All you need to know about Counsel’s Fees in COP – How are they assessed?

Deputyship management is not always plain sailing, and on occasions, professional Deputies may be instructed to take on a case whereby the background is complicated, the circumstances are unusual and where Counsel are required to progress the matter. We have investigated the general rules applied when Counsel’s’ fees are to be assessed, and here is everything you need to know.

On what basis are the reductions made?

Firstly, it is important to recognise that in Deputyship matters, all costs are open for assessment. When a Deputyship Order is issued, it provides the authority for the professionals involved in the case to have their costs assessed. This includes the Professional Deputy, Counsel and in some instances, if a translator is required, their costs would also be subject to assessment.

What do the SCCO look at when deciding whether Counsel’s fees should be allowed?

Following a conversation with an experienced Costs Officer, advice was obtained regarding what aspects they consider when reviewing Counsel’s fees, once a bill of costs had been submitted for assessment. As there are no clear “black and white” guidelines for the assessment of Counsel’s fees, the Costs Officers are able to use their discretion on a case by case basis to review what would be a reasonable and proportionate amount to allow. Approximately, £300.00 per hour is allowed for a hearing, and £250.00 per hour for general work, however based on the complexity, volume of work undertaken, geographical location of Counsel and the breakdown of work outlined on Counsel’s fee note, these hourly rates could be revised by the Costs Officer.

It is important to note that it is your responsibility to work with your costs provider to include a detailed narrative within the Bill of Costs, explaining and justifying Counsel’s fees and involvement. For example, the Costs Officer would question why a Leeds based firm would instruct a London based Counsel. Details of the facts of the case, any hearings that have taken place, and the necessity of the work conducted should be included within the bill. Furthermore, when the bill is submitted for assessment, a Counsel’s fee note should be provided with the Bill of Costs. A further point to take into account is that not all Counsel’s fee notes are detailed enough, and therefore this increases the importance of including information relating to the complexity and background of the case when preparing the Bill of Costs.

A general understanding is that if Counsel had claimed for overall “refreshing themselves on the case” as they have not worked on the matter for a prolonged period of time this would not be allowed upon assessment as it would be deemed disproportionate and unreasonable.

Are the Deputyship firm expected to cover the reductions?

Counsel and professional Deputies are both aware that their costs are to be assessed and therefore, they are also aware that their costs could be reduced upon assessment. It is recommended for Counsel and the professional Deputy to make an agreement before the Bill of Costs is sent for assessment, whether the Deputy’s firm would cover the shortfall if reductions are made, or Counsel agrees to refund the reductions. Secondly, it was advised to wait until the Bill of Costs has been assessed before settling Counsel’s fees.

Do Counsel have a right to dispute the reductions?

If Counsel’s fees have been reduced upon assessment, they have a right to dispute the decision. This would be done in the format of a Request for Reassessment, prepared by your costs provider, outlining the reasons why you disagree with the reductions made and evidence in support of this.

It is noteworthy that Counsel are considered to be an “interested party” and therefore the professional Deputy would have to serve a copy of the provisionally assessed Bill of Costs on Counsel, and receive confirmation that they accept the amount allowed before the SCCO will issue the Final Costs Certificate, which provides authority for the Deputy and Counsel to be paid.

If you have any queries, or require any further information then please do not hesitate to contact Georgia Clarke at georgia.clarke@clarionsolicitors.com

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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.

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

 

How Valuable is the Protected Party’s Estate?

The proportionality test is being applied to Court of Protection matters. In our experience the Senior Courts Costs Office (SCCO) are adopting a harsher stance on assessment and in light of this, we are continually adopting new approaches to increase the recoverability of the Deputy’s costs and ensure an ever improving service.

Our experience has shown that the SCCO assess bills more favourably when the details of the Protected Party’s estate are provided. Such information includes; details of assets and liabilities, value of any property and any settlement monies received. We believe that the Costs Officer uses this information to determine whether the Deputy’s costs are reasonable and proportionate to the Protected Party’s estate. For example, it would not be reasonable and proportionate to claim costs of £20,000.00 if the Protected Party’s estate is worth only £18,000.00.

By providing the SCCO with this additional information, this may increase the recoverability of your costs. We are not suggesting that you provide an in depth breakdown of the Protected Party’s estate however an approximate figure in terms of the overall value would help to justify the costs claimed.

If you require any further advice or assistance in relation to this blog or Court of Protection costs, please do not hesitate to contact Julianne Brown (julianne.brown@clarionsolicitors.com and 0113 336 3320) or the Clarion Costs Team on 0113 246 0622.

The Future of Guideline Hourly Rates and the Extension of Fixed Fees

It has been announced that the SCCO Guideline Hourly Rates (GHR) are to be frozen at the 2010 levels indefinitely after the Master of Rolls decided that the evidence required to change them would not be produced.

Perhaps, concerning for some is Lord Dyson’s comments that he would instead continue to press the government to extend the use of fixed fees.

Following a year-long study by the Civil Justice Council’s costs committee which concluded in July last year, Lord Dyson stated that there was a “fundamental” shortcoming in the evidence available to amend the GHR. He added that he would seek “urgent discussions” with the Law Society and the government to see what steps could be taken to obtain more.

Lord Dyson said last week that: “these discussions… have not made any material change to the position I was placed in last July – there is no funding available from any source for undertaking the sort of in-depth survey which the Civil Justice Council’s costs committee and its expert advisers consider is required to produce an adequate evidence base.

“There is also considerable doubt that even if such funds were forthcoming there would be sufficient numbers of firms willing to participate and provide the level of detailed data required to enable the committee (and in turn myself) to produce accurate and reasonable GHRs.”

Lord Dyson observed that the GHRs are becoming “less and less relevant” particularly given the judiciary’s use of proportionality as a driving principle in assessing costs, and the greater application of costs budgeting. The full effect of the new proportionality test under CPR 44.3 is only just beginning to bite for many.

He added: “Not least, I hope […] is a trend towards the greater use of fixed costs in litigation. I have long advocated their wider application, and will continue to press this point to ministers and others in the hope that this important element of the Jackson reforms is implemented.”

Lord Dyson stopped short of suggesting that the existing GHRs no longer apply and instead stated that “the existing rates will […] remain in force for the foreseeable future, and will remain a component in the assessment of costs, along with the application by the judiciary of proportionality and costs management.”

The decision represents something of a double edged sword with any decision over the Guideline Hourly Rates likely to be as unpredictable as the outcome of this year’s General Election. Paying Party firms will likely be relieved that hourly rates haven’t increased but there was also a feeling among many established figures that hourly rates could have decreased.

Solicitors have to remember that the GHR remain as precisely that a guideline and only as a starting point. Lord Dyson explicitly stated that “[the GHRs] remain an integral part of the process of judges making summary assessments of costs in proceedings. They also form a part, even if only a starting reference point, in the preparation of detailed assessments. They also provide a yardstick for comparison purposes in costs budgeting.”

Hourly Rates will inevitably continue to be a battleground until Lord Dyson has his way and the application of fixed costs is extended. Lord Dyson’s comments regarding the application of hourly rates to Costs Budgeting is also an interesting reference point given the on-going debate as to what role (if any) costs management should have on the assessment of hourly rates. Lord Dyson’s statement simply leaves the status quo which invariably carries with it the same issues as before.

The big question now is how is it possible for a receiving party seeking hourly rates above the GHRs able to predict what might or might not be allowed? The answer is that they can’t and can only base any predictions upon previous experience. My experience is that it is dealt with so inconsistently that the only fair comparison point is that of playing the lottery. If you don’t play you can’t win but by playing it doesn’t equal success.

The extension of fixed fees may well overcome the issue of GHRs but it is likely to be at the cost of solicitors. The only real option left is for solicitors to streamline processes and to become more efficient. On one hand fixed costs offers greater clarity for everyone but this does come at a cost. Does the solicitor suffer by getting reduced costs, does the client suffer as matters have to be passed to lower grade fee earners or less time spent in order to ensure a reasonable return. There will no doubt be time to have these arguments at a later point but whilst nothing may have changed, change is certainly coming.

What do you think about the decision to freeze GHRs, is this a good thing? Do you support the extension of fixed fees as suggested by Lord Dyson? As always let us have your comments below.

The full note published by Lord Dyson is available by clicking here.

If you have any questions or queries in relation to this blog please contact Sean Linley (sean.linley@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622.