judgment Archives - Clarion Legal Costs

Where concerns were raised when Trust Corporations apply as a Deputy for the Financial and Property affairs of a Protected Party.

A judgment was issued whereby the courts raised their concerns when considering an application that had been made to appoint a Trust Corporation as a Deputy, for the financial and property affairs of a Protected Party. Judge Hilder informed of the details required for the Court to be satisfied that the corporation is a fit and proper legal person to hold such appointment.

The case involved 36 applicants covering 11 different trust corporations, all of which are connected to solicitor practices.

The proposed Deputy (the Trust Corporation) is a Trust Corporation within the meaning of section 64(1) of the Mental Capacity Act 2005 and can lawfully act as such; and the Trust Corporation will inform the Office of the Public Guardian (OPG) immediately if that ceases to be the case.

The Trust Corporation will comply with the OPG’s published standards for professional deputies.

EITHER:

(i) The Trust Corporation is authorised by the SRA;

(ii) all the directors of the Trust Corporation are solicitors and it employs no one (save to the extent that it employs a company secretary); and

(iii) the Trust Corporation will retain its associated legal practice to carry out all practical work in relation to the management of the incapacitated person’s property and affairs; and

(iv) the Trust Corporation is covered by the professional indemnity insurance policy of its associated authorised legal practice on the same terms as that practice;

The Trust Corporation will notify the OPG immediately, if there is any change to any of the matters set out in paragraph 3 above.

The Trust Corporation must also ensure that it obtains and maintains insurance cover..

The Trust Corporation will lodge a copy of the insurance policy with the OPG on appointment and will inform the OPG immediately if there is any reduction in the terms or level of the insurance cover.

The note offered some explanations as to why a law firm might chose to create a Trust Corporation, these include:

“A Trust Corporation is designed to increase flexibility and improve services for clients. By creating a Trust Corporation, you can streamline the administration of estates and trusts to provide greater flexibility in the day-to-day administration of the files that it handles.”

From the Protected Party’s perspective, the benefits of appointing a Trust Corporation include:

1. Continuity – new trustees are never needed as a Trust Corporation never dies, goes on holiday, gets ill or retires. This can create substantial savings in professional fees: each time an individual trustee retires and a new trustee appointed, a deed needs to be created and the assets of the trust have to be transferred, whereas with a Trust Corporation, the appointment and retirement of directors will not affect the assets within particular trusts.

2. Availability – individual trustees aren’t always available due to holidays and other commitments, but a Trust Corporation will always be available.

3. Professionalism – Trust Corporation signatories will be senior members of the private client department of the firm who deal with trusts and estates every day.”

These identified benefits are procedural or financial. Whilst these are important, they are not the only aspects to consider. It was explained in the judgment that “each case will be different but Deputyships generally also require an appropriate person-to-person interaction with the protected person and often their family. Considered from that perspective, it can be seen that the benefit of continuity accrues also to the law firm – a client is retained for the long term, even if the individuals familiar with the case change firms.”

Conclusion

A Trust Corporation can apply to be on the Office of the Public Guardian’s panel of deputies, but there is no ‘panel’ of Trust Corporations which have demonstrated compliance with legal requirements to act. Information necessary to satisfy the Court as to suitability must therefore be ’built into’ the application process itself.”

If you have any queries, please do not hesitate to contact Georgia Clarke (georgia.clarke@clarionsolicitors.com) or the team at COPCosts@clarionsolicitors.com.

It’s a case that everyone has being waiting for and it proved to be fairly anti-climatic in the end. For those who want to refresh their memories we wrote an extensive article on the background of the Coventry case which you can read by clicking here.

The full Judgment of Coventry -v- Lawrence [2015] UKSC 50 was published yesterday confirmed that nothing will change and that the recovery of additional liabilities did not breach the European Convention on Human Rights. The Supreme Court commented as follows:

“The scheme as a whole was a rational and coherent scheme for providing access to justice to those to whom it would probably otherwise have been denied. It was subject to certain safeguards. The government was entitled to a considerable area of discretionary judgment in choosing the scheme that it considered would strike the right balance between the interests of appellants and respondents whilst at the same time securing access to justice to those who would previously have qualified for legal aid. It had to find a solution to the problem created by the withdrawal of legal aid. The government has now produced three different schemes. Each was produced after wide consultation. Each has generated considerable criticism. As already indicated, once civil legal aid was constrained to the extent that it was in 1999, it became impossible to come up with a solution which would meet with universal approval. This is relevant to the question whether the 1999 Act scheme struck a fair balance between the interests of different litigants.”

This should put to bed any arguments over the recoverability of any success fee / ATE Premium on pre-Jackson cases. The outcome shouldn’t come as a big surprise to lawyers. Notably Lord Mance stated as follows;

In the above circumstances, I reject the respondents’ challenge to the system of costs whereby they are potentially liable in respect of success fees agreed and ATE premium incurred by the appellants. The position must, as Lord Neuberger and Lord Dyson have said, be considered as a whole. The system had a legitimate aim, the present is on its face an extreme and unusual case. It is difficult to conceive of any solution which would cater for such cases, without imperilling the whole system. The system has been repeatedly endorsed by domestic courts over a decade. Litigants and their lawyers have justifiably relied upon its validity.

The Judgment prevents any complications for Claimants seeking to recover a success fee and also prevents a hefty bill for the UK government who could have found themselves having to remedy the success fees and ATE Premiums already paid and to be paid as part of on-going pre-Jackson cases.

The Supreme Court invariably made the right decision but what Coventry has done is to place in everybody’s mind the disproportionate nature of the old costs regime and only seeks to reinforce the importance of costs management (and perhaps even the extension of fixed fees) in the years to come. I end this article the same as I ended my previous analysis of this case and it is one of Lord Neuberger’s original comments that has stuck with me the most;

“The fact that it can cost two citizens £400,000 in legal fees and disbursements to establish and enforce their right to live in peace in their home is on any view highly regrettable. The point is reinforced when one takes into account the value of their home,

which is less than £300,000 (coupled with the effect of the nuisance on that value,

£74,000 at the most)

[…]

These figures are very disturbing.”

Regardless of the judgment yesterday, one thing is clear, the figures are very disturbing indeed.

Do you agree with the Supreme Court’s decision? Let us know in the comments below.

Clarion Legal Costs

Tag: judgment

Various Incapacitated Persons, Re (Appointment of Trust Corporations As Deputies) [2018] EWCOP 3

Coventry v Lawrence – The Outcome