PLK & Ors – Further Guidance
Following on from the very welcomed case of PLK & Ors which concerned the hourly rates that can be claimed by Deputies, today further guidance has been released by Senior Costs Judge Gordon-Saker.
Please see attached the Practice Note confirming the guidance.
If you have any questions, please contact Laura.Gillin@clarionsolicitors.com
Part 36 – offer to pay by instalments
A party to proceedings (usually the defendant / paying party) may sometimes want to make an offer to pay the settlement sum by instalments. Whilst this is possible to do by Part 36, it does have an effect on the effect of the offer.
CPR 36.6(2) provides that a defendant’s Part 36 offer which offers to pay “all or part of the sum at a date later than 14 days following acceptance of the offer will not be treated as a Part 36 offer unless the offeree accepts”. The effect of this rule is that where a defendant makes an offer to pay by instalments:-
- If it is accepted then it will be treated in the usual way as a Part 36 offer. Therefore, Part 36.13 will apply (the defendant will pay the claimant’s costs up to acceptance, payment must be within 14 days etc);
- If it is not accepted and the defendant goes on to beat it, then CPR 36.17 will not apply.
It is important to note that this rule only applies to defendants’ part 36 offers – a claimant may make a Part 36 offer to accept payments by instalment and it will be treated as a Part 36 offer in the usual way.
The rules do appear to create a lacuna where a claimant makes a Part 36 offer including payments by instalments but where the offer includes a counterclaim or adverse claim. I am not aware of any existing authority on this point; it is likely that this is because this only affects a very small number of claims. In my view, it is likely that the court would construe such an offer as being a claimant’s offer for the purpose of CPR 36.6(2) unless it related solely to a counterclaim, in which case I think that it would be treated as being a defendant’s offer in accordance with CPR 20.2(2)(b).
Matthew Rose is a Solicitor on the Costs team at Clarion Solicitors. Contact him at matthew.rose@clarionsolicitors.com or on 0113 222 3248.
Ensuring the validity of Part 36 offers – Essex County Council v UBB Waste (Essex) Ltd (No. 3) [2020] EWHC 2387 (TCC)
The High Court judgment in Essex County Council v UBB Waste (Essex) Ltd (No. 3) [2020] EWHC 2387 (TCC) considers a number of interesting costs issues. This article will focus on the intended Part 36 offer made by the receiving party and the judgment regarding the validity of the same.
The parties agreed that the local authority was successful in the substantive litigation and was therefore entitled to a costs order in its favour. There were, however, a number of issues in dispute, including whether an offer made by the receiving party in March 2019 complied with CPR 36.
In order to comply with the requirements of CPR 36 an offer must follow the form and content provisions set out at CPR 36.5 (1). Specifically, it must (a) be in writing, (b) make clear that it is made pursuant to CPR 36, (c) specify a period of not less than 21 days within which the Defendant will be liable for the Claimant’s costs in accordance with rule 36.13 or 36.20 if the offer is accepted, (d) state whether it relates to the whole or part of the claim and (e) whether it takes into account any counterclaim.
The offer in question, intending to comply with CPR 36.5 (1) (c), stated:
“If the Defendant accepts the offer within 21 days of the date of this letter (the ‘Relevant Period’), the Defendant will be liable for the Claimant’s costs of the Proceedings (including pre-action costs) up to the date on which written notice of acceptance of this Offer is received by the Claimant, in accordance with CPR 36.13.”
The key issue is the reference to the ‘date of this letter’. The offer was dated 7th March 2019 and was served by email at 4.54pm. It was therefore deemed served on 8th March 2019 (CPR 6.26).
The Defendant argued that, as the 21 days ran from the date of the letter (7th March), the relevant period expired only 20 days from service and the offer was therefore not compliant with the requirements of CPR 36.5 (1) (c).
The Claimant’s position was that the Court should construe the offer such that the 21 days ran from the date of deemed service as per C v. D [2011] EWCA Civ 646, [2012] 1 WLR 1962.
The judgment provides a detailed discussion of the approach to construction in respect of Part 36 offers and the preference to bring rational sense and consistency to the document as a whole. Mr Justice Pepperall concluded that, in the applicable context, the statement could be construed in either way, however, in accordance with C v D, it was preferable to construe the 21 days as running from 8th March which was “consistent with the clear intention to make a Part 36 offer and ensures that the offer is effective rather than ineffective”.
Whilst that concluded the issue, Mr Justice Pepperall went on to consider the position had the offer not been found to be compliant. Specifically, the Claimant’s ‘fallback’ arguments that any non-compliance was de minimis or that the Claimant could rely on estoppel.
In respect of de minimis errors, Mr Justice Pepperall concluded that Rule 36.3(2) is clear that an offer that does not comply with CPR 36.5 will not have CPR 36 consequences. The Court would, however, have the general discretion as to costs under CPR 44.
Similarly, as Part 36 is a self-contained procedural code, the rues of estoppel cannot be introduced. Again, the offer could be taken into consideration under CPR 44 but would not attract the advantages of CPR 36.
Mr Justice Peppernall concluded that the critical issue was one of construction and pointed out that similar difficulties could be avoided in future if parties used form N242A.
Points to take away
Part 36 offers need to fully comply with the mandatory requirements of CPR 36.5 to be effective. Where there is an ambiguity, the Court will prefer a construction that finds an intended Part 36 offer to be compliant, however, this should not be relied upon. If the Court is unable to make such a construction then estoppel and/or de minimis mistake will not assist in obtaining the advantages of CPR 36, such offers can only be taken into consideration under the general discretion under CPR 44.
When making (or indeed considering) Part 36 offers, practitioners should check the requirements carefully, if in doubt, use form N242A to avoid mistakes.
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.
The forthcoming changes to the CPR….
COP hourly rates – the wait is over!
Following a Hearing on 26 May 2020, the judgment by Master Whalan was handed down today, indicating a 20% increase to the rates payable in Court of Protection cases. After 10 years of no pay rise, the judgment is welcomed by professionals nationally.
The case was brought by 4 professional deputies from 4 different law firms as applicants collectively, namely Wrigleys Solicitors, Freeths LLP, Boyes Turner LLP and Gillhams Solicitors. The issue brought before the Senior Courts Costs Office was that of hourly rates and the fact that the Guideline Hourly Rates (GHR) had not changed for 10 years, but factors like inflation, increasing workload and growing responsibility on professional deputies had caused concern as to the sustainability of Court of Protection work. Clarion prepared the 4 bills of costs for submission, claiming the GHR of 2010 plus a percentage uplift to reflect RPI inflation (of approximately 31%) between 2010 and 2019.
A Directions Hearing took place on 17 April 2020 and the parties were asked to produce evidence in support of the claim. All four deputies, Clarion and instrumental resources from willing members of the Professional Deputies Forum produced evidence, further reinforcing that the 2010 rates were not fit for purpose.
Richard Wilcock of Exchange Chambers represented the parties at the Final Hearing, and relied on the relevant factors in the Civil Procedure Rules, the GHR Review Committee and recent case law in his submission, all pointing to the fact that changes to the rates payable were essential. He made two key arguments; the first being that COP work is specialised, combined with the fact that deputies carry, in general, higher overheads, including increasing overhead time, which should mean that the current rates are paid with an uplift. His second argument was presented as an alternative solution, in that if the SCCO wanted to rely on the GHR as a starting point, then it must apply an empirical uplift to reflect the incidence of inflation between 2010 and 2019.
Due to inconsistencies in the evidence produced relating to overheads, Master Whalan was not convinced by the first argument. He said that the findings “do not, in my view, demonstrate that the burden is one that is exclusive to COP work or that it is atypically high in comparison with that experienced by practitioners in comparable areas of practice.” He confirmed that the approach set out in Re: Smith and others [2007] and Yazid Yahiaoui and others [2014] was still correct and applicable.
Maser Whalan then moved on Counsel’s secondary argument. He emphasised that he had no power to review the GHR, but recognised that they couldn’t provide “reasonable remuneration unless these rates are subject to some form of periodic, upwards review.” Importantly, Master Whalan states in his judgment, “I do not merely express some empathy for Deputies engaged in COP work, I recognise also the force in the submission that the failure to review the GHR since 2010 threatens the viability of work that is fundamental to the operation of the COP and the court system generally.”
On the topic of inflation, Master Whalan questioned whether CPI was more appropriate than RPI. He said “I am satisfied that in 2020 the GHR cannot be applied reasonably or equitably without some form of monetary uplift that recognises the erosive effect of inflation”. He further specifies that “If the hourly rates claimed fall within approximately 120% of the 2010 GHR, then they should be regarded as being prima facie reasonable” and provides a suitable table of the GHR with a 20% uplift to assist the Costs Officers undertaking future COP assessments:
| Guideline Hourly Rates | ||||
| Bands | A | B | C | D |
| London 1 | £490 | £355 | £271 | £165 |
| London 2 | £380 | £290 | £235 | £151 |
| London 3 | £275-320 | £206-275 | £198 | £145 |
| National 1 | £260 | £230 | £193 | £142 |
| National 2 | £241 | £212 | £175 | £133 |
Master Whalan concludes by saying that the rates above are applicable to all outstanding assessments, regardless of the year the work was undertaken. He also advised that the recommendations of the GHR Working Group must be adopted in preference to his findings.
This outcome is brilliant news for COP practitioners, providing overdue ratification for the work they conduct. Importantly, the outcome will mean that this area of work continues to be sustainable.
Clarion are delighted to have been a part of this case. We will be applying the 20% uplift to all cases going forward, and are happy to revise existing bills which have not yet been assessed to reflect the changes. Please contact stephanie.kaye@clarionsolicitors.com for further information and queries.
Can a non-solicitor Deputy charge fees at the solicitors’ rate?
In the recent case of The Office of Public Guardian v Andrew Riddle (Nos 1 and 2) Senior Judge Hilder had to decide if the professional Deputy could charge fees at the solicitors’ rate.
Background.
Mr Andrew Riddle is the managing director of ‘Professional Deputies’ that offers services that manage the property and affairs of adults who lack capacity. Mr Riddle is not a solicitor and Professional Deputies is not a Solicitors practice.
His primary position is that he should be able to charge fees at the solicitors’ rate, but he also had a secondary position in that he should be authorised to charge fees at a tailored rate, somewhere between public authority and solicitor rates.
The OPG’s position was that Mr Riddle should not be charging the solicitors’ rate until the Court of Protection makes an order to state otherwise.
Hearing
At the initial hearing, the Court was not satisfied that the deputy’s account of his qualifications and experience justified any conclusion that he should be remunerated at a higher rate than public authority deputies.
Judge Hilder held (at paragraph 104) that it would be appropriate to exercise the court’s discretion to extend the solicitors’ costs provisions to a non-solicitor deputy where that deputy demonstrates that they are also subject to professional obligations comparable to those integral to being a solicitor, and where that non-solicitor deputy accepts being held to the same standards as a solicitor.
However, she considered the facts of the case and his experience and qualifications but was satisfied he did not fulfil these benchmarks.
She did acknowledged that Mr Riddle was not alone in requesting a review of the fixed rates under Practice Direction 19B, as the rates have not increased since 2010 and The Professional Deputies Forum argues that rates are now therefore 31% lower in real terms than they were in 2010. She also noted that, there was a current review of solicitors’ guidelines rates in civil cases, which have also not been increased since 2010.
In paragraph 106, Judge Hilder observed that the rates of Practice Direction 19B should be similarly reviewed. However, that does not provide any basis for unilaterally behaving as if the rates are other than as they are. Until there is a review, she could not give any weight to this part of Mr. Riddle’s argument as to do so would undermine the Practice Direction.
Senior Judge Hilder thereafter, made orders refusing Mr. Riddle’s applications for authorisation to charge fees at the solicitors’ rate and refused his applications for relief from liability for past charges. She also allowed Mr Riddle a period of time to make good his word and restore each estate to its rightful level.
At the second hearing, the judgement held that Mr Riddle had been good to his word, and that the Public Guardian did not now seek revocation of his appointment in those cases. The judgment also confirmed that Judge Hilder had refused his application to charge fees at anything other than the public authority rates.
It was also agreed that each party should bear their own costs, and the Judge rejected the claim for the Public Guardian to pay any part of his costs.
This case highlights that when non solicitor deputies are managing the property and affairs of those with incapacity; they should carefully check the specific terms in the Deputyship order to ensure their charging rates are in line with the order. If the Deputy has any doubts, they should contact the OPG and then if necessary, seek authority from the Court.
The judgement also gives the OPG the standing to challenge cases and bring these to the courts attention without the consequence of having a costs order made against them.
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.
Child Trust Funds and access for those who do not have mental capacity
From 1st of September 2020, it is estimated that hundreds of thousands of teenagers can access their Child Trust Fund money given to them when they were born. The UK Government introduced the Child Trust Funds scheme in 2005 with the aim of ensuring that every child has savings at the age of 18.
Child Trust Funds gave between £250 and £1,000 of Government cash to all children born between 1 September 2002 and 2 January 2011. Parents could add to the fund until the child turned 18, when they have access to the monies, plus interest.
However, there was no consideration for those who may not have the mental capacity to be able to access and manage their funds at the age of 18. It is predicted that tens of thousands of disabled children are affected and are disadvantaged.
If they do not have capacity, then their families or carers will need to apply to the Court of Protection to act as the child’s Deputy. It is estimated that the process can cost from £365.00 for the Court Application to £2,500.00 for solicitor involvement. This could potentially be a sum which may exceed the amount held in the Child Trust Fund in the first place. Furthermore, given the current position with COVID 19, there is potential for delays on applying which would add further pressure to Court resources.
Missing the deadline to access funds means that the money is switched into a new account by the Child Trust Fund provider, which are allowed to pay less interest under HM Revenue and Customs rules. There is a current campaign for change to the system to ensure that more children will be able access their funds without incurring large fees.
The hope is that the government will take a practical approach under these circumstances and that a procedure can be put in place which allows families to gain access to their children’s funds without the added expense and potential delay when applying through the Court of Protection.
Brian Ferry is a Costs Lawyer in the Costs Department at Clarion Solicitors. You can contact him on 07741 663809 or by email to Brian.Ferry@clarionsolicitors.com
OPG v DJN
In this case, the Office of Public Guardian applied to the Court of Protection to revoke a Lasting Power of Attorney that had been made by P, which appointed his son (DN) as his attorney. He subsequently lost capacity and concerns were raised as to whether or not P had the appropriate level of capacity at the time it was prepared. It had been investigated and concerns were raised that DN had not acted in the P’s best interests by selling his residence and transferring the majority of the proceeds to himself and mixing the finances by operating a joint account.
In December 2017, a district judge suspended the operation of the LPA and directed the appointment of an interim deputy. This order was formalised shortly after.
DN contested the substantive application. He maintained that P had capacity at all relevant times and denied any wrongdoing.
At the final hearing on 17 and 18 June 2019, the OPG’s application was dismissed, DN’s attorneyship was restored and the appointment of the interim Deputy was discharged.
DN sought an order for costs of £82,000 and argued that the hostile approach taken by the OPG was wrong. A detailed skeleton argument in support of the point that the OPG had behaved unreasonably in the matter was submitted for the court to justify departing from the normal costs rule.
The OPG rebutted this with arguments that its approach was not hostile but simply fulfilling its duties under s58 MCA 2005 and the Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian Regulations 2017.
The Counsel for the OPG stated “In the alternative, if the court concluded that a costs order would leave P with insufficient funds, the court should make no order for costs. This would mean that the Public Guardian would bear his own costs and DN’s costs would be met from the monies he received from P.” Whatever position the court adopted, Ms Rich said that “this was certainly not a case where the Public Guardian should be made to pay the other party’s costs.”
Rule 19.2 of the Court of Protection Rules 2017 states that where proceedings concern P’s property and affairs, that the costs of the proceedings shall be paid by P or charged to P’s estate.
Rule 19.5 provides that: (1) the Court may depart from rules 19.2-19.4 if the circumstances so justify, and in deciding whether departure is justified the court would have regard to all the circumstances including; (a) the conduct of the parties.
The Public Guardian adopted what seemed to be a standard approach to litigation based on his approach to other cases. This was a serious failure especially when rule 1.4 COPR 2017 expects litigants to comply with the overriding objective. This obligation applies equally to the Public Guardian.
The judge concluded that there was good reason to depart from the usual costs rules as a result of the OPG failing to review the capacity evidence appropriately prior to commencing proceedings. Had this been done, the “obvious deficiencies” would have been noted.
Having consideration to the relevant law and the parties’ submissions, the order made was that the Public Guardian was not entitled to be paid his own costs from P’s funds and that he should pay 50% of DN’s costs (which shall include the costs of the appeal hearing) all of which shall be assessed at the Senior Courts Costs Office by a Costs Judge.
If you have any queries please contact Bridie Sanderson at bridie.sanderson@clarionsolicitors.com or 0113 336 3350.
Penalty for failing to serve a costs budget is variable
The sanction for failing to file a costs budget is clear under CPR 3.14; court fees only, unless the court otherwise orders. The CPR is silent however on the penalty for failing to serve a costs budget.
An unreported case was referred to recently in the ACL Costs News bulletin which described how a claimant who failed to serve their budget had their CMC costs cut in half as a penalty. The result of the failure to serve the budget led to the opponent having a reduced timeframe to prepare the budget discussion report but it did not prevent the CMC from going ahead. In this instance the Claimant did not need to seek relief from sanctions as the requirement to do so, where the CPR is silent, is not automatic.
In Djurberg v London Borough of Richmond and Others [2019] EWHC 3342 (Ch) it was held that a party in breach does not need to apply for relief from sanctions where it is not expressly required. At paragraph 32 Chief Master Marsh stated:
“it would be wrong for the court to search out reasons for imposing sanctions that do not obviously arise out of the terms of the CPR or an order made by the court.”
The judgement in this case also explored the possibility of the order containing an implied sanction, a concept that R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633 referred to in relation to filing an appeal in time. In circumstances where there is an implied sanction, a sanction where relief from sanctions is not necessary but where it has become common practice to impose the same sanction as if it were, the consequence would be the same.
To rely on submissions that the opponent was not prejudiced by any failure to serve a budget does not therefore come without risk, and so to avoid any penalty whatsoever, the best approach to take when filing a budget is to serve it too.
This does not preclude parties agreeing to the mutual exchange of budgets and for certain cases this can be the best strategy to adopt. If this approach is accepted by the parties then any agreement of mutual exchange should be made prior to the final date for filing to avoid facing any criticism.
Bethany Collings is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at Bethany.Collings@clarionsolicitors.com and 0113 227 3607, or the Clarion Costs Team on 0113 246 0622