Court of Protection Costs – What happens after the death of P?

Upon the death of the Protected Party, the Deputy’s authority under the First General Order seizes with immediate effect. Once the matter is transferred to the Executors of the Estate, the Deputy can agree their costs directly without a need for assessment, if possible, which will generally save the Protected Party money overall, without the need for the assessment process. If this is not possible, it may be necessary to apply to the Court for the costs to be assessed.

The interim work and the costs of the Deputy bringing the matter to a conclusion following the death of the Protected Party have been questioned over the years, as there has been very little guidance on this issue. In many cases, there is reasonable and necessary work involved in preparing the case for the Executor to thereafter deal with the Estate, however, what is a reasonable sum for this work?

Following correspondence with the Senior Courts Costs Office (SCCO), the following change has been made to the assessment procedure with immediate effect. The SCCO may now allow ‘reasonable costs’ (post death of the Protected Party) in order that the Deputy can finalise his/her involvement in the matter. The SCCO have indicated that such costs should not be expected to exceed £1,500.00 +VAT.

As a result, where it appears that the post-death profit costs exceed £1,500.00 +VAT, the Deputy will require the authority to assess that part of the Bill of Costs. Costs below this amount are likely to be deemed reasonable on assessment but are, of course, subject to the usual assessment process and will be allowed based on what was reasonable, necessary and proportionate in the circumstances.

If you have any queries relating to post-death costs in Court of Protection cases, please do not hesitate to contact Stephanie Kaye.

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The OPG105 Form – An Update for Professional Deputies

All professional Deputies should be aware of the OPG105 form (introduced in March 2016) which is required for submission alongside the OPG102 Deputyship Report on an annual basis to the Office of the Public Guardian in general management cases.

When submitting General Management Bills for Assessment to the Senior Courts Costs Office in relation to Deputyship matters, they are now requesting the above information. You may or may not have received notice from the Court stating the following:

“For the attention of Financial Deputies: Following the introduction of the OPG105 form in March 2016, please ensure when submitting general management bills for assessment, copies of the Annual Report/Accounts and Form OPG105 are attached to your bill to be assessed. Thank you for your co-operation in this matter.”

Following the Professional Deputy Costs Good Practice Guidance issued by the OPG and the SCCO in July 2016, it was requested that these documents were filed alongside the Bill of Costs for assessment by the Deputy. It’s apparent that very few Deputies are following this procedure and as such, the Court appear to be reinforcing the message. The guidance states:

“When submitting their bill for assessment, professional Deputies should enclose a copy of the fees estimate previously submitted to OPG. Estimates are not binding on the detailed assessment. If the costs claimed in the bill are 20% or more above the estimate it will also be necessary to provide reasons to the SCCO as to why there is a difference.

Should there be changes in the client’s circumstances during the year (and therefore costs to their estate), the Deputy should alert OPG if the fees are likely to be 20% or more than the submitted estimate. However, it will be for the SCCO to assess the professional Deputy’s costs at the end of the reporting year and for the Deputy to explain any inconsistencies.”

The guidance can be found here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/538901/19_07_16_Professional_deputy_costs__FINAL.pdf

If you have any queries in respect of the above information, please do not hesitate to contact Stephanie Kaye, Head of the Court of Protection Costs Team at Clarion Solicitors, at Stephanie.kaye@clarionsolicitors.com or alternatively, please call 0113 336 3402.

 

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.

Philpott – Is it reasonable to claim for updating accounts ledgers?

It is common knowledge that the SCCO refer to certain case law when assessing Bills of Costs in Court of Protection matters. Although the Costs Officers assess your incurred costs using their own discretion as to what is reasonable and proportionate, there are a number of themes which can be identified from the assessments we are seeing. If something stands out in which case law has determined that it cannot be charged to the Protected Party, it will be reduced or disallowed upon assessment.

A more recent case has come to our attention as we have seen the case quoted more recently on provisionally assessed Bills of Costs. In the case of Philpott, the written judgement was not published, however the SCCO were able to share a few comments made by Master Haworth whilst delivering his judgement. Essentially, whereby time has been spent updating the Protected Party’s financial records or schedules of income and expenditure, this has been noted as an ‘office overhead’ in some instances.

During the delivery of his judgement, Master Haworth made the following comments inter alia:-

“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. 

I know that I have a number of further appeals on similar lines which may well result in a written judgment from me in due course.  Nonetheless, it may be helpful for you to circulate this memo to the Costs Officers in the interest of consistency in the future.”

 Resultantly, we recommend that this task is delegated appropriately to a Grade D fee earner or non-fee earner where possible.

If you have any queries in respect of the above, please do not hesitate to contact the Costs Team at COPCosts@clarionsolicitors.com

 

The Fate of the ‘Court Fee only Budget’ post April 2015

Lawyers live in fear of having their costs budget reduced to court fees.  If a budget is reduced to court fees, the only solution to minimise the impact of this is to obtain an indemnity basis costs order – approved costs budgets should not be relied upon at any indemnity basis assessment.  Costs Management only applies to standard basis assessments, therefore this is the only way that a somewhat hopeless situation could potentially be rectified.  At the moment, the Claimant has the advantage. The Claimant can secure an indemnity basis award by making a well-pitched Part 36 offer, the Defendant cannot. Either party can secure indemnity awards raising arguments such as conduct, however awards made on this basis are much more difficult to achieve.

The Rule Committee have identified this and have amended the rules, which will be implemented in April 2015, to address this disparity. Cases in which the offeror’s costs have been limited to court fees is now governed by CPR Part 36.23.

(1) This rule applies in any case where the offeror is treated as having filed a costs budget limited to applicable court fees, or is otherwise limited in their recovery of costs to such fees.

(Rule 3.14 provides that a litigant may be treated as having filed a budget limited to court fees for failure to file a budget.)

(2) “Costs” in rules 36.13(5)(b), 36.17(3)(a) and 36.17(4)(b) shall mean—

(a) in respect of those costs subject to any such limitation, 50% of the costs assessed without reference to the limitation; together with

(b) any other recoverable costs.

The intention of the Rule Committee is to ensure that Part 36 still works in such cases and continues to provide an incentive to make a Part 36 offer.  Equally it is important that the innocent party should not regard itself as having a blank cheque to litigate the case.  Sanctions must therefore be imposed for turning down a reasonable Part 36 offer.

If you have any questions or queries in relation to this blog please contact Sue Fox (sue.fox@clarionsolicitors.com and 0113 3363389) or the Clarion Costs Team on 0113 2460622.