KKL Executor & Trustee Company Ltd v Harrison (2020) – Is it cynical for a professional Deputy to expect to be paid?

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The short answer is no. The above case concerned an elderly woman (OT, the Protected Party) in Leeds who lacks capacity to deal with her property and financial affairs. KKL is a trust corporation working closely with (both in terms of being the subsidiary of and working from the same office with) a charity called JNF Charitable Trust (“JNF UK”). Ms Harrison made an application to be appointed as property and affairs Deputy for the Protected Party and KKL lodged a competing application, on the basis that they were well known to the Protected Party and they felt that they were best placed to act as Deputy.

For the purposes of the proceedings, Ms Harrison acted as Respondent to KKL’s application to be appointed as Deputy. Ms Harrison’s objection to KKL’s application was based on three key issues. The first was KKL’s lack of independence from JNF UK and the potential for a conflict of interest to arise between the Protected Party’s interests and the interests of JNF UK as the main and residuary beneficiary of the Protected Party’s latest will.  The second was KKL’s lack of experience as a property and affairs Deputy and the third was KKL’s geographical distance from the Protected Party, and their apparent conflict with others with whom the Deputy would need to work in the Protected Party’s best interests pursuant to section 4(7) of the Mental Capacity Act 2005.

Within KKL’s arguments against Ms Harrison being appointed as Deputy, they raised the issue of costs. They said that the standard wording within the application for costs to be assessed on the standard basis was “a cosy arrangement regarding costs that is buried in the small print of her application”.  Judge Geddes responded to say that this was “(literally) factually wrong” and that the application “reflects standard wording within the templates produced by the Court of Protection”.

KKL also raised questions as to the fact that social services consulted a lawyer from the Lawdesk Panel of Private Client Lawyers about their concerns over the Protected Party’s mental capacity and her ability to manage her own finances. Judge Geddes responded to say the there is a risk to Clarion Solicitors of acting in such cases in that “if their application were rejected they might be left to bear their own costs of bringing the application which they do so purportedly in the Protected Party’s interests.” Judge Geddes quashed any notion that is was inappropriate and continued to say, “Of course, in this limited sense they have an interest in either the success of the application or at least in not being criticised for bringing the application to the point of disapplication of the general rule about costs contained in rule 19.2 of the Court of Protection Rules 2017 namely that “Where the proceedings concern P’s property and affairs the general rule is that the costs of the proceedings… shall be paid by P or charged to P’s estate”.

Further in respect of costs, Judge Geddes responded to KKL’s arguments, stating “It will be a matter for submissions on costs whether or not the conduct of either party has been unreasonable or should be marked with the court’s disapproval by disapplying the usual rule.  So long as the proposed deputy is acting in good faith, however, I would not consider their expectation of having their costs paid in accordance with the usual rule out of P’s estate could be considered “cynical”. It remains that the starting point for professionals is to expect to have their costs assessed and paid from the estate.”

Judge Geddes acknowledged that it would be cheaper to appoint KKL rather than Ms Harrison, but overall, found it to be in the Protected Party’s best interests for Lynsey Harrison to be appointed as Deputy. It was ordered that costs incurred by Clarion Solicitors could be assessed and paid from the estate.

It is clear from this case that professional Deputies are not expected to be limited to fixed costs and the starting point is that they should be paid, subject to detailed assessment, for their hard work in managing property and affairs.

If you have any questions, please contact Stephanie Kaye at Stephanie.kaye@clarionsolicitors.com or call 0113 3363402.

Lockdown Lowdown – Russell Caller

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This blog forms part of a series of weekly interviews with several professionals during lockdown. It aims to inform Deputies and their teams about how each organisation within the field of Court of Protection has adapted to Covid-19 and what they should be aware of. Our fourth participant for Lockdown Lowdown is Russell Caller who is a Director of the Professional Deputies Forum (the PDF), and a professional deputy himself at Gillhams Solicitors in London.

It’s been over a year now since the PDF’s formation. What has happened in that year for the PDF?

A lot! We launched last March (2019) in Leeds at the offices of Clarion and we are very grateful to Clarion for sponsoring that event which “got us off the ground”. In the last year, we have gained the ear of the Office of the Public Guardian, the Ministry of Justice, the Senior Courts Costs Office, the Official Solicitor and the Court of Protection. As we speak, we are about to go to court in the SCCO to hopefully achieve some sort of increase in rates, in addition to pushing a review of the Guidance Rates at the end of the year. We are also taking a leading role in the discussion on the recent decision of ACC & Others.

How many members does the PDF now have?

We currently represent over 5,300 solicitor professional deputy appointments. There are only 9000 in total, so the PDF represents the majority of such appointments.

What are the benefits of membership?

There are 6 key benefits:

  1. Representation for Deputies to give them a voice. That is our unique selling point, as this is the first time ever that Professional Deputies are represented.
  2. There are inequities in the COP system and there are some structural issues that need reviewing in the current regulatory scheme. In our view, not all the stakeholders are “singing off the same hymn sheet” and it is important that this is addressed. The stakeholders (OPG, SCCO, MOJ, etc.) have developed over time but there needs to be consistency between what each stakeholder is asking for from professional deputies, otherwise the system doesn’t work. We are trying to set up a meeting with all stakeholders to discuss the areas which need looking at, in the hope that we can address this collectively and have a more joined up approach.
  3. We are fighting for sustainability of the whole professional deputyship system. We are “tottering on the edge” as we cannot afford to pay paralegals their true value.  Some Law firms are saying it is uneconomic to have COP departments and that means a reduction in the service being offered. If the professional deputyship service is to continue in England and Wales, we need to tackle these fundamental issues and the PDF is pushing hard for that.
  4. We are putting the solicitor professional deputy at the heart of the discussion for the first time ever. We are in discussion with all the main stakeholders.
  5. We have a resource section on our website for all members.
  6. We listen to our members and act on their views!

How can the PDF help professional Deputies and why is it key to be involved?

It is essential to be involved for all the reasons set out in the answer to the previous question. We are and will be taken seriously by the COP stakeholders and that is precisely what is happening. The PDF is a catalyst for change. We are very focused – our message is very clear- we are here to represent and protect the Solicitor professional deputy. Firstly, we need to make the system sustainable. Simply put, the greater the membership of the PDF, the more the stakeholders engage with us- they have little option to but to engage and listen to us and respond appropriately.

Do you have any concerns for professional Deputies caused by COVID-19?

Very much so! Deputies cannot gain access to Care Homes to visit the vulnerable, they have difficulty in reaching social services, doctors and other professionals as easily and cannot get things done quickly enough! My other worry is that law firms have had to furlough members of staff too, so the number of support staff has been hit, who deputy teams rely heavily on.

What are the PDF’s objectives for 2020/21?

We have several objectives which tie nicely into the benefits of being a member (see above). We want to improve the relationship between the OPG and solicitor professional deputies and challenge some of the ills of the current regulatory scheme. For example, review the OPG professional standards and how these can be achieved by deputies, without being  financially penalised for meeting the criteria. We also want to open a dialogue with the COP to improve how it is run, including a dialogue with court staff and with the judges. Where appropriate, we want to challenge MOJ policy in the deputyship world to improve and provide clarity for all deputies in the system.

Following the case of ACC & Others earlier this year, we want to make further representation on behalf of deputies to address the many unintended consequences of this case. This includes engaging with other organisations within the COP world to discuss the correct approach to the court.

We also want to achieve a pay increase for solicitor professional deputies, which will provide financial sustainability and a clear career path for younger and junior professionals practicing in this area.

We are always looking for feedback from our members and others who work in the COP profession. We are a young organisation and we know that we will make mistakes, so if anyone has some good feedback on what we do well and what we don’t do so well, we would really like to hear that so we can continue to develop.

What do you think the future holds for professional Deputies?

It is very difficult to say. Unless and until being a solicitor professional deputy becomes financially sustainable, the future is not good. We need to tackle this head on, which is what we are doing at this very minute! As I mentioned previously, we have a case being heard in the SCCO  this coming week in respect of rates of pay for solicitor professional deputies, which we hope will provide some certainty in this area, then we can start to address the inequities in the system.

How has the PDF adapted to lockdown?

One of the benefits of the PDF is that we have just 4 directors and we have a small working group, so decisions can be made easily which allows us to be “fleet of foot”. We very quickly launched our very popular “Fireside Chats” on Zoom and all the major stakeholders have come to be interviewed, which has been great! The use of Zoom and Teams has been a real advantage for the PDF, so we’re not complaining- we are firing on all cylinders!

How have you personally been keeping busy in lockdown?

I am becoming an expert in managing meetings and presentations through Zoom and Teams. I am learning new skills every day. I am Chair of a Shepherds Bush Housing Group and I now lead board meetings of up to 20 people, which isn’t easy, but I love to try new things and so I am sort of enjoying myself! I miss the fun and banter of physically being in an office, but this period has given me a lot of time to think about life and what I want from it.

What are you most looking forward to after lockdown?

I have a passion for food! I love to eat out whenever I can and I think the best meal of the day is breakfast. Until the lockdown, the working group of the PDF used to meet in Central London at 8am for a breakfast meeting ( all paid for our of personal funds, I hasten to add!). It was great fun and I am really looking forward to getting back to those breakfast meetings! I have my first Grandchild due in September too, so I am especially looking forward to that.

Clarion would like to thank Russell for taking part in Lockdown Lowdown and would like to thank the PDF for their tireless efforts in trying to improve this area of practice. Coming up in the series, we will be hearing from Ria Baxendale from the OPG. If you would like to suggest another interviewee for Lockdown Lowdown, please contact Stephanie Kaye at stephanie.kaye@clarionsolicitors.com or call 0113 336 3402.

Open Meeting of the Civil Procedure Rules Committee – Costs Update

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The Civil Procedure Rules Committee held their annual open meeting on 15th May 2020. Given the present circumstances, the meeting was successfully held via Skype.

The previous two meetings covered several costs issues including the establishment of a sub-committee to make recommendations in respect of guideline hourly rates which have not been updated in the last 10 years. The committee is due to make recommendations by the end of this year with an update to the rates to take place thereafter.

The April minutes, which have just been released, confirm a that a sub-committee has also been established to consider costs rates other than guideline hourly rates.

The following costs matters were discussed at the open meeting in May, minutes of which will likely be published in June:

Vulnerable Parties – The sub-committee sought guidance on four points; an amendment to the over-riding objective to cover vulnerable parties, an accompanying PD, an addition to CPR44.3(5) regarding proportionality to specifically include vulnerable parties, and whether to approach the MOJ in respect of amending fixed, scale and capped costs for cases involving vulnerable parties. The committee broadly agreed with the proposals with some caution regarding the overriding objective.

CPR 45.18 – The committee agreed that the deletion of the upper limit of £25,000.00 from tables 6 and 6A would be recommended.

Qader v Esure– Issues had been raised following the amendments to CPR 45 Section IIIA concerning the effect on parties’ settlement tactics in matters likely to be  allocated to the multitrack due to the difference in the level of costs recoverable pre and post allocation. The committee discussed the matter and concluded that no action should be taken.    

QOCS  / Ho v Adelekun – The issue of off-setting Defendant’s costs against Claimant’s costs where damages are insufficient has been referred to the costs sub-committee. The committee will keep a watching brief on the appeal in Ho and consider revision to CPR 44.14 thereafter.

Part 36 acceptance in pre-action matters – Where a Part 36 offer is accepted pre-action there is no deemed costs order (CPR  44.9(2)).  The costs sub-committee will consider whether there is a need to amend CPR 46.14 regarding costs only proceedings to be explicit in respect of Part 36 acceptance on pre-action matters.

Helen Spalding is an Associate in the Costs and Litigation Funding Department at Clarion. You can contact her at helen.spalding@clarionsolicitors.com or on 0113 288 5639.

Filing a Costs Budget Late: High Court Decisions in 2020

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Back in January of this year Lionel Persey QC, sitting as a Deputy Judge of the High Court, took a fairly lenient approach towards the defaulting party in the case of Manchester Shipping Ltd v Balfour Shipping Limited & Anor [2020] EWHC 164 (Comm) when he granted relief from sanctions to Defendants who filed a costs budget 13 days late.

The Judge took the stance that “The breach, although serious in terms of lateness, did not prevent the litigation from being conducted efficiently or at proportionate cost. No inconvenience was caused to the court or to other court users”. This ruling seemed to mark a shift from the strict application of CPR 3.14 which provides that: unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.

More recently however, His Honour Judge Simon Barker QC in Heathfield International LLC v (1) Axiom Stone (London) Ltd & (2) Medecall Limited [2020] EWHC 1075 (Ch) determined that the defaulting party, in this case the second Defendant, was to be treated as having filed a budget comprising only the applicable court fees.

The surrounding circumstances were that the defaulting party failed to file a Budget 21 days before the originally listed CCMC. This first CCMC was vacated 4 days before it was due to take place as a result of the parties making applications in respect of security for costs. The second Defendant attempted to excuse the fact it had not filed a budget on the basis that the parties had agreed for the CCMC to be relisted. The timing of this agreement was ambiguous and could not be substantiated. The second Defendant then failed to file and serve its budget 21 days before the relisted CCMC and did so late by at least 5 days. Furthermore, they did not file and serve a Precedent R or engage in budget discussions. Relief from sanctions was subsequently applied for 2 days before the re-listed CCMC.

Counsel for the second Defendant attempted to use Manchester Shipping in support but it was found to be incomparable on the facts.

HHJ Barker QC commented on the fact that the first Defendant’s response to the Claimant’s claim had been the cause of the second Defendant on a secondary alternative basis “but that does not entitle D2 to take a more relaxed or casual approach to participation as a party in this litigation”.

The sums of money in issue, at approximately £260k plus £100k for interest and statutory penalty, and the type of litigation as a claim for unpaid invoices were also referred to in the context that “costs may easily become disproportionate” thus “costs control and costs budgeting are all the more important”.

Reference was also made to the court’s discretion under CPR 3.14 being “entirely open”.

A form of hybrid relief was contemplated but ultimately it was decided that the defaulting party should be treated as having filed a budget comprising of court fees only.

Anna Lockyer is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at anna.lockyer@clarionsolicitors.com and 0113 288 5619, or the Clarion Costs Team on 0113 246 0622

What are classed as ‘assets’ in COP cases?

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Practice Direction 19B stipulates that fixed costs must be used in the event the Protected Party (P) does not have over £16,000 of assets on the anniversary date. The pertinent issue faced by many Deputies is what is included in the classification of ‘assets’.

When considering whether the P’s matter is what is widely known as a ‘hardship case’, you must consider whether P initially has cash or other liquid assets which total £16,000. If not, does P own a property? If P owns a property in which he/she or a dependent resides, this will not be counted towards the total asset value for this purpose. However, if it is a vacant or rental property, the value of the property can be included in calculating the total assets.

In the event that there is ligation ongoing in which the liability has been admitted and the funds are anticipated, or there is an ongoing property sale, income or inheritance in which funds will be received from, these may be classed as pending assets and you may not be limited to the fixed cost. We recommend checking the particular scenario with the Office of the Public Guardian beforehand.

Section 9 states “where the net assets of P are below £16,000, the professional deputy for property and affairs may take an annual management fee not exceeding 4.5% of P’s net assets on the anniversary of the court order appointing the professional as deputy.” You are not entitled to take interim payments whereby the assets fall below £16,000.

You must charge in line with the client asset amount on the anniversary date of the court order. If the assets are above £16,000 on the anniversary date then the 4.5% rule does not apply.

If the assets are above £16,000, deputies should know that Section 6 of PD19B states that “where professional deputies elect for detailed assessment of annual management charges, they may take  payments on account for the first three quarters of the year, which are proportionate and reasonable taking into account the size of the estate and the functions they have performed. Interim quarterly bills must not exceed 25% of the estimated annual management charges – that is up to 75% for the whole year. Interim bills on account must not be submitted to the Senior Courts Costs Office. At the end of the annual management year, the deputy must submit their annual bill to the Senior Courts Costs Office for detailed assessment and adjust the final total due to reflect payments on account already received.”

To bring this into context for when your bill of costs is being prepared, the SCCO are interested in the value of the assets of the P to enable accurate consideration for the proportionality of the bill. If your client owns any properties, vehicles, rental properties or businesses providing an income then it is appropriate for this to be highlighted within the narrative of your bill of costs. In addition, the details of the net assets value including the value of any shares and general investments held should be provided. It has been evidenced in the assessed bills returned from the SCCO that this information assists in the Cost Officer providing a just and reasonable assessment.

If you are unsure of the position in relation to P’s net assets and what should or should not be included, we recommend contacting the OPG for guidance.

However, you should have any further queries, or simply wish to discuss any costs queries you may have, please don’t hesitate to contact bridie.sanderson@clarionsolicitors.com.

The Importance of Correct Certification of Court Documents

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In Gempride -v- Bambrah [2018] EWCA Civ 1367 the Court found that a solicitor had mis-certified a bill of costs. As a result of that finding, the firm was required to self-report to the SRA.

The SRA has now published its findings from that investigation. Here, Andrew McAulay looks at 5 Key Points for certification of a bill.

Andrew McAulay is a Costs Lawyer, a Partner at Clarion, and head of the Costs and Litigation Funding Department.

Lockdown Lowdown – Francesca Gardner

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This blog forms part of a series of weekly interviews with several professionals during lockdown. It aims to inform Deputies and their teams about how each organisation within the field of Court of Protection has adapted to Covid-19 and what they should be aware of. Our third participant for Lockdown Lowdown is Francesca Gardner from Kings Chambers, who has chosen a hectic time to return from maternity leave!

How has the Court of Protection adapted to lockdown?

The COP has adapted extremely well, and at speed to the pandemic. The Vice President has been instrumental in ensuring that the court continues to function. Hayden J has released a number of helpful guidance documents. The reality is that there will be some cases that will be delayed but there is a clear and concerted effort from the court’s to ensure that urgent cases are being properly determined. For example, within days of the lockdown measures being announced by the government, the COP heard a Serious Medical Treatment case (over a number of days) via Zoom.

I know of and am involved in many cases that are being and are scheduled to be heard over the coming weeks.

What impact do you think this will have on professional Deputies?

I am optimistic that there will not be a significant impact upon deputies, save for the challenges in maintaining contact with P and any delays that may be faced as regards court proceedings. HMCTS has issued its ‘family business priorities’ for April 2020 setting out what work must be done, what work will be done and what work HMCTS will do its best to do. Property and Affairs work falls under the work that court ‘will do it’s best to do’, whilst this may be frustrating to deputies I am aware of several P&A cases being heard both in the regions and in London so whilst there may be delays I would hope that deputies will still have proper access to the court’s should they need it on behalf of P.

Have you learnt anything so far from the pandemic?

The importance of slowing down, as lawyers we work at 100mph and I hope that lockdown has forced us to re-evaluate a little and find a better balance going forward. I am thinking ‘pigs might fly’ as I write this.

Have there been any reoccurring issues that Deputies should be aware of?

The main issue in my view and that, which I am aware of, is contact with P and ensuring that communication between P and the deputy continues. It is important that deputies think creatively during the pandemic to ensure that they (and others) can maintain contact with P. For example and where possible the purchase of an iPad or a request to the staff at the care home and/or support staff to support P to use Skype may be of real benefit. In BP v Surrey County Council 2020 EWCOP 17, the Vice President of the Court of Protection, Hayden J, reiterated the importance of P maintaining contact with others and how this should be approached based on the specific needs of the person. For example, telephone contact would not be appropriate where the person is deaf, but Skype maybe and they should be supported to use that facility.

Do you think there will be any reoccurring issues that Protected Party’s face as a result of this?

I would like to think not but I think delay will be inevitable in some cases, particularly cases that are none urgent in nature.

What do you think Deputies should be thinking about?

Whilst it may be a very difficult time, deputies must remember that their roles and responsibilities remain the same throughout the pandemic, that includes in circumstances where the deputy may be self-isolating in line with the government guidelines. The Office of Public Guardian has provided some guidance for deputies during the pandemic, within the guidance it states:  ‘If you are self- isolating or shielding, you must continue to make decisions for P. You cannot ask anyone else to make those decisions for you.’ However, attorneys and deputies can make a decision and ask someone else to carry it out. The guidance reminds deputies that they do not have to step down in their role simply because they are unable to visit the person.

How have you been keeping busy during lockdown?

My little boy keeps me very busy, but returning to work has also kept me busy. I try to exercise alone as regularly as I can. Running has always been my ‘go to’ for exercise and its great for clearing your head, particularly with all that is going on at the moment.

What are you most looking forward to after lockdown?

Spending time with family and my little boy, it has been hard that no one has been able to see him so I am very much looking forward to that!

Clarion would like to thank Francesca for taking part in Lockdown Lowdown and for her helpful insight. Coming up in the series, we will be hearing from Ria Baxendale from the OPG. If you would like to suggest another interviewee for Lockdown Lowdown, please contact Stephanie Kaye at stephanie.kaye@clarionsolicitors.com or call 0113 336 3402.