Should a Court of Protection Deputy seek court authorisation before litigation?

The recent judgment by Hilder HHJ has ruled in the three linked cases of ACC, JDJ and HPP (ACC & Ors (2020 EWCOP 9)). The judgment concerns three separate sets of proceedings where each Deputy is connected by the same firm of solicitors. For ACC and HPP that Deputy is Irwin Mitchell Trust Corporation Ltd; for JDJ, the Deputy is a partner of Irwin Mitchell LLP.

In each case, the Deputy had embarked on litigation on behalf of the Protected Party and had instructed a further department within Irwin Mitchell to conduct the litigation. The common issue in each matter is whether, and in what circumstances, the Deputy can recover from the Protected Party’s funds which have been or are likely to be incurred in legal proceedings. There was no specific provision in the orders appointing the Deputy that either did grant or exclude authority to instruct another Solicitor or conduct proceedings.

Furthermore, due to the conflict of interest, each Protected Party’s in this matter was represented by the Official Solicitor as Litigation Friend. The Public Guardian was also been joined as a party to the proceedings.

It was accepted by the Official Solicitor that obtaining legal advice and instructing the Deputy’s own firm can sometimes fall within the general authority of the Deputyship order, but the order does not give authority to litigate. They argued it was in the Protected Party’s best interests that any advice be authorised specifically by the court and any advice sought is to be tendered out to different firms.

The Deputies position was that a property and affairs standard authorisation should be understood as including legal costs in relation to contentious matters but ‘falling short of conduct of litigation’. They contended “one of the advantages” of appointing a solicitor or solicitor-owned trust corporation as Deputy is that it provides the Protected Party with “ready access” of expertise from a full-service legal firm. They further contended where circumstances demanded urgent action, a Deputy should be able to issue proceedings and seek interim relief without specific prior authorisation from the court and thereafter, to apply for authority.

Hilder HHJ explained that proceedings have arisen because the court had concerns about what the Applicants regard as a reasonable interpretation of ‘general authority’. She added that the Applicants, the Official Solicitor and the Public Guardian all sought guidance. Whilst the three cases demonstrate a clear need for further amplification of the court’s approach, she confirmed that approaching the task should be taken with caution. ‘General’ authority is not susceptible to exhaustive definition (49). She then presented a series of questions which can be found in the judgment. These are as follows:

  • What authorisation is required to conduct litigation on behalf of P? [51]
  • What about further proceedings in the Court of Protection? [52]
  • To what extent does ‘general authority’ encompass authority to take legal advice on behalf of P? [53]
  • Where is the line drawn between seeking advice and conducting litigation? [54]
  • What about urgent matters? [55]
  • How should conflicts of interest be addressed? [56]
  • What about cases where the deputy is not the instructing party? [57]
  • What about acting as litigation friend? [58]
  • What if P has capacity to give instructions for the work in question? [59]

A summary of conclusions to those questions are set out in the Appendix in the judgment, but the key observations below have caused a stir amongst professionals.

Specific authority is required to conduct litigation on behalf of the Protected Party [paragraph 51] except where the contemplated litigation is in the Court of Protection in respect of a property and affairs issue [52.4] or to seek directions in respect of a welfare issue [52.10].

Furthermore, where a Deputy has authority in respect property and affairs, such authority encompasses steps in contemplation of contentious litigation in the realm of that authority up to receiving the Letter of Response, but no further [54.4].

Hilder HHJ confirmed that ‘general authority’ of a property and affairs Deputyship order does not encompass seeking advice or other steps preliminary to litigation in respect of welfare issues; it does encompass making an application to the Court of Protection for further directions /specific authority in respect of welfare issues [54.6]. It also does not encompass steps in contemplation of an appeal against the decision of an Education, Health and Care Plan [54.8(b)].Professionals are concerned about delays at the court when obtaining this authority and the specific repercussions of this case concerning the recovery of legal costs. Hilder HHJ advised that, if circumstances arise where the protection of the Protected Party’s interests requires action to be taken so urgently that prior authority to litigate cannot reasonably be obtained, a Deputy proceeds at risk as to costs but may make a retrospective application for authority to recover costs from the Protected Party’s funds. There is no presumption that such application will be granted – each application will be considered on its merits [55].The concern of the potential conflict of interest when the Deputy instructs his own firm to carry out legal tasks is not a new issue, but one which has finally been clearly addressed in this judgment. Hilder HHJ confirmed that the Deputy must take ‘special measures’, including:

  1. the Deputy may seek prior authority [56.7(a) – (e)];
  2. the Deputy is required to seek – in a manner which is proportionate to the magnitude of the costs involved and the importance of the issue – three quotations from appropriate providers (including one from his own firm), and determine where to give instructions in the best interests of the Protected Party [paragraph 56.7(f)(i)];
  3. the Deputy must seek prior authority from the Court if the anticipated costs exceed £2 000 + VAT;
  4. the Deputy must clearly set out any legal fees incurred in the account to the Public Guardian and append the notes of the decision-making process to the return [56.7(f)(iv)].

Hilder HHJ further advised that specific authority is required to use the Protected Party’s funds to pay a third party’s legal costs, even if those costs relate to litigation for the benefit of the Protected Party [paragraph 57].Finally, if the Protected Party has capacity to give instructions for particular work, he will also have capacity to agree the costs of that work [59].

Hilder HHJ agreed that, in the three cases, the Deputies’ decisions to litigate were justified. Therefore, authority should be retrospectively granted to them. However, Deputies should not take this ruling to mean that authorisation will be granted after the event on other occasions. Judge Hilder stated that “appropriate authorisation should be secured in advance” due to the significant costs incurred in litigation (62.6). This judgment is significant in Court of Protection, providing clarity on litigation proceedings and referrals in house. It is a meaningful change for professional Deputies and we are yet to see the practical repercussions of the judgment. Where a Deputy is currently conducting litigation or will potentially be conducting litigation, we advise to apply to the Court to secure appropriate authorisation, as there is no guarantee that authorisation will be granted retrospectively. Whilst we have always recommended this, it is now essential that professionals obtain quotes from both internal and external practitioners when looking to obtain legal advice in another area of expertise, in order to justify the decision. This must be properly documented to avoid scrutiny in future. If Deputies do not adhere to the new processes in this case, there will be substantial costs repercussions.

Brian Ferry is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Brian.Ferry@clarionsolicitors.com and 07741 663809 or the Clarion Costs Team on 0113 246 0622.

OPG consultation on ‘Hardship’ Cases

In November 2019, Clarion hosted another Court of Protection Masterclass and the event was widely attended, including speakers from the Office of the Public Guardian (OPG), Slater Heelis Solicitors and Clarion. Ria Baxendale from the OPG revealed that there is currently a consultation underway to increase the percentage fixed fee allowed in Hardship Cases.  

Practice Direction 19B sets out what can be claimed by a Solicitor. Currently, 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. This has remained the same for a number of years and these cases have been widely referred to as ‘Hardship Cases’. 

The OPG and the Court recognise that it’s very difficult to manage a client’s need with such a small fixed fee available, particularly when cases of this nature can often be the most demanding. In order to ensure that professional deputies can continue to manage the property and affairs of vulnerable clients, the fees need to be sustainable, which is an ongoing concern of professionals.  

If there are any changes made to the Practice Direction, particularly the percentage fixed fee for cases of this nature, we will further notify our database.

Brian Ferry is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Brian.Ferry@clarionsolicitors.com and 07741 663809 or the Clarion Costs Team on 0113 246 0622.

Maximising Recovery: Payments and Dual Attendances

We continue to see assessments returned from the Court where payments have been reduced to 3 minutes at a Grade D hourly rate. Furthermore, we continuously see time claimed for attendances of two fee earners reduced to just one, as they see this as duplicative work. All of this has an impact on the recovery of your costs in Court of Protection cases.

The OPG Costs Guidance states, “three minutes will usually only be allowed in respect of paying bills by electronic transfer, cheque or enclosure letter” and “a three-minute unit is usually allowed for very short straightforward letters, emails or duplicative letters”. Where there are two fee earners, the OPG Costs Guidance states “The SCCO allows the cost of one fee earner to visit in all except the most exceptional cases.”

Background and Case Law

The matter of Leighanne Radcliffe, before Master O’Hare, dealt with arguments on routine payments. The Bill of Costs submitted was in relation to General Management costs for the period 14 August 2002 to 13 August 2003. The Provisional Assessment was not accepted and the matter proceeded to a formal Detailed Assessment. Thereafter, permission to Appeal was granted. 

The Appeal was heard before Master O’Hare and gave guidance on invoices and payments. He allowed 3 minutes per letter as reasonable, explaining that where there is a high volume of bill paying letters, it is not appropriate to allow 6 minute payments to each.

The letters were payments for utility bills and Master O’Hare further stated “in making that allowance I would disallow the extra time for generally “looking after the matter”.

This case also serves to reiterate the decision made by Master O’Hare in the Jamie Walker case in terms of 3-minute charges for routine cover letters. It is noted that time spent checking an invoice, arranging payment and preparing the cover letter/cheque is non-fee earner work and therefore a minimal 3 minutes is allowed for the whole process.

The case of Garylee Grimsley (1998) deals with the arguments of time claimed for two fee earners in attendances. Master O’Hare referred to R -v- Legal Aid Board Ex Parte Bruce (1991). He stated that:

“Solicitors are not to be expected to carry knowledge of all the law in their heads… if the problem is outside the scope of their experience they will wish to discuss it with others who are more qualified… But knowledge of the law, however acquired or recalled, is their stock in trade… In so far as expense is involved in adding to this stock in trade, it is an overhead expense and not something that can be charged to the client”

Recommendations

Always expect time claimed for payments to be reduced to 3 minutes at a Grade D rate. In order to maximise recovery, we advise to delegate this work to a lower grade fee earner and agree with your instructed Costs Draftsman to include 3 minute payments within the bill.

In respect of two fee earner attendances, only claim the highest fee earner at an attendance. If you feel there are exceptional circumstances, fully explain these in the attendance note in order for the Costs Draftsman to include this in the Bill of Costs. Again, referring to the OPG guidance the SCCO will only allow these in exceptional cases. However, there is no guidance on what is deemed as an exceptional case.

Brian Ferry is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Brian.Ferry@clarionsolicitors.com and 07741 663809 or the Clarion Costs Team on 0113 246 0622.