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Can Deputies claim for tax work within the Bill of Costs?

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Can Deputies claim for tax work within the Bill of Costs?

During the Deputyship period, the Deputy may need to enlist the help of a tax advisor to assess P’s taxable income and to determine whether it is necessary to prepare a tax return for the tax year in question.

Bill of Costs. This time is often recovered at Grade C hourly rates and is not considered to merit a Grade B or A fee earner. The hourly rate of the tax advisor would need to be reflected in your client care letter. Some of this work may be considered Grade D in nature

When the tax work is carried out externally and the Deputy receives an invoice for the work carried out, this can be settled directly from P’s estate.

If it is necessary for the Deputy to prepare a tax return for P and they do not want the time assessed for it, they are able to claim fixed costs for this work. These fixed fees are outlined in Practice Direction 19B of the Court of Protection Rules (2017). If the tax return is completed in house efficiently, it may be more appropriate to take fixed costs for the task, which is better for cash flow.

  • For the preparation of a basic HMRC income tax return, the fixed cost available is ‘an amount not exceeding £250.00 (plus VAT).’
  • For the preparation of a complex HMRC tax return, the fixed cost available is ‘an amount not exceeding £600.00 (plus VAT).’ A complex tax return may arise where P has multiple investment portfolios or more than one rental property for example.

Overall, the Deputy is able to claim tax work done internally within the Bill of Costs, or depending on the level of time incurred, it may be more cost effective to take the applicable fixed cost for the work. However, work done by an external provider should be settled directly from P’s estate following the receipt of the invoice.

If you would like any further information of this, then please contact Scott on 07769607134 or by email at scott.kemp@clarionsolicitors.com

The importance of being organised

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As you are all aware, organisation rules the world!

This is a very important point when you are preparing your files to send to your Costs Draftsman. An untidy or incomplete file can be a nightmare for both the Client and also the Costs Draftsman in terms of completing your Bill of Costs. The assessment process can be slow, but organisation and complete files can help to prevent unnecessary delays.

Your checklist

A simple checklist assists both you and the Costs Draftsman when sending your file for costing.

We require:

  • your file of papers;
  • your time ledger;
  • your Court Order and any other relevant Orders;
  • a letter of instruction;
  • details of disbursements; and
  • details of fee earners who have worked on the matter.

If information or files notes and correspondence are missing from the file, and cannot be deciphered from the ledger, the file cannot be completed without further assistance from the fee earner.

What should you provide?

Clarion’s Costs Team pride themselves on the turnaround time and the quality of the work produced.

To enable us to do the best possible job, we need as much information as possible from you to paint a picture of the case for the Senior Courts Costs Office. This requires a complete file of papers with evidence for all work done. If we have all information and papers from you, we are able to prepare the bill of costs quicker for submission to the SCCO. It goes without saying that as Deputies, you are all extremely busy, but an extra ten minutes to ensure completeness of your file can save a lot of lost time and unbilled WIP.

It can also be a huge assistance to us if a brief synopsis of your case in your letter of instruction is provided. We will go through your file of papers page by page, but we will never know as much about your cases as you will. The Costs Draftsman can then use this as the basis for the narrative in your Bill of Costs. We will also have a better understanding of what sort of matter we are costing and the complexities throughout, which can be relayed throughout the Bill of Costs for the Costs Officer’s attention.

It is vital that travel disbursements and Counsel’s fees are included in the Bill of Costs. Counsel’s fees must be assessed, so ensure that you have an agreement in place with any Chambers about potential short fall fees from the outset.

Following the recent decision in PLK & Ors, it is essential that your charges do not breach the Indemnity Principle. If there are any retainer letters or fee agreements for your case, we need to know about them. The increased hourly rates can only be applied if your authority allows you to claim them. It’s vital that you are within your OPG105 estimate too, to prevent being penalised on assessment.

How we can help

Clarion Costs Team is on hand to guide you through the billing process and if you are unsure of anything, please contact us via telephone or email, and we will do our best to assist you.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at COPCosts@clarionsolicitors.com.

Does the Mental Health Act need to be reformed?

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The Department of Health and Social Care has launched a consultation and White Paper on plans to reform the Mental Health Act. 

This follows a report released in 2018 that outlines that the Mental Health Act does not always work in the best interests of patients, their families and their carers.

The report sets out various recommendations to amend the Act so it does work in the best interests of individuals, in both practice and in law.

The Department of Health and Social Care is proposing a wide range of changes to rebalance the Mental Health Act, to put “patients at the centre of decisions about their own care and ensure everyone is treated equally.” 

The proposed amendments are based on the following principles:

  • choice and autonomy – ensuring service users’ views and choices are respected
  • least restriction – ensuring the Mental Health Act’s powers are used in the least restrictive way
  • therapeutic benefit – ensuring patients are supported to get better, so they can be discharged from the MHA
  • the person as an individual – ensuring patients are viewed and treated as individuals

The closing date for responses is 21st April 2021. The White Paper and consultation documents are at the website below.

https://www.gov.uk/government/consultations/reforming-the-mental-health-act

If you would like any further information of this, then please contact Scott on 0113 288 5688 or by email at scott.kemp@clarionsolicitors.com

Is it possible to claim payments at Grade C?

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In the case of Kirby & Others (2013) it was decided that arranging payments should be reduced and limited to 3 minutes at a Grade D rate. This is because the SCCO see that making payments is routine and traditionally, no higher rate or time would be allowed.

Clarion have recently received a Bill of Costs back from the SCCO where the Cost Officer has allowed making a payment at 6 minutes at Grade C. This is something that we have not seen or heard anything about prior to this Bill.

In this matter the Cost Officer has allowed 6 minutes at Grade C stating ‘Payment of invoices is 3 minutes @ Grade D. If completed or high value, 6 @ C can be given.’  The ‘high value’ is discretionary as to the Costs Officer’s views and no further guidance was given about this decision.

We suggest that Deputyship teams should delegate payments to Grade D fee earners wherever possible, but bear this decision in mind if a high value transaction is required. It might be reasonable for a Grade C fee earner to make high value payments and the SCCO may allow this time at 6 minutes.

Scott Kemp is an Apprentice Paralegal in the Costs Litigation and Funding team at Clarion Solicitors.

You can contact him on 0113 288 5688 or scott.kemp@clarionsolicitors.com

A Complete Chronological guide to budgeting case law

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There are many case authorities in relation to budgeting since the process was implemented, it is hard to keep track of them all. Here is a complete list of cases.

 

2014

Appeals

Havenga -v- Gateshead NHS Foundation Trust [2014] EWHC B25(QB)

General guidance

A & B (Court of Protection: Delay & Costs) [2014] EWCOP 8)

Hegglin -v- Persons Unknown & Google Inc [2014] EWHC 3793 (QB)

Thomas Pink Ltd -v-Victoria’s Secret UK Limited [2014]

Yeo-v-Times Newspapers Ltd  [2014] EWHC 2853 (QB)

 

2015

General guidance

BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

(GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Stocker -v- Stocker [2015] EWHC 1634 (QB))

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB))

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

Judicial guidance cases

GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB)

Late filing of a budget

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Overspending on the budget

CIP Properties (AIPT) Limited -v- Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC)

Excelerate Technology Ltd -v- Cumberbatch [2015] EWHC B1 Mercantile)

Parish -v- The Danwood Group Ltd [2015] EWHC 940(QB)

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Proportionality in budgeting

(BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

 

2016

General guidance

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Campbell -v- Campbell [2016] EWHC 2237 (Ch)

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

Signia Wealth Limited -v- Marlborough Trust Company Limited [2016] EWHC 2141 (Ch) –

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Late filing of a budget

Jamadar -v- Bradford Teaching Hospitals NHS Trust [2016] EWCA Civ 1001

Murray -v-BAE Systems PLC (Liverpool County Court, 1st April 2016)

Outcome of budgets and costs of assessment

Sony Communications International AB -v- SSH Communications Security Corporation [2016] EWHC 2985 (Pat)

Proportionality in budgeting

(Considers Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Revising the budget

Warner -v- The Pennine Acute Hospital NHS Trust (Manchester County Court 23rd September 2016)

The budgeting procedure

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

 

2017

Departing from the budget on detailed assessment

RNB v London Borough of Newham [2017] EWHC B15 (Costs)

General guidance

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017]  EWCA Civ 792

MacInnes -v- Gross [2017] EWHC 127 (QB)

Napp Pharmaceutical Holdings Ltd v Dr Reddy’s Laboratories (UK) Ltd & Ors [2017] EWHC 1433 (Pat)

Judicial Guidance cases

Findcharm Ltd -v- Churchill Group Ltd [2017] EWHC 1109 (TCC)

Woodburn v Thomas (Costs budgeting) [2017] EWHC B16 (Costs)

Late filing of a budget

Asghar -v- Bhatti [ 2017] EWHC 1702 (QB)

Mott & Anor v Long & Anor [2017] EWHC 2130 (TCC)

Outcome of budgets and costs of assessment

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017] EWCA Civ 792)

Merrix -v- Heart of England NHS Foundation Trust [2017] EWHC 346 (QB)

Part 36 in budgeting

Car Giant Limited -v- the Mayor and Burgesses of the London Borough of Hammersmith [2017] EWHC 197 (TCC)

Proportionality in budgeting

Rezek-Clarke -v- Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5 (Costs)

Revising the budget

Asghar -v- Bhatti [2017] EWHC 1702 (QB)

Sharp v Blank & Ors [2017] EWHC 3390 (Ch)

Sir Cliff Richard OBE -v- The BBC & Chief Constable of South Yorkshire Police [2017] EWHC 1666

 

2018

Departing from the budget on detailed assessment

Jallow v Ministry of Defence [2018] EWHC B7 (Costs)

Nash v Ministry of Defence [2018] EWHC B4 (Costs)

General guidance

Yirenki v Ministry of Defence, [2018] 5 Costs LR 1177

 

 

Yirenki v Ministry of Defence [2018] 11 WLUK 53 – Are hourly rates a good reason to depart from the budget?

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When budgeting cases, the Civil Procedures Rules (CPR) under Practice Direction (PD) 3E para.7.3 provides that, when the Court is approving figures, the approval should “only relate to the total figures for budgeted costs of each phase”.

In this claim, upon costs management, the Judge approved both a number of hours for each phase, as well as individual disbursements in the budget. This approach is clearly contrary to the CPR. Parties often reserve the position in relation to their incurred costs, and the hourly rates on the incurred costs, to be dealt with at detailed assessment. Interestingly, Master Davison reserved the issue of the hourly rates for the future costs to also be dealt with at detailed assessment.

Reduction to the hourly rates

Now, we know from the case of Jallow v Ministry of Defence [2018] EWHC B7 (Costs) that, where there has been a reduction to the hourly rates for the incurred work, this is not a good reason to depart from the budgeted costs. Master Davison clearly differs in his opinion, given that he has reserved the position of the hourly rates specifically for the estimated costs.

This decision has since been appealed and has, not surprisingly, been allowed. It was said by Mr Justice Jacobs QC that the approach of Master Davison was contrary to the CPR. Relying on rule CPR 3.15(2)(b) specifically, he provided that the correct approach is clearly that the approved figure is meant to be a final figure, rather than a provisional one which the other side could later attempt to reduce.

Mr Justice Jacobs QC advised that the cost budgeting process is not meant to be a detailed assessment in advance and that the job of the Court is to approve a proportionate figure which can be relied on. The principle of reserving the position as to the hourly rates of the budgeted figures weakens the reliance that can be placed on the budget itself, supporting the case of Jallow v Ministry of Defence  [2018] EWHC B7 (Costs), in that hourly rates are not a good reason to depart from the budgeted figures.

 

UPDATES – What is a good reason to depart from a budget??

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Since Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792 and the ruling that a budget will only be departed from (up or down) if there is good reason to do so, there has existed the issue of what a good reason to depart from a budget upon detailed assessment is. Case law provides authority for what does and does not amount to a good reason, and there has now been time to reflect on this.

The matter of what constitutes a good reason is still subject to much questioning and debate, as there is no distinct definition of what amounts to ‘a good reason’.

The case of RNB v London Borough of Newham [2017] EWHC B15 (Costs), which followed that of Harrison and Deputy Master Campbell, decided that departing from the hourly rates was a good reason to depart from the budget. However, this decision faced criticism, in that the Judges’ role in the budgeting process is to set a total for each phase in the budget and is not to approve or fix the hourly rates.

Therefore, for all intents and purposes, it is irrelevant what the hourly rate is for those budgeted costs, at the time that the budget is set. A Judge may look at it like this: whether a party spends 15 hours at £200.00 per hour, or 20 hours at £150.00, for a total phase of £3,000.00 – the figure is still the same. The total phase is just that: a total amount which the Court believes is appropriate for the work required.

The issue of hourly rates – and a good reason to depart from a budget – was revisited in Bains v Royal Wolverhampton NHS Trust. This decision went against RNB, as it ruled that to reduce the hourly rates in line with reductions made to those of the incurred costs would be to second guess what the Judge was thinking at the point of costs management.

Nash v Ministry of Defence [2018] EWHC B4 (Costs), a high court decision following the decision of Bains, ruled that, if the change in hourly rate for incurred costs was a good reason to depart from the budgeted figures, it would bring about a case of double jeopardy. Thus, the only way to combat this, would be to undertake an assessment of the incurred costs at the costs case management hearing.

Jallow v Ministry of Defence [2018] EWHC B7 (Costs) highlighted matters that do not amount to a good reason to depart from the budget, and how the costs management order (CMO) can impact the detailed assessment. Master Rowley commented that the two factors brought in front of him, namely the settlement figure in comparison to the pleaded value, and the reduction in the hourly rates, do not amount to good reasons for departing from the budget.

The Master concluded that a reduction to rates for incurred costs do not amount to a good reason to depart. To amount to a good reason, something specific is needed to have happened. The change in the hourly rates did not amount to something specific and had it done so, it would have set a precedent for parties to argue good reason every time rates have been reduced, as it is in many cases.

A more recent decision of an appeal case, Barts Health NHS Trust v Salmon (unreported) (2019)delves further into the matter of good reason and provides authority on departing down from the budget where the phase has not yet been completed. HHJ Dight concluded that, where the phase has not been completed, and the receiving party has claimed less than the total figure for that phase, then this amounts to a good reason to depart from the budgeted figure, in order that the indemnity principle not be breached. Interestingly, HHJ Dight then went on to say that once good reason has been established, then the paying party need not put forward any further good reason when additionally challenging the level of the total figure claimed and attempting to reduce the phase.

This raises some significant questions about the importance of the assumptions of the budget, following approval of the figures at the costs case management conference. The only page required for filing is the front page of the approved budget. However, should it now be required to submit updated assumptions, to reflect what the figures are based on, should any part argue a good reason to depart in relation to whether a phase has been completed. I suspect, as further good reasons become apparent, the use of the assumptions to show what the phase total was based on will become a much more widely used tool, in proving good reasons to depart, where assumptions widely differ from the actual outcome, and could come to benefit both receiving and paying parties, For example, where there has been more work assumed than has actually been undertaken, regardless of a party is claiming the total of the phase, or where the total of the phase is much lower than budgeted, regardless of whether the number of witnesses was much lower than the number anticipated.

There remains uncertainty as to what does amount to a good reason. With some guidance, I suspect there will be many more cases to come; however, will reluctance be shown by Judges to make those decisions given the gravity of those rulings?