Law Commission of Ontario’s Proposed Changes to Capacity Assessments

July 2, 2014 Hull & Hull LLP Capacity, Elder Law, Guardianship, Power of Attorney 0 Comments

Ian Hull recently blogged about the Law Commission of Ontario’s discussion paper on Ontario’s legislation that governs legal capacity, decision-making and guardianship.

As Ian Hull noted, the 320 page paper proposes several reforms.  One of the proposals I found more interesting was the proposal to change the standards and tests for capacity in Ontario law.  We have previously blogged about capacity, here, here, and here.

The paper lists five key elements of Ontario’s current approach to legal capacity

  1. Legislative presumption of capacity: the burden of proof rests on the party asserting incapacity, and the standard of proof is a balance of probabilities.
  2. Functional basis for assessment of capacity: when assessing capacity, assessors look at the specific functional requirements of the particular decision, instead of looking at an individual’s abilities in the abstract.
  3. Domain or decision-specific capacity: the assessment of capacity is specific to the particular decision.  An individual may be capable of making some decisions and not others.
  4. The “understand and appreciate” test: the individual must have the ability to process information and the ability to reason.  They do not necessarily need to actually understand and appreciate the information.  This distinction is intended to protect, as an illustration, patients who, for example, do not understand the information because the physician’s explanation was poor, or “being better able to understand if under less sedation.”
  5. Time limited determination of capacity: capacity can vary over time.  Accordingly, assessments of capacity should be limited to the period during which “no significant change in capacity is likely to occur.”

In practice, the paper argues, courts have difficulty distinguishing the ability to understand from actually understanding and appreciating the information in question.  When an individual’s capacity is assessed, the assessor often, in practice, assesses actual understanding as opposed to an ability to understand.

A loss of capacity can trigger the operation of a power of attorney or the appointment of a guardian.  Both these processes can incur significant legal costs.  Where the loss of capacity is temporary, however, it “may be relatively difficult to ensure that substitute decision-making structures are in place only where they are truly necessary.”

The paper poses the following question:

Are there specific ways in which the current ‘understand and appreciate’ test for legal capacity should be clarified in order to improve its application? Or are there other means through which further guidance on its proper application could be provided?  Are there specific ways in which the legislative test should be amended so that it better reflects the social and contextual aspects of legal capacity?

One possible remedy is to further clarify the statutory language to offer additional guidance to capacity assessors.  In the UK, for example, the Mental Capacity Act specifies individuals are not capable to make a decision if they cannot “understand the information relevant to the decision,” “retain that information” or “use or weigh that information as part of the process of making the decision.”  While this language clarifies the assessor’s task, it comes at the expense of flexibility.

A remedy to address the problem of fluctuating levels of capacity could be to require periodic reassessments.  Section 20.1 of the Substitutes Decisions Act, 1992 for example, already requires statutory guardians of property to assist a legally incapable person to have a re-assessment, provided that it is requested by the incapable person.  This could easily be changed to require mandatory re-assessments.  The problem with this approach is that for persons whose capacity is unlikely to change, it simply introduces further cost and complexity to an already complex and expensive process.

Thank you for reading,

Suzana Popovic-Montag

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