A report by Dunedin barrister Alison Douglass concludes that an urgent review is needed of New Zealand's law protecting the rights of people with impaired ability to make their own life decisions.

The report, Mental Capacity - Updating New Zealand's Law and Practice, has been completed after Ms Douglass was awarded the 2014 New Zealand Law Foundation International Research Fellowship.

Her research involved comparative analysis of the English Mental Capacity Act 2005 and its Code of Practice, and interviewing key people involved in mental capacity law in the United Kingdom, including the judiciary in the specialist Court of Protection.

Ms Douglass says a comprehensive update of the Protection of Personal and Property Rights Act 1988 is needed to bring it into line with the UN Convention on the Rights of Persons with Disabilities.

"The range of people to whom the legislation applies and the social environment in which it operates are now very different from when it was passed at the peak of the era of deinstitutionalisation of large psychiatric facilities," she says.

"The legislation's weakness lies in its unnecessary complexity and lack of clarity about two essential concepts. These are capacity (or incapacity) - the legal 'bright line' determining whether intervention is permitted in people's lives; and best interests - the standard upon which others should make decisions for people with impaired capacity, taking into account their will and preferences."

The report has been released with a practical clinical and legal "toolkit" for health practitioners on assessing capacity. This has been co-authored by consulting psychiatrist Greg Young and Otago University bioethicist John McMillan.