What is a Power of Attorney?
A Power of Attorney is the instrument by which an agent is appointed and given the authority to act on the principal’s behalf in specified circumstances.
A Power of Attorney may be given for example to the principal’s professional adviser in a transaction authorising him to sign documents on behalf of the principal. Authority is sometimes given to an attorney under a Power of Attorney to instruct a professional adviser generally in connection with the principal’s affairs. It is possible also for a Power of Attorney to be granted, appointing an attorney to act on behalf of the principal in all of his or her affairs either for a specified period or indefinitely (or until earlier termination by operation of law).
It is essential that professionals and other third parties relying on Powers of Attorney, especially those made in other jurisdictions, check the validity of the Power of Attorney under Jersey Law. If the requirements set out in the Power of Attorney (Jersey) Law 1995 (the "Law") are not met, the Power of Attorney is ineffective in Jersey and cannot be relied on.
What requirements are necessary for a Power of Attorney to be effective?
In order for a Power of Attorney, wherever it is made, to be enforceable in Jersey the following must be satisfied:
- The Power of Attorney must be signed by the principal in the presence of an independent witness.
- For a Power of Attorney executed outside Jersey the witness must hold one of the following offices: a judge, justice of the peace, magistrate, major, chief officer of any city or municipal corporation, a barrister, solicitor, lawyer qualified under the legal system of the place of execution, a person authorized to take oaths or affidavits or the equivalent thereof by the law of Jersey or the law of the place of execution, a British consular official or, if the principal is a member of the British armed forces, an officer of those forces authorised to take affidavits.
- The form of words used in the Power of Attorney is in the form specified at Schedule 2 of the Law or another form to the like effect.
- The Power of Attorney is not being used in the principal’s function as a trustee or personal representative.
- If a Power of Attorney is executed by a body corporate it must be done so in the manner permitted by its articles of association or other internal regulations and does not need further attestation.
- A valid copy of a Power of Attorney must:
- be a reproduction of the original made with a photographic or other facsimile reproduction device;
- contain a certificate at the end signed by the principal to the effect that the copy is a true and complete copy of the original; and
- if the original consists of 2 more pages, contain a certificate at the end of each page of the copy to the effect that it is a true and complete copy of the corresponding page of the original.
- If it is to be used in connection with a Jersey registerable real estate transaction, the Power of Attorney itself must be registered and there are additional execution requirements.
- The Power of Attorney has not been revoked.
Under the Law a Power of Attorney is automatically revoked upon written revocation of the power by the principal, the death of the principal or by the incapacity of the principal (e.g. if a principal develops senile dementia or another illness which causes them to be incapable of managing their own affairs). In such circumstances the Law requires that a Curator is appointed to manage the affairs of the principal.
If an attorney acts under a Power of Attorney which has been revoked, that attorney does not incur any liability, and the transaction remains valid if at the time the attorney did not know that the power had been revoked. However professionals with clients who are making or who have made a Power of Attorney in connection with engaging their services, as well as their designated attorneys, should be notified in writing of these automatic events of revocation (e.g. the incapacity of the principal) requiring that the professional adviser is notified immediately in the event of a revocation.
In view of potential problems with incorrectly drafted, executed or copied Powers of Attorney it may be appropriate, in some circumstances, for clients of professional advisers to be given a prescribed form of Power of Attorney with detailed instructions for execution and copying being supplied.
Capacity and Self-Determination Law
The Draft Capacity and Self-Determination (Jersey) Law 201- if passed would in due course introduce lasting powers of attorney, similar to the system in the UK, enabling a Power of Attorney to endure beyond the incapacity of the principal. In the meantime however professionals relying on Powers of Attorney need to be taking measures to check that the principals of Powers of Attorney on which they are relying continue to have capacity.