Tag: Clarion Costs Team

Pre-judgment interest allowed at 2% above the Bank of England base rate

Ellena HunterLeave a comment

Asturion Foundation v Alibrahim [2024] EWH 757 (Ch) concerned a very long-running action (9 years) during which the Defendant had incurred about £6.6 million in costs. The Claimant sought recovery of the title of an English property that had been transferred to the Defendant, by a board member of the Claimant.

Mr Justice Johnson found that the transfer of title was made within the purposes of the Foundation and the transferor had acted within the scope of internal competencies. It was agreed by the Claimant that the Defendant was the successful party and was therefore entitled to her costs.

The Defendant had failed on some points and therefore, the Claimant sought a percentage deduction to the Defendant’s recoverable costs to account for those unsuccessful issues. The Defendant conceded that a percentage deduction should be made but did not agree with the extent proposed by the Claimant. Ultimately, Mr Justice Johnson made a deduction of 15% from the Defendant’s otherwise recoverable costs.

The parties addressed Mr Justice Johnson on the issue of interest on costs. It was the Defendant’s position that interest should be paid on the costs expended by her since the dates of payments of the relevant invoices rendered by her solicitors. The Defendant emphasized that due to the litigation spanning a period of 9 years, she had been ‘out of pocket’ for a considerable period and she should therefore, be entitled to a payment reflecting the time value of money. This was calculated by the Defendant’s costs draftsman using a rate of 2% above the Bank of England base rate which was argued to represent a reasonable approximation of the Defendant’s likely costs of borrowing.

The Claimant argued that there should be suspension of payment of judgment debt interest until it had a fair opportunity to decide what sums it accepts should be payable, as a detailed bill of costs had not yet been received.

The Judge saw merits in both parties’ arguments.

In terms of pre-judgment interest, it was noted that this was within the Court’s discretion. The Judge determined that as the Defendant had been ‘out of pocket’ for a significant period of time, it would be unfair for her not to be compensated accordingly. Therefore, the Judge ordered that pre-judgment interest be paid at 2% above base rate from time to time. Interest was not, however, awarded during a 2.5-year period in which the proceedings were in a ‘state of suspense’ pending determination of the Defendant’s strike out application that was eventually unsuccessful.

The Judge did agree that the Claimant should be afforded further time to consider the bill (when received) and to determine what it accepts as reasonable and proportionate. Therefore, Mr Justice Johnson suspended the accrual of judgment debt interest for a period of 3 months but allowed pre-judgment interest to continue.

Ellena Hunter is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

PSG Trust Corporation Limited v CK [2024] EWCOP 14

hawamayetLeave a comment

This case concerned how a Property and Affairs Deputy should approach the issue of whether to inform P of the value of their Civil Litigation settlement in the case in which knowledge of the same may make them vulnerable.

The applicant, PSG Trust Corporation Limited, acts as the Deputy for both CK and NJ and highlighted the predicament which deputies regularly face as there is little guidance regarding informing P of the value of their settlement.  After reviewing what relevant case law there is, Hayden J set out some of the factors to be weighed in making the decision:

‘The ‘matter’ or decision is whether P wishes to request the value of her funds, and the factors relevant to her capacity to make that decision are likely to include her understanding of:

i. The nature of the information in question;
ii. The risks of obtaining it;
iii. The risks of not obtaining it;
iv. The benefits of obtaining it;
v. The benefits of not obtaining it.’

Hayden J then applied the principles to the cases before him. CK was involved in a traffic accident and as a result of her injuries has vulnerabilities. Hayden J concludes CK lacks capacity to take the decision herself but has clearly expressed her wishes that she should know the amount of the settlement, so that she can make a Will amongst other things, and therefore declares that it is in CK’s best interests to be told. NJ has been diagnosed with Cerebral Palsy and other conditions, and there was a history of financial abuse, making NJ vulnerable to exploitation. Accordingly, Hayden J finds NJ lacks capacity and that it would not be in her best interest to be told of the amount of the award.   

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

A substantial reduction of costs on the indemnity basis in a summary assessment

ujjainimistryLeave a comment

Mrs Justice Knowles summarily assessed the costs of a dismissed committal application, made by the wife in Alvina Collardeau v Michael Fuchs & Anor [2024] EWHC 642 (Fam). The costs of the First and Second Respondents were assessed on the indemnity basis, but they were substantially reduced for the reasons set out below.

Indemnity Basis:

Mrs Justice Knowles saw ‘no justification for departing ’’ from the principle that indemnity costs are usually imposed in contempt proceedings, and she, therefore, assessed the costs on this basis. The Judge noted that the applicant’s case was ‘weak and evidentially flawed’’ as well as being ‘improperly motivated and disproportionate’.

CPR 44.4(1)(b) outlines the factors to be considered in deciding the amount of costs to be awarded when assessing on the indemnity basis. Costs will be allowed if they are not unreasonably incurred, or they are not unreasonable in amount; any doubt will be resolved in favour of the receiving party. The Court do not need to have regard to proportionality when assessing costs on the indemnity basis. This means that the receiving party is likely to obtain a higher percentage of their costs claim on assessment than if costs were assessed on the standard basis.

Despite Mrs Justice Knowles ordering that the costs be assessed on the indemnity basis, she did determine that the costs incurred by both respondents were ‘manifestly excessive and unreasonable’. The total spent between both respondents was £510,876.90. The Second Respondent submitted that he was entitled to have regard to the wife’s profligate approach to litigation costs when instructing his own legal team. The Judge deemed this as a ‘wholly unreasonable approach, which encourages exorbitance, if not profiteering’.’ This Respondent’s total costs exceeded £330,000.

The First Respondent’s costs were reduced by 33% as it was not justifiable to have 2 of each grade of fee earner preparing the case, charging a significant rate. Counsel’s fees were also reduced by 50%.

The Second Respondent’s fees were reduced by 44%. But this was still considered unreasonably high and excessive. There were 3 Grade A fee earners on this matter, which was deemed unnecessary. The costs associated with any obtained expert evidence was deducted in full as the court did not grant authorisation for expert evidence to be adduced.

Mrs Justice Knowles considered all features of the case and in order to reach a just decision, costs were assessed on an indemnity basis, but the costs were heavily reduced as they were considered to be wholly unreasonable.

Ujjaini Mistry is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at CivilandCommercialCosts@clarionsolicitors.com

Litigant in Person required to file and serve a costs budget

Bethany CollingsLeave a comment

In a recent Judgment, Cotham School v Bristol City Council & Ors [2024] EWHC 824 (Ch) it was held that a Litigant in Person (“LIP”) was required to file a costs budget as they instructed Direct Access Counsel. HHJ Paul Matthew handed down a judgment following an application for a costs capping order under CPR rule 3.19.

HHJ Paul Matthew stated:

“It seems to me that, if there is any risk, let alone a substantial risk, that disproportionate costs would be incurred in this case, the better instrument for preventing that undesirable event is effective costs management orders, rather than the ‘blunt instrument’ of a costs capping order. In the circumstances, I propose to order pursuant to rule 3.15(1) and (3)(a) that, although this is a Part 8 claim, and although the second defendant is a litigant in person (albeit employing counsel on a direct access basis), all parties must file and exchange costs budgets not later than 21 days before the first case management conference. Having so ordered, the preconditions for a cost capping order under rule 3.19 are not satisfied, and I decline to make such an order.”

Under CPR 3.12(1), LIPs are exempt from complying with costs budgeting. However, the Court retains discretion to order a person to file and serve a costs budget, even if they are not obliged to do so pursuant to CPR rule 3.12(1A).

HHJ Paul Matthew referred to the case of Campbell v Campbell [2016] where Chief Master Marsh confirmed:

“Furthermore, the court may decide to make a costs management order in relation to a litigant in person’s budget. Indeed, in a case in which a litigant in person is likely to be seeking a substantial costs order, whether because there will be fees of counsel under the Direct Access scheme or otherwise, it may well be desirable to do so.” 

Conversely, HHJ Paul Matthew referred to the case of CJ and LK Perk Partnership v Royal Bank of Scotland [2020] EWHC 2563 (Comm), where it was held that LIPs with direct access Counsel should not file and serve costs budgets.

In this case, although the LIP had instructed Counsel under the direct access scheme and did not instruct solicitors, HHJ Paul Matthew concluded that due to the potential significant claim for costs if successful, all parties, including the second Defendant (the LIP), should file and serve a costs budget, regardless of the nature of Part 8 proceedings.  

Bethany Collings is a Paralegal in Clarion’s Costs and Litigation Funding Team and can be contacted on 07774 951949 or at bethany.collings@clarionsolicitors.com

COP Costs Case Law

elliescallyLeave a comment

Following submission of a Bill of Costs, the Costs Officer will assess the same to ensure that the costs charged are fair and reasonable, and will often refer to case law to justify the decisions they make with regard to reducing/excluding entries.

Please see below some of the most common case law that is applied on a regular basis by the Costs Officers:

R v Legal Aid Board Ex Parte Bruce (1991)

This case dealt with the issue of two or more fee earners at one attendance.

It was 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”. 

Garylee Grimsley (1998)

This case was a continuation of the issues in R v Legal Aid Board Ex Parte Bruce (1991), in which two fee earners at one attendance was reduced on the justification of duplication. As such, it is recommended that two fee earners at an attendance are only claimed in exceptional circumstances and where reasonable to do so, such as where there is a safety risk.

Trudy Samler (2001)

This case dealt with attendances upon the Protected Party and reductions due to an excessive amount of contact.

In the case of Trudy Samler 2001, it was stated “The practice…. is easy for a receiver to justify one visit to the patient each year but that each succeeding visit must be justified…. Could the progress made by the meeting have been achieved more economically by way of a telephone call or correspondence?”.

The case also looks into the costs incurred when contact is instigated by the Protected Party and whether the Deputy should be expected to be paid for such contact. Master O’Hare advised that part of the Deputy’s duty is to prevent such expenses being incurred as it is their responsibility to look after the Protected Party’s financial affairs and to manage contact with clients as best as possible, so expect reductions to excessive contact with the Protected Party or other parties to reflect this decision. If there are high levels of contact with P, this should be justified and explained as best as possible within the narrative of the bill of costs to set out why and what steps were taken by the Deputy to best manage this.

Jamie Walker (2002)

This case dealt with incoming correspondence.

Master O’Hare applied the following provision for time spent perusing incoming correspondence: “Routine letter out and routine telephone calls will in general be allowed on a unit basis of 6 minutes each… The unit charge for letters out will include perusing and considering the relevant letters in and no separate charge should be made for incoming letters”.

This decision also impacted time claimed for arranging payments and considering invoices which are routinely reduced to 3 minutes at Grade D rate on assessment.

Leighanne Radcliffe (2004)

This case dealt with enclosure letters whereby 6-minute claims for letters enclosing invoices were reduced to 3 minutes.

Costs Officer Sainthouse referred to Master O’Hare’s decision which had been made in the matter of Jamie Walker in that the time spent checking the invoice, arranging payment and preparing the appropriate letter/cheque was non-fee earner work.

Smith & Others (2007)

This case dealt with hourly rates and determined what Deputies should be charging hourly.

Master Haworth ruled that Court of Protection work should be allowed in accordance with the guideline hourly rates published by the SCCO.

Yazid Yahiaoui (2014)

This case dealt with the introduction of blended rates and stated that “…where work is being carried out either as a team or by an individual that spans work that would normally be dealt with by a Grade B, C or D fee earner, a blended or enhanced rate may be appropriate…”

Philpott (2015 – unwritten)

This case dealt with record keeping.

In the case of Philpott (2015- unwritten), Master Haworth commented in respect of updating the Protected Party’s financial records, stating “It seems to me that the inputting of data into P’s ledger is not fee earning work. At most it is bookkeeping which, to my mind, is an overhead of a solicitor’s practice. This work has to be distinguished from for example, reviewing or perusing the data to come to a decision as to what then needs to be done with a P’s funds. To my mind that may well amount to fee earning work for which the solicitors can charge separately at the appropriate rate.”

Therefore, we recommend avoiding the word ‘updating’ within your work.

Staffordshire v SRK [2016]

This case dealt with welfare work, in particular, work relating to the application for the Deprivation of Liberty Safeguards.

The case stated: “A deputy who agrees to pay for care and treatment of P or for a property for P could not properly ignore the issues (a) whether P was being deprived of his liberty or restrained, and (b) whether that was lawful or needed authorisation under the DOLS or by the making of a welfare order”. As such, this time is always included in the bill of costs. Other welfare work is likely to be reduced or disallowed on assessment.

Tina Jayne Cloughton (1999) and Fuseon Limited (2020)

These cases dealt with delegation of work to a lower grade fee earner.

It was stated that a professional Deputy should delegate suitable tasks to colleagues and employees. The Deputy must be careful not to increase his/her claim for costs by duplicating work done by colleagues.

In 2020, a decision was made in the case of Fuseon Limited which stated that time spend delegating should be fully recoverable. This was a civil decision, and therefore it’s not known whether this same approach will be taken in COP matters. Where delegation has occurred in a COP case which progresses the matter and ultimately saves P money, attempts should be made to recover this time.

The time claimed should be proportionate to the money saved to P, and any work that is delegated should then not require extensive supervision, as this would be considered duplicative.

Understanding the e-bill

If the Costs Officer has applied case law to the Bill of Costs on assessment, they will outline this in Tab Z. Solicitors should be aware of the case law to ensure that they’re not charging the Protected Party unfairly and to understand the reductions applied and whether these are justified.

If you require further information in respect of Court of Protection costs, post-assessment advice or case law, please do not hesitate to contact Ellie Scally.

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

New Fixed Costs in COP – what you need to know about PD19B and the changes

Laura SugarmanLeave a comment

This month, it has been announced that there will be an increase to the fixed costs following a revised publication of Practice Direction 19B, applicable from 1st April 2024 for COP practitioners. This is a welcome increase, given that the previous fixed costs were deemed to be outdated, particularly in light of the recent increases to hourly rates as a result of PLK, GHR 2021 and GHR 2024.

The new fixed costs are as follows:

WORK CARRIED OUTPREVIOUS FIXED COSTS ENTITLEMENT (plus VAT)NEW FIXED COSTS ENTITLEMENT (plus VAT)
Application Work9501204 
1St GM year16702116
2nd and subsequent GM years13201672
Deputy Report265 336
Basic Tax Return250 317
Complex Tax return600 Reasonable/ or three quotes (ACC)
ConveyancingMin 400 max 1670 Reasonable /or three quotes (ACC)
Interim paymentsUp to 75% of WIP, raised by way of three quarterly billsUp to 75% WIP for the year or 75% of OPG105 estimate. whatever is lower. 

The increases to most of the fixed costs represents a 26% rise from the previous available figure.

As well as the increase to fixed costs, the threshold for hardship cases has also increased. This was previously £16,000 but this has now increased to £20,300. Therefore, if P has less than £20,300 in assets, the Deputy will be unable to have their costs assessed but instead will be limited to 4.5% of P’s assets.

The changes to interim payments is a welcome shift which will help cash flow for firms, as payments on account are not limited to quarterly, therefore billing monthly may be preferred so long as the OPG105 estimate is in line with the WIP incurred.

This month has also seen an announcement regarding the increase in court fees. Following a consultation, the government has decided to proceed with increases of 10% to 172 of the 202 fees that were proposed in the initial consultation. This will directly impact COP Practitioners. The court fee for requesting a detailed assessment has increased from £87 to £96, the court fee to appeal against a COP costs assessment decision has increased from £70 to £77 and the court fee for a request to set aside a default costs certificate has increased from £65 to £72.

There has also been an increase in court fees for Court of Protection applications. These have increased from £371 to £408. The court fee for appealing has increased from £234 to £257.

It is incredibly important that COP practitioners update their client care paperwork to reflect the new fixed costs if they are sought, in addition to the new court fees.

If you have any questions about any of the above, please feel free to contact Laura Sugarman at Laura.Sugarman@clarionsolicitors.com

The latest update from the SCCO as to their delays.

Ellie Howard-TaylorLeave a comment

We are all aware of the delays at the SCCO, but unfortunately that bill you submitted in August 2023 is still a while off being assessed and received back.

What are the delays?

Currently the Costs Officers are being assigned bills of costs for which supporting papers were received towards the end of April 2023.

The admin team are currently sending out bills returned to them during the beginning of March 2024.

With regards to e-filings that have been submitted, but not yet accepted or rejected, the SCCO are currently looking at filings submitted towards the beginning of November 2023. They are dealing with FCC filings submitted during the end of February 2024.

All together from filing the bill with the SCCO, to having it accepted, assessed and returned you can expect to be waiting around 15 months to receive your bill of costs back.

What can you do in the meantime?

Ensure your interim payments are up to date. As a Court of Protection Deputy, under Practice Direction 19B, you are entitled to bill up to 75% of your WIP incurred during the management period, with the remaining 25% to be taken once the FCC has been obtained.

Whilst the SCCO have asked customers not to chase any bill that falls into the 15 month window, as outlined above, we recommend keeping a record of when bills were submitted and accepted at the SCCO and to chase anything that is now greater than 15 months.

You can contact the SCCO directly at scco@justice.gov.uk with any queries, alternatively speak to your Cost Draftsman who may be able to assist. If you are contacting the SCCO directly please make sure you have the SC reference to hand for a quicker response.

If you have any questions on the information above, or any general queries please get in touch at ellie.howard-taylor@clarionsolicitors.com.

Sandwell and West Birmingham Hospitals NHS Trust v GH [2023] EWCOP 50 

Stephanie KayeLeave a comment

This case involves an application made by an NHS Trust, seeking a declaration that an individual lacked capacity to make decisions about treatment for breast cancer, specifically the undertaking of breast cancer surgery (a mastectomy) and associated care and treatment. 

Background: 

In March 2023 GH, a 52-year-old woman with a prior diagnosis schizoaffective disorder was diagnosed with breast cancer,  and has refused all treatment because of her described ‘delusional’ beliefs. As a response, the Trust that manages her cancer treatment applied to the Court of Protection for declarations and orders that P lacked capacity to conduct the proceedings and to make decisions about whether to agree to undergo the necessary breast cancer surgery and associated care and treatment.

Dr Aziz concluded that there were issues with regards to her mental capacity as determined by the capacity assessment. This was decided on the basis that P had been in regular contact with mental health services since 2006, and had previously been detained under Section 3 of the Mental Health Act 1983 for suffering with psychosis, which involved GH hearing voices on a regular basis. In 2012, she suffered a relapse which was thought to be due to non-compliance with her medication. This resulted in her once again being detained under the Mental Health Act from 2022 to early 2023.

Conclusion: 

Mr Justice Poole stated that he was ‘satisfied that all practicable steps to help GH have been taken without success. There have been a number of discussions with her and professionals have tried to strip down the information to the basic information she requires, using straightforward language. The problem for GH is not that she cannot understand the key concepts involved, it is that she has delusional beliefs that prevent her from understanding and therefore weighing and using relevant information, namely that she has breast cancer’.

The court subsequently concluded that it was in GH’s best interests to undergo the necessary surgery in respect of her breast cancer diagnosis. GH subsequently underwent the mastectomy surgery which she did not resist, the tumour was operable, and she has recovered well from the procedure with no adverse effects noted with regards to her mental health.

Manchester University NHS Foundation trust v Y [2023] EWCOP 51

Tanya ForanLeave a comment

This case involved capacity and the refusal of treatment. It was necessary for the Court to consider P’s independence and his best interests when making a decision.

Following a long history of schizophrenia, P sustained a severe injury and was reluctant to undergo treatment.

Recently, an application was made by the NHS Trust to assess whether P held the capacity to consent to surgery and if he lacks capacity in this matter, to consider whether the proposed surgery was in his best interests.

Background:

By way of background, P is a 42-year-old male who has been diagnosed with Paranoid Schizophrenia. On 27 October 2023, P was found unresponsive in the community; He had sustained multiple injuries and suffered from a seizure. Following this, the P was admitted to his local emergency department where it was determined that P had fractured his left humeral head and dislocated his left shoulder.

P had recently switched his medication, which was used to manage his schizophrenia, from clozapine to olanzapine, which may have deteriorated his condition. Some of the side effects of olanzapine include depression, unusual behaviour and restlessness; it is suggested that this could explain P’s deviant behaviour, such as hostility towards staff.

Paranoid Schizophrenia gives rise to irrational beliefs and delusions which impact the way in which a person interprets their surroundings. As P was diagnosed with Paranoid Schizophrenia, he experiences delusions, which lead him to believe that surgery was unnecessary as it would not prevent future pain. P also believed that he was unable to lose function in his arm and therefore, treatment was not required.

Legal Background:

Dr F is a consultant liaison psychiatrist who met with P on 9 November 2023 to conduct a capacity assessment. The aim of the capacity assessment was to determine whether P held capacity to consent to surgery.

A variety of concerns were raised by Dr F regarding the treatment of P’s schizophrenia; P had not attended follow-up appointments with his community group and there were concerns that he had not taken his antipsychotic medication. Following P’s admission to hospital, he met with the mental health team who identified that since October 2021, P’s condition had deteriorated severely. It was clear that P was unaware of his diagnosis as he declined medication for his paranoid schizophrenia; P also denied any mental ill-health. Therefore, Dr F concluded that P lacked the capacity to refuse the surgery he required, because of his delusions, he was unable to believe the medical rational.

Mr D, a consultant orthopaedic surgeon, described the surgery as the ‘best treatment’ for P’s consistent shoulder pain. Mr D also determined that P did not hold the capacity to refuse surgery. P’s brother and father supported this conclusion by advising Mr D that if P held capacity, he would want to have the surgery.

As P lacked the capacity to comprehend the surgery he required, he was unable to make a decision within the means of Section 3 of the Mental Capacity Act 2005 and subsequently, was unable to provide his consent, or refusal, to the surgery. He therefore lacked capacity in respect of the relevant matter, the giving of his consent for shoulder surgery. Thereafter, the NHS Trust sought a declaration that it was lawful to complete surgery on P’s shoulder and restore function to his arm.

Conclusion:

The Court of Protection ruled the application in favour of the NHS Trust. Despite all the practicable steps taken to assist P in making a capacitous decision, they were unsuccessful as P was unable to assess the benefits and the risks of the surgery he required.  

Subsequently, an Order dated 14 November 2023 was sought declaring that it was lawful to conduct the surgical procedure because it was within the P’s best interests.

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

GK & Anor v EE (formerly known as RK) & Anor [2023] EWCOP 49

Ella WilkinsonLeave a comment

The recent case involves an application by EE’s parents, GK and LK, to prevent EE from undergoing any type of gender affirming medical treatment and to instruct an expert psychologist and an expert psychiatrist in those proceedings.

Background

EE is 18 years old and identifies as non-binary, using the pronouns they/them. EE wished to undergo gender affirming surgery. EE’s parents objected to this, stating “we strongly object to our daughter accessing medical intervention to change her body”. They contended that EE wearing a breast binder was a form of self-harm and were concerned regarding EE’s desire to undergo ‘top surgery’, which is a surgery that removes breast tissue and reshapes the chest, arguing that this procedure was irreversible and would leave EE with adverse health consequences. EE’s parents requested a final declaration and consequential Orders from the Court of Protection. 

Legal Framework

EE’s parents argued that the NHS Service Specification stated that any form of social transitioning in adolescents should not be seen as a neutral act but an active intervention that should only occur with the intervention of qualified clinicians, therefore EE did not have the capacity to make the decision to undergo any gender affirming procedure. EE and the local authorities argued that EE was not undergoing any form of gender affirming surgery and no treatments were scheduled for the future, therefore, in line with the Mental Capacity Act 2005, it would not be appropriate for the Court to make any declaration or Order on EE’s parents’ application at the time. 

Conclusion

As a result of the above, the Court of Protection refused the application on the grounds of there not yet being a clear matter as to which the Court could explore and determine the question of capacity under S2(1) Mental Capacity Act (2005). The Court was further satisfied that expert evidence as to capacity was not needed to resolve the issues in the proceedings.