSC 1333
[iii] In the Estate of Park; Park v Park  P 89
[iv] See eg Hill v Van Erp (1997) 188 CLR 159;
[v] See “client capacity guidelines: civil and family law matters”, Law Society of NSW Website.
[vi] Ibid “client Capacity: Common indicators of conditions that impair capacity.”
[vii] Legal Services Commission v. Ford 2008 LPT 12. Unsatisfactory professional conduct. Solicitor ought to have been aware of cognitive impairment. http://archive.sclqld.org.au/qjudgment/2008/LPT08-012.pdf