Unusual Granting of an Order to Prevent the Protected Party from knowing the full details of his Personal Injury Settlement following an application made by his Professional Deputy.

In this personal injury case, the judge had to grapple with an unexpected question – should a Deputy, appointed to manage the personal injury payment made to a brain-injured claimant, be allowed to not tell the claimant the exact amount that was awarded to him?

The case of EXB v FDZ

The case of EXB v FDZ (2018) was very unusual in that it involved an application by the Protected Party’s professional Deputy, and his mother as Litigation Friend, to prevent the Protected Party from knowing the full details of his personal injury settlement, which was deemed to be in his best interests.

This was a complex matter, as the Court recognised that withholding such information inadvertently affected the Protected Party’s rights. Judge Foskett explained in his judgement that he had never come across this issue before and he called upon assistance from Ms. Butler-Cole as a ‘friend of the Court’.

The Protected Party

The Protected Party sustained orthopaedic injuries, alongside a severe brain injury following a road traffic accident. The Protected Party was a backseat passenger in a car driven by the First Defendant. The Protected Party was not wearing a seatbelt and his damages were reduced accordingly, following an admission of contributory negligence.

Why was it in the best interests of the Protected Party to withhold settlement info?

The applicants submitted evidence from both themselves and professionals which detailed the reasons as to why it was in the Protected Party’s best interests to withhold the settlement information.

The Protected Party’s neuropsychologist stated that “Such knowledge would translate and impact upon his behaviour”. It was believed that the Protected Party would become fixated by the sum of money, that it would lead to him being extremely vulnerable and placed into a situation where he was likely to be financially exploited. Interestingly, the Protected Party himself expressed to his Deputy and the Court that he would be better off not knowing the sum; however, he also stated that he was conned into making such a statement. Following the accident, the Protected Party was very impulsive, and he often became very anxious when it came to money, struggling to budget and often living beyond his means.

The Judge gave careful consideration to the evidence submitted, as well as reviewing the relevant legislation, such as the Mental Capacity Act 2005 and the UN Convention on the Rights of Persons with Disabilities (CRPD). Following this, the Judge held that the Protected Party lacked the relevant decision-making capacity, finding that it was in the Protected Party’s best interests not to be told the value of the reward. The Judge also considered whether it was within the scope of a normal Deputy Order not to reveal the sum; however, the Deputy argued that it would make the Deputy’s life more difficult if the Protected Party believed that he was personally withholding the information and it was considered more appropriate for the Deputy to state that the Court prevented him from doing so.

Costs of the application

The next issue that arose was in respect of the costs of the application. The Claimant sought the costs of the application to be paid by the Third and Fourth Defendants of the Personal Injury claim, as their tort had necessitated. The Third and Fourth Defendants objected to paying the costs. Their defence stated that “they should not be responsible for the costs because all of the issues between them and the Claimant were concluded by the Settlement which was approved in April 2018” and that this particular issue was a ‘solicitor/own client’ dispute. Within the remit of the initial Personal Injury claim, there was no claim for costs attributable to this issue within the Schedule of Loss and there was also the fear that there may be an “open-ended commitment to pay the costs associated with any repeat applications”.

As the issue had been dealt with under the Court of Protection, it was necessary to apply the Court of Protection costs rules. The general rule being that where the issue concerns financial matters, the costs of all parties are to be borne from the Protected Party’s estate (Rule 19.2). The Court does have a broad discretion to depart from the general rule, if circumstances made a different order more appropriate (Rule 19.5). In this case, the Third and Fourth Defendants had not been made formal parties to the application, but they had been provided with an opportunity to make representations regarding the Costs Order being sought.

Judge Foskett held that the costs were to be borne by the relevant Defendants, as the need to make the application arose directly from their actions following the injury caused to the Protected Party, therefore departing from the general rule.

It will be interesting to see whether there will be any similar applications and what the outcomes will be. The Judge has invited the appropriate bodies to consider these matters and decide whether a consultation on this issue will be required.

This blog was prepared by Danielle Walker who is a Costs Lawyer within the Court of Protection Team. Danielle can be contacted at Danielle.walker@clarionsolicitors.com

 

 

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Disproportionate Costs in the Court of Protection

In the case of Hounslow v A Father & Mother (Costs in the Court of Protection – Disproportionate litigation) [2018] EWCOP 23, Judge Eldergill looked at the effects of deviating away from the simple issue at hand and the way that costs can spiral when disproportionate and unnecessary work is undertaken. It also looked at the costs consequences and the unfairness that can be encountered by a Litigant in Person.

The proceedings were in relation to a young man. The Applicant was the London Borough of Hounslow and the Respondents, were the young man’s parents.  The young man resided with his father and suffered from a severe learning disability, which rendered him unable to manage his own property and financial affairs. The financial assets were modest, and the young man received a number of benefits. At the time that the proceedings were issued, the father was the Department of Work and Pensions appointee and the mother assisted with the administration of his state benefits.

In this case, the local authority considered that a Deputyship would be more appropriate due to financial safeguarding concerns, obtained by an anonymous informant.  On 6 February 2017, the Court issued an application filed by the local authority, which asked the Court to appoint the Director of Children’s and Adult Social Services as the Deputy.

On 1 March 2017, the father filed an acknowledgement of service, opposing the application. The father stated that the local authority had failed to provide him with a copy of the application saying it was ‘confidential’. It was also stated that the local authority had not provided any more details or evidence in support of the application.

A Dispute Resolution Hearing had been listed for 2 May 2017, following which no resolution was reached. Judge Hilder listed a number of comprehensive directions in relation to the filing of evidence, position statements and the trial. The matter then came before Judge Eldergill and he stated the following;

1) A case involving the alleged misuse of state benefits has generated an enormous amount of documentation, and no doubt legal costs, quite disproportionate to the simple central issue of an alleged misuse of benefits.

2) The position statements and correspondence are full of generalised assertions of abuse of process, applications being misconceived, summary judgment, etc, which no doubt partly explains why so much paper has been generated.

3) Both legally-represented parties have made basic procedural errors (filing lengthy documents electronically despite what the rules say, including references to discussions at a DRH, filing bundles that are immediately to be returned, not serving the application within the required time limits).

I make these points because of the very clear costs implications.

He then made a further order on 13 November 2017, setting out concerns and the following directions:

UPON

(1)  Considering bundles and other filed documentation concerning this application of in excess of one thousand pages.

WHEREAS

(1)  The local authority has applied to be appointed as the deputy for property and financial affairs of [the son] who is a gentleman in receipt of social security benefits that are managed under a DWP appointeeship held by the First Respondent.

(2)  The outcome of the application will be either that the First Respondent continues to act as [his son’s] appointee (if the application is dismissed) or that the local authority is appointed as [his son’s] deputy, in which case the local authority automatically becomes his appointee.

(3)  The overriding objective of the rules is to enable the court to deal with a case justly. This includes ensuring that it is dealt with expeditiously, in ways which are proportionate to the nature, importance and complexity of the issues, saving expense, and allotting to it an appropriate share of the court’s resources. The parties are required to help the court to further the overriding objective.

(4) Unfortunately, an application concerning the management of [the son’s] benefits has generated over one thousand pages of documents and a huge amount of professional time, expenditure and legal costs quite disproportionate to a simple central issue of alleged misuse of benefits. While the court acknowledges that some of the documentation and expense was required of the parties as a result of the court’s case management directions of 2 May 2017, the amount of documentation filed has nevertheless been contrary to the overriding objective.

(5) Furthermore, and notwithstanding any submissions to the contrary:

(a) The position statements and correspondence are full of generalised assertions of abuse of process, applications being misconceived, summary judgment, etc, which no doubt partly explains why so much paper has been generated.

(b) Both legally-represented parties have made basic procedural errors (filing lengthy documents electronically despite what the rules say, including references to discussions at a DRH, filing bundles that are immediately to be returned, not serving the application within the required time limits, referring inappropriately to public interest immunity, etc).

(6) The parties will be aware that such considerations and observations have clear implications in terms of the recovery of the legal costs generated by these proceedings.

(7) On the documentary evidence filed to date, the court makes the following provisional observations in order to assist the parties:

(a)  The safeguarding investigation was fundamentally flawed and unfair.

(b) The financial information filed to date suggests that there was a lack of prudent good housekeeping under the previous arrangements in force until February 2017 in relation to the way in which benefits were used for [the son’s] benefit.

(c)  The position statement dated 27 September 2017 filed on behalf of the First Respondent is in quite general terms, in particular the financial tables at (internal) pp.10-12.

(d)  A hearing in the Court of Protection regarding the redaction of the identity of the informant would be disproportionately costly. Whether the initial report was malicious or not, and whoever the informant was, it is for the local authority to establish on evidence that there has been mismanagement or misuse by the Second Respondent of [her son’s] funds, that such mismanagement or misuse means that the First Respondent (sic) cannot remain as [his son’s] appointee, and furthermore that it justifies a deputyship order in favour of the local authority.

(e) To date, and despite a prolonged safeguarding investigation, the local authority has not established that the Second Respondent has used [the son’s] funds for her own benefit or that the First Respondent is an inappropriate appointee. If the local authority cannot prove that then it follows that the informant was an unreliable informant.

(f)  In relation to that issue, the local authority has not received unredacted copies of the Second Respondent’s bank statements or had an opportunity to test the evidence of both Respondents by way of cross-examination. That being so, summary dismissal of the application (with the likely costs consequences) would not be just or appropriate at this stage.

(g) On the basis that the local authority is unwilling to withdraw its application, a short half-day final trial is appropriate with the following witness template: First Respondent Evidence-in-Chief 15 minutes, Cross-Examination 30 minutes; Second Respondent Evidence-in-Chief 15 minutes, Cross-Examination 30 minutes; Submissions 30 minutes; Judgment 30 minutes.

(h) Prior to the hearing the Second Respondent must (as she has very fairly willingly agreed to do) file and serve unredacted copies of the previously filed bank statements.

The mother provided the bank statements and details of the withdrawals and expenditure and the final hearing was on 2 February 2018. The Local Authority had withdrawn its application and left the matter of costs to be determined.

The young man had no savings so the usual rule of costs, that the costs be paid from the estate was not an option.  Judge Eldergill stated that the ‘proceedings had taken up a wholly disproportionate amount of court time and had been conducted with insufficient proportionality.’ The Judge concluded that the case could have been resolved in an efficient manner by simply reviewing bank statements and asking questions, but instead there were ‘hundreds of unnecessary and bad-tempered correspondence, witness statements, position statements and emails’ which amounted to approximately £50,000.00 plus VAT costs in respect of the Respondents costs and £15,000.00 in respect of the local authority’s costs.

Payment of costs in respect of property and financial affairs applications under Rule 19.2, state that the ‘costs should be paid by P or charged by to P’s estate’, however Rule 19.5 can be applied when there is support in departing from the general rule. The judge held that the litigation was conducted disproportionately by both sides and there was a failure to focus on the simple central issue of; whether the bank statements could indicate any misuse of funds. Furthermore, Judge Eldergill stated that he did not believe that the ‘costs incurred by the First Respondent were proportionate to the issues, complexity of the case and the son’s circumstances’.

The proportionality of the work undertaken on behalf of the First Respondent were deemed to be assessed on an item-by-item detailed assessment basis. The Local Authority would then pay 90% of those costs, with the 10% reduction reflecting the Courts findings of the conduct of the other party. The costs in relation to the Litigant in Person were much more complex and the Judge felt that they lead to an injustice. The Judge also called for the rules to be reviewed and revised so that the Court can award a Litigant in Person costs in a case such as this one. It will be interesting to see if there are any developments in this area.

Mr Justice Hayden appointed as the new Vice-President for the Court of Protection – what does this mean for the Court of Protections future?

Further to the recent appointment of Sir Andrew McFarlane as President of the Family Division of the High Court comes the appointment of Mr Justice Hayden as the new Vice-President of the Court of Protection.

Who is Mr Justice Hayden?

Sir Anthony Paul Hayden was called to the bar at Middle Temple and was appointed as Queen’s Counsel in 2002. On 31 July 2013, he was appointed as a judge of the High Court of Justice in the Family Division.

Some of his most noteworthy cases that he has overseen include the legal challenge by the parents of Alfie Evans against Alder Hey Children’s Hospital.

What are the responsibilities of the President and Vice President?

The powers of the President and Vice President are to oversee the daily activities of the Court of Protection and to liaise with lower level judges to ensure effective performance in all aspects of the Court’s work. They require a good level of leadership, detailed knowledge of the Court’s jurisdiction and a comprehensive understanding of the Mental Capacity Act.

What does this appointment mean for the Court of Protection?

Considering the cases overseen by Mr Justice Hayden, his experience in matters relating to families and those who would be under the care of the Court of Protection is extensive, and will be invaluable in the future development of the Court.

Given the Mental Capacity Act (Amendment) Bill currently making its way through the legislative process, changes in the Court of Protection are on the horizon and Justice Hayden’s history in practice will be extremely useful in the implementation of these.

The team here at Clarion Solicitors wish to congratulate both Andrew McFarlane and Anthony Hayden.