Tag: legalcosts

Updated practice guidance released by the OPG and SCCO – an important reference point for professional deputies!

Ella WilkinsonLeave a comment

On 28 May 2025, the good practice guidance previously issued by the Office of the Public Guardian (OPG) and the Senior Courts Costs Office (SCCO) was updated. This guidance exists to assist professional deputies in respect of their costs estimates, preparing and submitting bills for assessment and in understanding what work can be claimed and recovered. The vast majority of the contents remain similar to the original guidance released by the OPG and SCCO dating back to 2016 in respect of the expectations from professional deputies in regards to general good practice and the SCCO’s approach to assessment, however more recent developments have now been factored in such as the use of the E-bill and the CE File system, the case of ACC and Others, the latest stance regarding post death costs and the increased hardship threshold.

This blog summarises the key points raised, to ensure that professional deputies continue act in P’s best interests and comply with the requirements of the OPG, SCCO and Court of Protection. Importantly, the guidance issued is not intended to replace existing provisions such as the relevant Civil Procedure Rules, Practice Direction 19B (supplementing Part 19 of the Court of Protection Rules 2017), the Mental Capacity Act (2005) Code of Practice, and the OPG professional deputy standards.

Principles of Good Practice

Professional deputies are entitled to claim reasonable and proportionate costs. Key expectations include:

  • Aligning costs with the value of P’s estate and the work involved
  • Delegating tasks to appropriately graded staff
  • Acting transparently and always in P’s best interests
  • Evaluating whether their continued role remains necessary as P’s situation stabilizes
  • Where deemed appropriate, deputies should be open and transparent about their charges with P’s relatives

Deputies who fail to follow this guidance may need to justify their decisions, and the OPG may take action, including applications to remove a deputy where concerns arise.

Costs Estimates

  • The OPG105 must be submitted with the annual deputyship report, and in most cases it should take no more than 30 minutes to complete
  • If billed costs exceed the original costs estimate by 20% or more, deputies must explain the discrepancy
  • Significant changes in P’s circumstances should be reported to the OPG if they will impact costs

Assessment of General Management Costs

The SCCO’s role is to assess whether claimed costs are reasonable and proportionate. Their key considerations include:

  • Hourly Rates: these must generally align with the relevant SCCO Guideline Hourly Rates (except in the most exceptional circumstances)
  • Delegation: routine tasks, such as arranging payments or bank reconciliations, should be completed by administrative staff or Grade D fee earners at best. In addition, when reviewing time claimed for delegation, the SCCO will consider if the time clamed was reasonable, proportionate, progressive and that it serves to reduce costs
  • Home Visits & Contact: usually, only one home visit per year is allowed unless justified
  • Welfare Work: these cannot be claimed under property and affairs general management costs unless the Court of Protection gives permission
  • Overheads: routine supervision, internal communication, and basic administrative tasks are considered overheads and are not generally not recoverable
  • Payment of Bills: three minutes will be allowed for payments per instance, and no further time is usually allowed for amending records to reflect payments made or advising a party of a payment processed to them
  • Financial Beauty Parades: generally, only one senior fee earner will be allowed on assessment for attending these meetings
  • File Notes: if no or little documentary evidence is supplied in support of the bill and/or particular items of work claimed, it is likely that the SCCO will disallow the costs claimed
  • Litigation Costs: the SCCO will disallow costs which could be claimed within the context of ongoing litigation
  • Draftsman’s Fees: a Grade D rate will be allowed for the preparation of bills of costs, unless in exceptional circumstances

ACC & Others Judgment

Where work falls outside of the scope of general authority for the management of P’s property and financial affairs, a professional deputy may need to apply for further authority in respect of this work and the associated costs as per ACC & Others. The full judgment can be seen here: ACC & Ors ( property and affairs deputy ; recovering assets costs for legal proceedings) – Find Case Law – The National Archives, and we have also previously prepared a blog summarising this and the practical implications for deputies which can be found here: ACC & Others – A Useful Recap – Clarion Legal Costs

Submissions of Bills of Costs & Supporting Documentation

  • Bills of costs should ideally be submitted annually for assessment, as close to the end of the management year as possible
  • Bills covering less than a year can be submitted where there has been a transfer of deputyship and the deputy intends to realign the management period dates with the new order. If this transfer is internal within the same firm, such bills must span at least six months of work unless in exceptional circumstances
  • Bills must be submitted via CE file, and can either be the traditional bills of costs set out under Practice Direction 47 CPR Part 47, or in the newer E-Bill format
  • The short form bill format is required where costs claimed are under £3,000.00 (excluding VAT and any disbursements claimed)
  • Supporting documents submitted alongside the bill should include the OPG105, deputyship report (OPG102/103), any relevant Orders made by the Court of Protection providing authority for work falling outside of the general authority, as well as evidence in support of the hourly rates claimed (client care paperwork)

Post-Death Costs and Hardship

On P’s death, the deputyship will come to an end and the jurisdiction of the Court of Protection will cease. Costs incurred post-death are not assessable by the SCCO. The deputyship order however will continue to authorise detailed assessment of costs incurred during P’s lifetime, if these cannot be agreed with the executor of the estate. If the professional deputy is also appointed as executor, a potential conflict of interest arises and a bill of costs should be submitted to the SCCO for assessment.

Where P’s estate has a value of less than £20,300.00, deputies must follow specific directions set out under Practice Direction 19B with regards to hardship. This states that in such circumstances, ‘the professional deputy for property and affairs is not permitted to apply for assessed costs; instead they may take an annual management fee not exceeding 4.5% of P’s net assets on the anniversary of the court order appointing the professional as deputy’.

Summary

The guidance aims to encourage fairness, consistency, and clarity in the way the costs of professional deputies are managed and assessed. For deputies, it reinforces the importance of transparency, efficiency, and the diligent management of P’s affairs.

Professional deputies are urged to familiarise and refresh themselves with the full guidance and relevant existing provisions to ensure that they continue to act in line with best practice expectations and requirements.

If you would like to review the guidance in full, this can be found at: Professional Deputy Costs – GOV.UK

Costs Budgeting Reform Gains Momentum

Anna LockyerLeave a comment

Flexible budgeting recommendations made by the CJC’s report of May last year have been accepted by the Master of the Rolls and more recently discussed at last month’s CPRC meeting.

Key points:

  • A new Precedent H costs form has been proposed, modelled on the existing Precedent H
  • A draft new Practice Direction includes budgeting claims with a value of over £10m
  • A draft pilot Practice Direction provides for 5 categories of case, each limited in certain courts:

– Business & Property Courts (BPC) claims with a value of £1m or more;

– BPC claims with a value of less than £1m;

– Qualified One-Way Costs (QOCS) claims;

– Non-QOCS claims; and

– Certain other non-BPC claims.

It was agreed in principle that each case category may have its own Practice Direction and the implementation dates need not be the same.

Watch this space for further updates…

New update from SCCO on delays with COP assessments

Ella WilkinsonLeave a comment

This evening, the SCCO have circulated a further update notice on the current timescales for the assessment of COP bills.

In summary:

  • The Costs Officers are being assigned bills for assessment for cases where the supporting papers were received during or after the 2nd week of October
  • The Administrative Team are returning assessed bills received from the Costs Officers around the middle of March
  • New bill filings submitted in the 3rd week of February are being considered for acceptance or rejection
  • Filings requesting final costs certificates submitted in the 2nd week of April are currently being worked through

Please see below a full copy of the notice released for the full details.

Notice-to-COP-customers-19-April-2022-SCCO-1Download

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

“Exceptionally large increases” to solicitors hourly rates lead to a finding of special circumstances

Robert PattersonLeave a comment

Under the Solicitors Act 1974, a client only has an absolute right to an assessment of a solicitor’s bill if an application is made within one month of receiving the bill. While an assessment can still be ordered where the bill is unpaid 12 months of receipt of the bill, once those 12 months have expired, the client must demonstrate that there are special circumstances before an assessment can be ordered.

In Raydens Ltd v Ms Julie Cole [2021] EWHC B14 (Costs), the defendant asked the court to make a finding of special circumstances based on the adequacy of costs estimates, billing irregularities and unilateral increases to hourly rates.

The merits of the defendant’s case on cost estimates and billing irregularities were not considered, as those issues represented a new case not addressed in witness evidence. The issue of increases to hourly rates did, however, result in a finding of special circumstances.

The claimant represented the defendant in matrimonial proceedings from 2013 until 2018. The engagement letter provided for hourly rates to be reviewed at the beginning of April each year. The claim was conducted by a partner and a junior assistant. Between 2014 and 2017, the partner’s rate increased from £245/hr to £320/hr and the junior assistant’s rate increased from £100/hr to £165/hr.

In making a finding of special circumstances, the Master found that the increased hourly rates were presented to the defendant as a fait accompli and if there was an explanation to justify the increases, it was not given to the defendant. The Master also considered that there must be an issue about informed approval by the defendant of the hourly rate increases.

The fact that the contract of retainer provided for increased hourly rates and the claimant had communicated those to the defendant in accordance with their contractual obligations, does not seem to have been enough in this case defend the application for assessment.

This article originally appeared in our August 2021 Newsletter which can be found here.

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

New guidance from the SCCO on electronic supporting files in COP cases

Ella WilkinsonLeave a comment

We have received updated guidance from the SCCO on the process for uploading electronic supporting documents for Court of Protection assessments via the DUC [Document Upload Centre]. Please note that the use of this is not compulsory, and that hard copy files can still be submitted as usual.

Is CE-File still relevant?

As per the current procedure, the Bill of Costs, N258B and Court Order providing authority for the assessment will still need to be e-filed via the CE-File system in place, however the electronic supporting papers cannot be uploaded via this system, and will not be accepted by the SCCO.

Can you use the DUC system for only select cases, or do you need to use it for all matters?

The DUC system needs to be used to submit any electronic supporting papers following receipt of the e-filing acceptance notification (as currently, you have 28 days following receipt of this to provide your papers, whether electronically or in hard copy). This can be used for all of your bills to be assessed, or can also be used on a selective basis, where you wish to provide electronic files in some cases, but hard copy papers in others.  

If you intend to use the DUC system for all of your matters, then you will need to email Costs Officer Leggett at Christine.leggett@justice.gov.uk, providing details of the email address to be linked as a user to the DUC, with a request to be added as a permanent DUC user. Once confirmation of this status has been received, you will not need to inform the SCCO every time you wish to submit electronic supporting papers via the DUC.

If you are not registered as a permanent DUC user, then the presumption of the SCCO is that they will receive physical files in the post/DX from you. If you do decide to make use of the DUC on a bill, then a comment should be left in the filing comments section when submitting the bill via CE-File, clearly stating your intention to submit the supporting papers electronically via the DUC. Not doing so could cause delays in your assessment, if the clerk reviewing the e-filing request is not aware that the files are to be submitted electronically.

How should electronic supporting papers be formatted?

Guidance was also provided as to how electronic supporting papers should be presented, summarised in the below points:

  • Files should run in chronological, from oldest to newest
  • Copies of the OPG102, OPG105, client care information and any disbursement invoices or Counsels’ fee notes should be included at the start of the files
  • The file should be named as the SCCO case reference, the Protected Party’s surname, and the dates of the general management period if relevant
  • It is preferable that there is an index, including hyperlinks
  • If more than one file of papers is uploaded, each should be clearly labelled with the SCCO reference number, the number of the file (e.g file 2), and the period of work which the file covers

Can you use the DUC for a matter you have already e-filed?

If a case has already been e-filed via CE-File and the acceptance notification received however you decide that you would like to submit your papers electronically, you will need to contact scco@justice.gov.uk, informing the SCCO that you wish to now provide electronic files, and providing the 18 digit submission number from your e-filing acceptance notification.

How do you register to use the DUC?

In order to register, you can contact Christine.leggett@justice.gov.uk, confirming the email address to be registered on the system. A response will then be provided outlining the next steps to progress the sign up.

You can find the full guidance issued by the SCCO on the below PDF document:

Senior-Courts-Costs-office-guidance-for-Court-of-Protection-Bills-and-the-Document-Upload-Centre-2Download

Ella Wilkinson is a Legal Apprentice in the Costs & Litigation Funding Team at Clarion. You can contact her on 0113 288 5693, or by email to ella.wilkinson@clarionsolicitors.com

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

PLK and Others: What we know now…

Ella WilkinsonLeave a comment

On 30 September 2020, a judgment was handed down by Master Whalan following a hearing in the matter of PLK and Others on 26 May 2020.

This case was brought by a number of professional Deputies, to bring the issue as to the guideline hourly rates not being altered for 10 years, despite factors such as inflation and an ever increasing workload raising questions as to the sustainability of Court of Protection work for many practitioners. The Costs Team at Clarion prepared the four bills of costs concerned, in which rates with an uplift of approximately 31% of the guideline rates were claimed, to reflect RPI inflation.

The outcome of this hearing was that ‘if the hourly rates claimed fall within approximately 120% of the 2010 GHR, then they should be regarded as being prima facie reasonable’. Master Whalan summarised that the new rates could be applied to all outstanding assessments, irrespective of the year in which the work was undertaken.

Since then, the SCCO have released further guidance by way of a Practise Note. The main points to note from this are:

  • The uplifted rates can be applied only to work undertaken in 2018 or after, and that the judgment does not disapply the indemnity principle. As a result, where a retainer letter limits the hourly rates for conducting fee earners specifically to the 2010 guideline rates, the Costs Officers will not allow firms to claim for the uplifted rates.
  • Deputies cannot withdraw or amend bills already submitted without further authority from the Court.
  • Deputies can make an informal request for reassessment, however that if this is done for the sole purpose of seeking the uplifted rates, that the request for reconsideration will likely be unsuccessful
  • Deputies should take into account their terms of business and OPG105 estimate when considering applying the new rates, as the Costs Officer’s will keep these under consideration when conducting assessments

Since the judgment was handed down, we have applied the uplifted rates to the majority of bills prepared on behalf of our clients, however have recently received a number of assessments back from the SCCO, whereby the rates claimed have been reduced back to the 2010 guideline rates on each occasion. The Costs Officer has stated on these bills that ‘the Deputy under the indemnity principle could not expect to apply new rates to old work’, and that ‘the Solicitor cannot expect to apply new rates to old work that they did not expect to achieve when doing the work’.

The comments of the SCCO are extremely frustrating for deputies who are not breaching the indemnity principle when claiming the higher rates. We recommend that if your costs are limited on assessment to the 2010 rates for retrospective claims for costs, that you submit your retainer letter and terms of business for the attention of the Costs Officer to support that you are entitled to recover rates in excess of the old 2010 rates.

The view of the Costs Officers is contradictory to the judgment and deputies should work with their costs provider to try to recover the higher rates where there is no breach of the indemnity principle. 

Ella Wilkinson is a Legal Apprentice in the Costs & Litigation Funding Team at Clarion. You can contact her on 0113 288 5693, or by email to ella.wilkinson@clarionsolicitors.com

Does P have capacity to make decisions as to his care, support and education?

Ella WilkinsonLeave a comment

In the recent case of ‘A Local Authority v GP (Capacity – Care, Support and Education) [2020] EWCOP 56’, an application was brought by a Local Authority in respect of P’s capacity to make decisions as to his care, support and education.

By way of background, P is a 19-year-old man with a diagnosis of autism, who also suffers from anxiety and severe learning difficulties.

Following P stopping attending his placement at a specialist school, concerns were raised by the Local Authority as to P’s access to the community and engagement in activities. The feeling was that P required targeted support to develop his social skills, and to prevent him from becoming isolated.

A hearing was listed to assess whether he had capacity to make decisions such as accepting or refusing care, education and support. The Local Authority requested interim declarations stating that P lacked the capacity to refuse an assessment of his care needs (pursuant to s11 Care Act 2014), to make decisions as to his care and support needs (pursuant to s9 Care Act 2014), to request or refuse an assessment of his education and health needs for the purposes of an EHC plan (pursuant to S36{1} Children and Families Act 2014), and to make decisions as to his education and health needs (pursuant to the Children and Families Act 2014).

The conclusion was that P did not have the required capacity to make decisions as to his care, support and education, as P could not understand and weigh up the relevant information.

Ella Wilkinson is a Legal Apprentice in the Costs & Litigation Funding Department at Clarion. You can contact her on 0113 288 5693, or by email to ella.wilkinson@clarionsolicitors.com

Update your CFAs now: decision may make thousands unenforceable

Joanne ChaseLeave a comment

The outcome of Belsner v Cam Legal Services Limited [2020] EWHC 2755 (QB) is critically important to lawyers specialising in RTA and EL/PL work subject to fixed costs and will have an immediate effect. However, the consequences may be much more far-reaching, and any lawyer undertaking CFA work would be well-advised to consider whether their terms require amendment.

Background

On 5 February 2016 the claimant, Ms Belsner, was a pillion passenger when the motorbike she was riding was involved in a collision. Following the accident, she instructed the defendant, a law firm, to pursue damages. The defendant offered to act under CFA terms and sent a client care letter which set out the basis on which they would charge her. The relevant details of the CFA are contained at paragraphs 9 to 16 of the judgment. However, importantly (as noted at para 15) “none of the documents provided for an overall cap on the amount recoverable by the defendant from the claimant…”

The defendant did not advise Ms Belsner of the value of her claim, but completed a risk assessment which indicated that the defendant considered the likely value of the matter was less than £2,000.

Matters progressed and the insurer settled Ms Belsner’s claim for £1,916.98 damages, plus fixed costs and disbursements totalling £1,783.48. The defendant then paid on to Ms Belsner the sum of £1,531.48 (the amount of damages less £385.50 in respect of the success fee) but did not send a bill of costs or invoice.

Ms Belsner instructed Checkmylegalfees.com Limited and on 10 May 2018 a claim form was issued seeking an order for delivery of a statute bill. The defendant served a statute bill on 24 May 2018 which totalled £4,306.07 comprising:-

  1. Basic Charges of £2,171.90 plus VAT
  2. 100% success fee capped at 25% damages of £385.50 plus VAT
  3. GP Report of £225 plus VAT
  4. Psychology report of £806 plus VAT
  5. Total £3,588.40 plus VAT

On the defendant’s case therefore, it had been entitled to charge the claimant £4,306.07, which would have left her £605.90 out of pocket. The defendant had therefore chosen not to charge the whole of the fees they were strictly entitled to, and instead charged only the sum of £2,168.98, being the fixed costs recovered plus the success fee.

The court subsequently carried out a provisional (on paper) assessment and at first instance held that the claimant had not given “informed consent” as required by CPR 46.9(2), and on this basis limited to the basic charges to the £500 plus VAT being the amount actually paid in respect of costs by the insurer relating to costs. The court also reduced the success fee from 100% to 15%. Commenting on whether informed consent had been given, District Judge Bellamy said “given the differences in hourly rates and the lack of detailed explanation of the various costs scenarios it is hard to see how informed consent could be given”.

At a subsequent oral hearing the defendant argued that the CFA was sufficiently clear that the amount they could charge were not limited, and that accordingly it was clear that circumstances could arise in which the claimant would have to pay more than they recovered from the opponent. The Claimant argued that it was not sufficiently clear, and that in order to give express permission she should have been given enough information to balance the likely liability with the likely recovery.

Ultimately, the court assessed the defendant’s costs in the sum of £1,392 plus VAT for base costs and £208.80 plus VAT for the success fee.

As such, the Court held that the defendant was entitled to:-

  1. Base Costs: £1,392 plus VAT
  2. Success Fee: £208.80 plus VAT
  3. GP Fee: £255 plus VAT
  4. Psychology report fee: £806 plus VAT
  5. Total £2,661.80 plus VAT

However, in total Ms Belsner had only ever paid £2,168.98 because the defendant had only charged the amount recovered from the defendant plus the success fee. As such, the provisional assessment did not result in any financial recovery for Ms Belsner.

The Appeal

Ms Belsner appealed the decision on the basis that she had not given “informed consent” to the agreement that she would (or could) pay more to her solicitor than the amount recovered from her opponent in the court proceedings.

Summary of Decisions

  1. The fact that the defendant had not sought to charge everything it was entitled to was not relevant; it was not a part of the agreement.
  2. Had Ms Belsner been provided with sufficient information about the likely damages and the likely costs recoverable from her opponent, it might have affected her decision to enter into the CFA.
  3. The general terms used by the defendant in its CFA were not sufficiently clear to enable Ms Belsner to understand that she might end up with a shortfall.
  4. This case was distinguishable from Herbert v HH Law [2019] EWCA Civ 527 because in Herbert the solicitor had stated in the CFA that the amount recoverable from the client was capped at 25% of damages. There was no such limitation in this case.
  5. As a result of the above findings, Ms Belsner did not give her informed consent to enter into the CFA and it was therefore unenforceable unenforceable to the extent it required the client to pay more than was actually recovered from her opponent.

Protecting Yourself

All lawyers practicing in cases subject to fixed costs, including EL/PL and RTA, as well as those acting in Intellectual Property subject to scale costs and tribunals which may be subject to specialist costs regimes should urgently review their CFAs and ensure that they:-

  1. Make clear that the client may be charged more than they could recover from their opponent; and
  2. Include a cap on the amount which will be taken from damages in the event of success as in Herbert; or
  3. Provide an estimate of the level of damages which the client can expect to recover (and this should be bespoke to each case) and set out the details if what costs are recoverable from an opponent under Part 45. This could be as simple as including tables 6B / 6C / 6D (and the relevant tables for “portal” costs) within a schedule to the CFA.

Of course, if the CFA is not compliant then it will be necessary to take remedial action in relation to ongoing cases. It may be sufficient to send a letter to your clients providing (1) an estimate of their damages, and (2) details of what they may recover from the opponent. It may then be possible to argue that by continuing to provide instructions they have given their “informed consent” to proceed on that basis. However, it may be necessary to go further and give the client an option to terminate. It is also possible that, were it to “get out” that such a letter had been sent, it may put firms which specialise in recovering legal fees for consumers on notice of a potential goldmine of cases.

Therefore, if you find yourself in this position, you should seek advice as soon as possible to protect yourself from potential future claims.

Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com

Part 36 – is it unjust to award CPR 36 consequences when the defendant does not have the money to pay? (Rawbank -v- Travelex)

Joanne Chase1 Comment

This article supplements and updates one titled Consequences of Beating a Part 36 Offer: Injustice published on 12 June 2019.

The case of Rawbank SA -v- Travelex Banknotes Limited [2020] EWHC 1619 (Ch) related to a contract that the Defendant would provide banknotes totalling in excess of $40 million to the Claimant. Due to the Coronavirus pandemic the Defendant was suffering from financial difficulties such that it could not fulfil its contract with the Claimant, and required restructuring. However, the Defendant had no defence to the claim, it was simply unable to fulfil its contractual obligations. Judgment was entered against the Defendant which was more advantageous to the Claimant than the terms of a Part 36 offer the Claimant had made.

Giving judgment in relation to the consequences of CPR 36, the Court allowed some of the consequences under CPR 36.17(4), but declined to allow an “additional amount” as provided for by CPR 36.17(4)(d). This decision reinforces a number of previous judgments in relation to the application of Part 36.17, specifically:-

  1. That the Court may adopt a cherry-picking approach and allow some of the consequences of CPR 36.17(4) but not others; and
  2. The court does not have discretion to award an “additional amount” at a rate other than 10% – it is all or nothing,

What is interesting about this case, however, is why the judge declined to make the award of the additional amount.

The Part 36 offer was made on terms that “the Defendant paid £48,290,000 within 14 days of accepting the offer…” At paragraphs 35 – 37 of the judgment, Zacaroli J held that “…acceptance of the Part 36 offer could only be made by actually paying the sum referred to in it…” and that because the Defendant was insolvent, “…it would be unjust to make at least some of the orders identified in Rule 36.17(4)”. The Court effectively found that because the Defendant did not have the money to pay the settlement sum, it could not have accepted the offer, and furthermore the fact of the Defendant’s impecuniosity meant that it would unjust to award the additional amount set out in CPR 36.17(4)(d).

In summary: a party’s financial position is a relevant consideration when considering the injustice test.

This decision appears to contradict, at least in part, the earlier authority of  Cashman -v- Mid Essex Hospital Services NHS Trust [2015] EWHC 1312 (QB), in which it was held that the court cannot take into account the amount of the additional amount when considering the test on injustice. It is a logical extension of that principle that the fact of a defendant’s ability or inability to pay is not a relevant consideration for the court to consider.

Furthermore, the judge appears to have erred in finding that the Part 36 offer ” could only be [accepted] by paying the sums referred to in it…” as CPR 36.14(7) provides that if the settlement sum “is not paid within 14 days of acceptance of the offer… the claimant may enter judgment for the unpaid sum”. It is plainly wrong to say that a party which accepts a Part 36 offer will then be bound to prioritise payment of the settlement sum above secured creditors (as was suggested at paragraph 35 of the judgment); the defendant will simply become liable to pay the amount of the settlement sum. If the defendant does not do so, then the claimant will be entitled to enter judgment. That judgment will be an unsecured debt and will be dealt with in an insolvency in accordance with the usual order of priority.

This decision appears to be a departure from previous authority and raises some significant uncertainty surrounding the meaning of “injustice” in the context of CPR 36.17, which many lawyers had hoped had been settled by a number of judgments in 2018 and 2019. It remains to be seen whether Rawbank will set a new standard by which the test of injustice is measured, or whether future courts will distinguish the case on the basis of its somewhat unique factual background. In either case, it can only be hoped that a case will find its way to a higher court to give some clarity on the question of what precisely “injustice” is.

Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com

What is classed as a net-asset?

Stephanie KayeLeave a comment

Following the case of Penntrust Ltd v West Berkshire District Council & Anor 2020, the ambiguity of whether property is classed as a net-asset when considering a Protected Party’s estate was clarified.

For the purpose of context, the Applicant was appointed as the Protected Party’s Deputy in October 2014 in relation to property and financial affairs.

In January 2019, an Application was made to discharge the of professional Deputy. The Deputy sought the authority for detailed costs assessment by the Senior Courts Costs Office for the work conducted to the date of discharge, even though the asset value (according to PD19B) was below £16,000, because the Protected Party’s property – valued in excess of £300,000 – was disregarded

The Deputyship Order in which the Applicant wished to rely upon contained authority that stated ‘The Deputy is entitled to fixed costs in relation to their application and to receive fixed costs or the general management of affairs of the Protected Party. If the Deputy would prefer the costs to be assessed, the order is to be treated as authority to the Senior Courts Cost Office to carry out a detailed assessment on the standard basis’.

The Protected Party’s liquid assets were substantially less than the £16,000 requirement for costs to be assessed and therefore only provided the Applicant with the fixed costs provision under Practice Direction 19B. It was imperative for costing purposes that the Protected Party’s property that they lived in be established as an asset to increase the asset worth, in order for the Applicant to seek detailed assessment and recover costs incurred throughout the management periods. Ordinarily, the property would be disregarded if the Protected Party or a dependent lived there.

Following the hearing, it was concluded that the term ‘net-assets’ in PD19B effective from April 2017, falls to be interpreted according to the ordinary meaning of the phrase, ‘total assets minus total liabilities’. This meant that the Protected Party’s property would be included within net-assets which resulted in the £16,000 threshold being exceeded, allowing for detailed assessment. It was also noted the Protected Party’s occupation of the property did not exclude it from quantification of assets in this case.

Following this inclusion of the property, the Applicant had sufficient authority to seek detailed assessment from the Senior Courts Costs Office.

In cases where fixed costs are not appropriate, professionals may apply to the Court for clarification if their order gives them authority for a detailed assessment of costs. However, it is noted that the use of fixed costs is still encouraged by the Courts. The provision of the £16,000 threshold does continue to apply if the net-assets of a Protected Party are below the specified amount.

It is positive that the Court recognised that it is not always appropriate to disregard the property as an asset and this case enables Deputies to apply to amend their Order allowing the property to be included as an asset, regardless of whether the Protected Party or a dependent lives there.