On 27 April 2016, Mr Greenhouse was appointed as Deputy in respect of the property and affairs of P. On 3 August 2020, the Court of Protection accepted the application from the Deputy to retire from the Deputyship and a new Deputy was appointed in his place.
The former Deputy submitted a bill of costs to the new Deputy for £9,038.94 in respect of his outstanding costs. The new Deputy requested court assessment as the level incurred was above the fixed costs sum allowed. Thereafter, the Senior Courts Costs Office undertook an assessment and issued a provisional costs certificate in the sum of £7,597.96. The former Deputy sought these costs, and the new Deputy accepted the same, but noted that P had limited financial resources at present to settle the costs immediately. They explained that actions were being taken to obtain authority to enter into loan agreements on P’s behalf.
The former Deputy proceeded to pay himself the amount of the assessed costs and accepted bill. This payment was taken from P’s account which was still held in the Deputy’s name, and to which he still held a cheque book for. The former Deputy stated that he had contacted the bank manager before taking the payment, who confirmed there was £9,000 in the account. He also explained that he had calculated that this level of funds would be sufficient, after taking his costs, to cover three months of P’s normal expenditure from the account, and that in addition, there was a further £9,200 cash held in an account with the Court Funds Office.
The new Deputy advised that the former Deputy had caused P’s account to become overdrawn by taking the payment. The evidence presented by the new Deputy showed that overdraft charges, totalling less than £25, had been incurred on this account between May and July 2021.
The former Deputy explained to the SRA that he had understood that he was entitled to take funds from what he believed was part of his client account once the bill had been assessed and accepted by the new Deputy.
The SRA accepted the former Deputy’s admission that, by taking payment of his costs from a client account when the money was not held expressly to pay his costs, the client had not agreed to the payment and the SRA had not authorised it, that he breached Rule 5.1 of the SRA Account Rules.
The former Deputy, a Solicitor and Director, agreed to the below outcome following the investigation into his conduct by the Solicitors Regulation Authority (SRA):
- he would be rebuked;
- to the publication of the agreement; and
- he would pay the costs of the investigation of £300.
In conclusion, Deputies should take care and must not take payment of their costs from a client account when the money is not held expressly to pay their costs, and the client had not agreed to the payment and the SRA had not authorised it, as this amounts to a breach of Rule 5.1 of the SRA Account Rules and can result in subsequent investigation and sanctions from the SRA. Deputies must ensure that meeting their legal fees does not incur any further expense on behalf of P. If in doubt, authority should be expressly sought.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at firstname.lastname@example.org.