In Aotearoa New Zealand, the terms ‘capacity’ and ‘competence’ are often used interchangeably. However, in a clinical context, ‘competence’ usually refers to the process of decision-making, while ‘capacity’ is the legal term.
In Aotearoa New Zealand law, the issue of capacity is relevant in many circumstances, particularly when it comes to making legal decisions, entering into contracts, and managing personal affairs. Key contexts in which capacity is critically assessed includes:
Testamentary Capacity: When a person creates a will, they must have the capacity to understand the nature of making a will, the extent of their assets, and the implications of the provisions they are making. If there are doubts about a person's capacity at the time of making the will, it may be challenged in court.
Example: An elderly individual with dementia may lack the capacity to make a valid will if they cannot understand the implications of their decisions.
Capacity to Appoint an Attorney: To create an Enduring Power of Attorney, a person must have the mental capacity to understand what an EPA entails and the implications of granting decision-making powers to another individual.
Example: A person with significant cognitive impairments may be deemed unable to appoint an attorney if they do not fully comprehend the authority they are granting.
Capacity to Enter Contracts: Individuals must have the legal capacity to enter into contracts. If a person lacks capacity (due to age, mental health issues, or other factors), the contract may be deemed void or voidable.
Example: A minor (under 18 years) typically lacks the capacity to enter into binding contracts, except for essential goods and services.
Capacity to Consent to Treatment: Patients must have the capacity to understand the nature of medical treatments, the associated risks, and the consequences of consenting to or refusing treatment. If a patient is deemed unable to make these decisions, a legally authorised representative may need to make decisions on their behalf.
Example: An individual with severe mental illness may not be able to provide informed consent for a medical procedure if they cannot understand the implications.
Capacity to Participate in Legal Proceedings: Individuals involved in legal proceedings must have the capacity to understand the proceedings, instructions given to their legal counsel, and the implications of their decisions. If a party is found to lack capacity, a guardian or representative may be appointed to act on their behalf.
Example: A person with a serious cognitive impairment may require a representative to participate in a court case.
Capacity to Act as a Trustee: Individuals must possess the capacity to act as trustees, which includes understanding their duties and responsibilities regarding the management of trust assets. If a trustee is found to lack capacity, they may need to be replaced.
Capacity to Manage Finances: Individuals must have the capacity to manage their financial affairs. If a person is unable to understand their financial situation or the consequences of their financial decisions, they may require assistance or a trustee to manage their finances.
In summary, the issue of capacity is relevant in various legal contexts in Aotearoa New Zealand, including creating a will, appointing an enduring power of attorney, entering contracts, making medical decisions, participating in legal proceedings, acting as a trustee, and managing finances. Assessing capacity is essential to ensure that individuals can make informed decisions and that their rights are protected. If there are concerns about a person's capacity in any of these areas, it is advisable to seek legal or professional guidance to navigate the complexities involved.
