Proportionality in the Court of Protection

You will have all heard about the ‘Jackson Reforms’, which so far, have not been something that Court of Protection practitioners have had to be too concerned about – until now.

As part of the ‘Jackson Reforms’, a new test of proportionality was introduced. Proportionality now trumps reasonableness and ‘necessity’. Even if a cost was reasonable and was necessary, it can be disallowed on the basis of proportionality. The purpose of this reform was to tackle disproportionate claims for costs.

The case of BNM and MGN Limited (see https://clarionlegalcosts.com/2016/06/10/who-needs-fixed-costs/#more-876) is an interesting case to consider in relation to the new test of proportionality, where a bill of costs was reduced from £167,389.45 to £83,964.80 on the basis of proportionality. This is one of the first cases to really demonstrate the power of CPR 44.3 (2) (‘Jackson test of proportionality’), which states:

Where the amount of costs is to be assessed on the standard basis, the court will –

(a) only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and

 (b) resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party.

 This ‘Jackson test of proportionality’ is something that has primarily been having an impact on civil and commercial claims for costs, however, we (Court of Protection Costs team at Clarion) are now starting to see the new test being applied to Court of Protection cases.

Under the new test, the Senior Courts Costs Office must assess a bill of costs (line by line) and determine what is reasonable. Thereafter, the new test of proportionality can be applied. The Costs Officer has the power to stand back and ask ‘was this a proportionate sum to incur on this matter taking into account all the factors relating to the case’, and in some instances, the answer can lead to significant further reductions to a Bill of Costs.

Going forward, we believe that this is something that will have an impact on Court of Protection cases. Not only will your costs be assessed based on what was reasonably incurred, but the SCCO can also consider other factors, such as the value of the Protected Party’s estate and other non-monetary influences when considering whether the assessed (reasonable amount) is proportionate.

We considered a recent assessment whereby the Protected Party’s estate was worth approximately £46,000.00. The Deputy submitted a bill of costs totalling £12,200.00. The bill was provisionally assessed at £11,500.00, but was thereafter limited to £9,000.00 due to the issue of proportionality, as a result of the value of the estate.

There is no guidance as to what is proportionate in these cases, however, the Costs Officer has the authority to determine what is proportionate at their own discretion. It will be interesting to see how this is applied going forward and whilst this area is still developing, requests for reviews or appeals may be appropriate. Albeit the financial position of the Protected Party is key, other factors such as the conduct of the Protected Party, the complexity of the matter and any key elements (international and business) may be influential in justifying your claim for costs.

If this is something which you require assistance with, please do not hesitate to contact myself or our team at COPCosts@clarionsolicitors.com.

What are ‘Payroll Rates’ and which tasks are recovered at these rates?

We recently received an assessed bill of costs where the time claimed for work in relation to payroll had been reduced to £95.00 an hour. It seemed that the Costs Officer had allowed ‘Payroll Rates’ as opposed to the hourly rates allowed by the Senior Courts Costs Office (SCCO). On discussion with the Costs Officer, it transpired that solicitors recover the SCCO hourly rates for their professional skills as a Deputy. Where their job entails payroll tasks such as timesheets calculations, wages, national insurance and tax then this will be remunerated at Accountants Clerk’s rates. The Costs Officer advised that Accountants who are appointed as Deputy will often claim between £60.00 and £100.00 per hour rate for payroll related tasks. It was therefore concluded that £95.00 per hour was an appropriate rate for such work undertaken by Deputies.

It seems like ‘Payroll Rates’ are becoming a regular occurrence in Court of Protection bills and therefore it is important to bear these in mind whenever such tasks are undertaken.

If you require any further advice or assistance in relation to your Court of Protection costs, please do not hesitate to contact the Clarion Costs Team on COPCosts@clarionsolicitors.com or 0113 246 0622.

 

How to Keep Your Costs Officer Happy!

Our specialist ‘Court of Protection Costs Team’ work for over 30% of the Deputies, and for that reason we have extensive knowledge in this area. Costs Officers tend to have a core approach which they apply to detailed assessments, together with areas which fall outside this core approach which are dealt with on a bill by bill basis. However, if the Costs Officer can deal with this core area with ease, then their job can be dealt with more easily.

An easier job = a happy Costs Officer = the optimum result!

Here are my top tips on how to keep the Costs Officer happy:

  • Always claim the appropriate hourly rates. If you do wish to claim a higher rate then an exceptional reason will be required to do so.
  • Try not to claim Grade A rates throughout the entirety of a Bill of Costs. If you are a sole practitioner or you are unable to delegate, it could be suggested that the more straightforward tasks be claimed at a lower rate. This ensures that the time and rate claimed are proportionate and reasonable to the task in hand.
  • Keep the ‘documents’ section of the bill as concise as possible to keep the Costs Officers attention.
  • Only claim for the tasks that are recoverable. A Costs Officer could look at the Bill less favourably if every task possible has been claimed for. Examples of non-recoverable items are – photocopying, …………
  • Clarify that certain parties within the Bill of Costs are not internal parties such as Tax Advisors or Accountants. If this is not clear, the time may be disallowed for a belief that it is inter-fee earner and therefore not recoverable, Leighanne Radcliffe (2004 ).
  • Try not to claim for two fee earners at an attendance, unless there is a valid reason for doing so. The Costs Officers will generally only allow one portion of the time claimed, Garylee Grimsley – (1998)

If these top tips are applied I am confident that that you will achieve your optimum result.

If you have any questions or queries in relation this blog please contact Danielle Schofield (Danielle.schofield@clarionsolicitors.com and 0113 3363213) or the Clarion Costs Team on 0113 2460622.