What are classed as ‘assets’ in COP cases?

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.

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