Tag: #fixedcosts

Fixed Costs and Remuneration of Professional Deputies

Laura SugarmanLeave a comment

On 18th June 2025, the Office of the Public Guardian issued new guidance in relation to fixed costs and remuneration of professional Deputies. The purpose of the guidance is to set out the general principles regarding fixed costs and the Public Guardian’s position on issues relating to fixed costs.

As you will be aware, rule 19.13 of the Court of Protection Rules confirms that Deputies can be remunerated for costs they incur when performing their duties as Deputy. The Court may order that the Deputy is allowed to take fixed costs. These are outlined in Practice Direction 19B (PD19B), which was recently updated, on 1st April 2024. Whereby the management period ended before 1st April 2024, the rates set out in the previous PD19B would apply, however if the period covered by the fixed costs ends on or after 1 April 2024, the rates outlined in the latest version of the Practice Direction apply. Generally speaking, a management period would run on an annual basis, however this guidance confirms that if the period is less than a year (for example if there is a change in Deputy or P passes away) the fixed costs claimed should be apportioned accordingly.

It is important to ensure that if you want to have your costs assessed but the Court Order only allows for fixed costs, the Deputy will not be allowed to take any costs higher than fixed costs as per the case of The London Borough of Enfield v Matrix Deputies Ltd & Anor. Our advice would be to apply to the Court of Protection to have the costs clause varied to allow for the costs to be assessed in these circumstances.

The guidance also reiterated the definition of net assets as per the case of Penntrust Ltd v West Berkshire Council & Anor. This case confirms that net assets is the total assets minus total liabilities. This includes any property owned by P, regardless of if they are currently residing in the same.

Whereby P has net assets of less than £20,300, the Deputy will not be permitted to have their costs assessed. Instead, they can take an annual management fee not exceeding 4.5% of P’s assets. The guidance also confirms that if there is a pending settlement which would take P’s assets significantly above £20,300, the Deputy should apply to the Court of Protection to seek authority to delay taking costs until the settlement funds have been received. This is a move away from previous guidance which has stated that the Deputy can only have costs assessed if P has assets above the threshold on the anniversary of the Court Order.

Further guidance has now been issued in relation to tax returns. Fixed costs can be taken for the completion of a basic tax return and complex tax return. It has been difficult to determine what would account for a complex tax return and therefore this guidance is very welcomed. The guidance states that:

‘PD 19B defines a basic tax return to cover cases where P’s income is derived primarily from bank or NS&I interest and taxable benefits, discretionary trust or estate income. A complex tax return may be defined as one which also includes income form more complex investments including stocks, shares and bonds, rental property, business income and foreign property. Public authority deputies may charge up to £89 for a basic tax return as set out at paragraph 18 of Practice Direction 19B to include bank or NS&I interest and taxable benefits and may charge an amount not exceeding £89. They may charge P for the completion of more complex tax returns as a specialist service P would be expected to play for if they retained capacity.’

Guidance has also been provided in the event of P’s death. The Public Guardian recommends that the Deputy agrees any costs with the personal representative of the administrator of P’s estate. Further, the guidance states that the Deputy is not permitted to take final costs after P’s death, if the estate has not yet been settled.

If you have any questions, please get in touch with Laura Sugarman for further information – laura.sugarman@clarionsolicitors.com.

The Precedent U Document: A Practical Guide

angelanakoLeave a comment

The Fixed Costs Determination process (FCD) was implemented on 1 October 2024 and with this new procedure the Precedent U was also introduced. The Precedent U is the first formal document, implemented for use specifically in the fixed costs regime.

For an overview of the FCD procedure, please see our comprehensive overview of the same. Below is a guide on how the form looks and what information is required to complete it.

Section A

This first section outlines the case details and the receiving party is also required to set out the track, band and value of the claim. The receiving party is also required to complete the relevant fixed costs calculations, and outline disbursements and court fees that they are seeking to recover.

It is at this stage that the receiving party should also indicate whether they are seeking costs pursuant to CPR 45.9, CPR 45.10, or CPR 45.50 (3) and / or CPR 45.13. The provisions deal with increased costs based on exceptional circumstances, vulnerability, and unreasonable conduct as well as assessment of fees on non-issued personal injury cases.

For the information provided within Section A to be valid, a statement of truth must also be signed by the receiving party to verify the costs which are being sought.

Section B

This section has three columns.

The first column is completed by the receiving party and outlines the sum of the fixed costs claimed, disbursements and court fees claimed and an explanation in support of those fees.

The second column provides the paying party the opportunity to respond to the receiving party’s claim, with the chance to make an offer for each item and outline an explanation as to why the original sums are not agreed.

The third column is completed by the Court if the parties are unable to reach agreement and the matter is determined by them.

Section B also requires a signature by the paying party.

Section C

Section C requires the receiving party to outline the basis of their claim for additional sums and provides the receiving party the opportunity to respond.

As touched on above, this section only requires completion when costs are sought pursuant to CPR 45.9, 45.10, 45.50(3) and/or 45.13. Therefore, Section C will only be used when claims are made for costs exceeding fixed recoverable costs where there are exceptional circumstances, unreasonable conduct and/or there is a vulnerable party or witness. It will also be used in the context of stage S1 costs, in non-personal injury claims where the costs are subject to a cap as opposed to being fixed.

When claiming costs under any of the conditions exhibited above, a separate N260 must be completed and submitted.

The form is limited in size and it may also be the case that a witness statement and supporting evidence is prepared and advanced when this section is completed.

 

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

Fixed Costs Determination Process: An overview and points of discussion

Daniel MurrayLeave a comment

The Fixed Costs Determination process (FCD), which was proposed within Lord Justice Jackson’s infamous review of civil litigation costs in 2017, is to be finally implemented on 1 October this year. 1 year on from the implementation of his other expansive recommendations and the extension of the Fixed Recoverable Costs regime.

There was initially some optimism within the legal costs world, that the process would not be implemented when it was omitted from the new rules. However, minutes from the CPRC meetings, released over the last 10 months or so, revealed an intention to implement the new streamlined process this year.

The procedure for the new process, which will be incorporated into CPR 45.63 to CPR 45.66 has been published in Civil Procedure (Amendment No.3) Rules 2024 and 171st update – Practice Directions amendments. The new Precedent U, which will be completed by receiving parties as part of the process has also been released for review.

How does the process operate?

Determination after a hearing

The new process will require any party who intends to claim any fixed costs or disbursements in a case captured by CPR 45, to file at court and serve on any party against whom an order for payment is intended to be sought a completed Precedent U. This new document must include, if applicable, the details of any claim under rule 45.9, rule 45.10 or rule 45.13, and is to be filed and served no later than 24 hours before the time fixed for the hearing. This is a slight variation on the current rules in relation to final hearings, where statements must be filed at Court 48 hours prior to the hearing commencing.

The Court may then summarily assess the costs, or if it is unable to make a summary determination at the hearing, then it may order a determination on paper, or a further hearing and make any directions it sees fit. The costs of that determination will be treated as an interim application and costs limited under CPR 45.8. Those costs currently amount to £250 plus VAT on cases which are assigned to bands 1-3 of the Fast Track, and £333 plus VAT on cases which are assigned to band 4 of the Fast Track or allocated to the Intermediate Track.

Determination where parties agree on all issues except costs

Where the parties have reached agreement on all issues except costs, then the receiving party may make an application for those costs to be determined under the new streamlined process. On an issued matter, this will be by way of a Part 23 application as is the current procedure when a fixed costs dispute arises.

On an unissued matter, the application will be made when Part 8 costs only proceedings are commenced pursuant to CPR 46.14.

Applications, whether on issued or unissued matters, should be supported by the written agreement or confirmation, together with a completed Precedent U containing details of the costs or disbursements to which the applicant claims to be entitled and, if applicable, the details of any claim under rule 45.9 (a claim for costs exceeding fixed costs as a result of exceptional circumstances), rule 45.10 (a claim for costs exceeding fixed costs as a result of vulnerability of the Claimant or a witness), or rule 45.13 a claim for costs exceeding fixed costs as a result of unreasonable behaviour).

Any evidence in response from the paying party must be filed within 21 days of service of the application on issued matters, and within 21 days of filing the acknowledgment of service where proceedings have not been started.

The determination may then take place on papers or at a final hearing, but regardless, the fees recoverable will be limited to £500 plus VAT as set out in Table 17 of the soon to be amended Practice Direction 45, plus any relevant application fees.

Appealing outcomes

The Court will record its decision by annotating the Precedent U document and the parties will have 21 days from service of the decision to appeal the outcome. If an application is made, then a hearing will be held to determine the issues, and the applicant must achieve an outcome at least 20% more favourable to them, otherwise they will be liable for the costs of and incidental to the hearing. These costs will, however, be limited again to those outlined in CPR 45.8.

Final key points

Where a party seeks an assessment of costs because of exceptional circumstances, vulnerability, or where the matter settles at S.1 on the Intermediate Track and is a non-PI matter, then the Court has the power to give directions that those costs can be assessed in conjunction with the fixed costs determination.

Part 36 consequences are disapplied from the process.

Discussion

Those of us involved in fixed costs dispute know that currently, the process can be a drawn out, expensive and disproportionate exercise. A streamlined process, designed specifically to deal with what is likely to be largely disbursement disputes is to be welcomed.

It is interesting that the base figure allowed for the process (a maximum of £500), has not been uplifted for inflation, in the same way that those costs tables were. When fees are broken down into hours, the process allows for less than 4 hours of Grade D band 2 time for preparing a statement and written submissions, as well as attempting to agree costs before an application is made. That is not withstanding the fact that submissions in relation to costs exceeding fixed costs can be technically complex and arguably justify the input of more experienced fee earners.

Further limitations on fees recoverable where the Court does not determine costs at the final hearing also seems a harsh added stipulation, with a maximum of £333 recoverable, to include a potential attendance at a hearing.

By disapplying the consequences of Part 36 from the process, there appears to be little by way of incentive for parties to reach agreement. This is exacerbated by the fact that the adverse costs exposure if decisions are unsuccessfully appealed, is limited to less than £400. The provisional assessment process, which currently captures most cases that will proceed through this process after its implementation, removes its cap on recoverable fees when initial outcomes are appealed. A mechanism that operates as a real deterrent for zealous challenges.

As things stand, this new process would not apply to cases to which the fixed costs implemented on 1 October 2023 apply. This seems something which could and perhaps should be rectified prior to the rules coming into effect and requires clarification.

Finally, the interplay between requests for assessment of fees above fixed costs and the new process remain unclear. Whilst it is noted that there is the possibility for both the new process and detailed assessment to run in conjunction, how this will operate is still uncertain.

For further information on the process, or assistance once it is implemented please contact Clarion’s Costs and Litigation Funding Department who can be contacted on any fixed costs issues, at our dedicated fixed costs email address at FRC@clarionsolicitors.com.

Fixed Recoverable Costs – 9 months away?

Andrew McAulayLeave a comment

At the Civil Procedure Rules Committee meeting on 13 May 2022, it was confirmed that the extension of fixed recoverable costs (FRC) is planned for April 2023. Please follow this link for a summary of the meeting which provides updates on other topics as well as FRC.  

FRC for the whole of the fast track and ‘lower reaches’ of the multi-track were first proposed by Lord Woolf during the last century! No progress was made and the topic went stale. Lord Justice Jackson raised FRC in his reports ahead of the LASPO reforms in 2013. Since 2013, progress has been delayed due to Brexit and COVID-19, but the government are now firmly focused on ensuring that the extension of FRC is rolled out. I recently spoke to Dominic Regan who confirmed that he thinks implementation will be April 2023, whereas I am of the view that it will be October 2023.

Regardless of the implementation date, it is important that all law firms who undertake contentious work (with damages under £100,000) start to prepare for implementation. Fees recovered inter partes will be very different, here is an example:

  • Band 2 case under the expanded fast track
  • Pleaded value of £50k but settles for £25k
  • Settles at Stage 5 – Witness Statements and Experts Reports
  • No JSM or Mediation
  • L3 firm instructed (12.5% uplift)
  • Fee would be £9,500 plus 16% of damages (£4,000) plus 12.5%
  • Total = £15,187.50 plus any disbursements and VAT

The fee of £15,187.50 allows circa. 82 hours at £185 per hour (Grade C SCCO GHR for an L3 firm). Remember, the £15,187.50 fee is for the lawyer and Counsel except where Counsel are instructed using one of the ‘bolt-on’ fees. The ‘bolt-on’ fees are not factored into the calculation, but if they were then they would allow no more than £3,250 for external Counsel drafting of statement of case and for a written opinion and/or advising in conference. I suspect £15,187.50 represents grim reading for most litigators and is significantly lower than a litigator would expect to recover inter partes at present for a case with the above assumptions.

The extension of FRC will bring significant change to inter partes costs recovery and create further pressure on solicitor/own client relationships. However, FRC will create opportunities for many law firms but those firms will need to rely on increased economies of scale. Efficiency, efficiency and guess what? Efficiency will be key! The Costs and Litigation Funding team at Clarion has followed the topic of FRC extensively since 2013 and can provide training on the reforms for law firms.

Please do not hesitate to contact Andrew McAulay at andrew.mcaulay@clarionsolicitors.com or on 077645 01252 for further information or Rob Patterson at Robert.Patterson@clarionsolicitors.com or on 07961 875496.

What Fixed Costs can be taken within Court of Protection cases?

Casey McGregorLeave a comment

Practice Direction 19 (b) sets out the fixed costs that may be claimed by solicitors and public authorities acting in Court of Protection proceedings. In line with the Practice Direction, the revised fixed fees for the Court of Protection, effective from 1 December 2017 is as follows:

 Fixed Fee (plus VAT)
Appointment of Financial and Property Deputy£950.00
Appointment of Health and Welfare Deputy£555.00
Appointment of a Trustee£500.00
First General Management Year£1670.00
General Management for the second and subsequent management years£1320.00
Preparation of the Deputyship Report£265.00
Preparation of the basic HMRC income tax return£250.00
Preparation of the complex HMRC income tax return£600.00
ConveyancingA value element of 0.15% of the consideration with a minimum sum of £400.00 and a maximum sum of £1,670.0 plus disbursements.
Interim PaymentsUp to 75% of the WIP incurred

If you take the fixed cost available, you forfeit the right to an assessment later down the line. If you have authority for the assessment of costs in your Order and you will exceed the fixed cost amount, we recommend that you opt for assessment instead as it’s very likely that you’ll recover more than the above amount. Despite several hourly rate changes in recent years, fixed costs have not changed, so they remain at a low level which most practitioners do not consider suitable for their cases.

The link to the Practice Direction can be found at: https://www.judiciary.uk/publications/fixed-costs-in-the-court-of-protection/

If you have any questions, please do not hesitate to contact Casey Mcgregor at casey.mcgregor@clarionsolicitors.com