MPs consider Guardianship Bill for missing borrowers

The CML says it welcomes the Bill’s purpose in seeking to create a new form of legal guardianship that would allow the close relatives of missing people to continue to administer their financial affairs in their best interests until they are found.

If the Bill becomes law, the Council says it is vital that the government provides a "quick, clear and reliable means" of verifying a guardian’s right to make decisions about a borrower’s property and financial matters.

It says this could be achieved by the office of the Public Guardian keeping a register of guardianship orders, similar to the register of Deputies appointed under the Mental Capacity Act 2005.

This would also give third parties the same protection under law as they have when dealing with agents generally, like, for example, those acting as a power of attorney.

The CML says lenders would also like to be confident that their own liability is limited if they are required to administer a mortgage on the instructions of a guardian. Clause 15 of the draft Bill indemnifies those who deal with a guardian in good faith because they – or the guardian – are genuinely unaware that a guardianship order is now no longer valid.

An order could also set out whether an appointed guardian has all – or only some – of the missing person’s rights and powers relating to property or financial affairs.

The CML concluded: "Overall, the legislation, if enacted, would provide a welcome, practical way forward for lenders who want to help people who go missing and their families. The measures in the Bill provide re-assurance for all concerned, as they seek to manage financial affairs appropriately in what can be difficult circumstances."