Court of Protection:  Costs in modest cases

Costs practice direction 19B has long been in effect for a number of years, albeit updated on a regular basis. Previously supplementing Part 19 of the Court of Protection Rules 2007, 19B, as it will be referred to in this bulletin, now supplements Part 19 of the Court of Protection Rules 2017.

In this bulletin, we look at an interesting issue that arose following updates to rule 19B as well as an interesting case with which we dealt recently whereby the court assessed the bill of costs as presented but subject to our providing confirmation that the Protected Party’s (P) assets were over £16,000.

 

Net Assets

One of the fundamental rules contained within 19B has been that assessment is only applicable if P’s net assets remain over £16,000. Should their assets fall below £16,000, fixed costs apply, which currently stand at 4.5% of the level of P’s net assets as at the anniversary date on which the order was made.

One interesting point we would wish to bring in at this point is that relating P’s property can be taken into account. Prior to the last changes made to 19B, which were made in April 2017, thto whether ere was very useful guidance which stated that if P or one of P’s dependents resided within the property, this asset, or the value of this asset, was to be disregarded.

However, this guidance within the rules disappeared when the rule was updated in April 2017. Furthermore, following the implementation of the Court of Protection Rules 2017, we noted this guidance remained missing and queried whether this was deliberate (i.e. whether if P resides in his own property this asset could be taken into account when calculating P’s assets).

We therefore queried this with the Office of the Public Guardian, who confirmed with the policy makers of the Ministry of Justice that it was not the intention of the MoJ to change the rules in this way; it had simply been omitted.  We have been assured this will be reinstated to the rules in due course, so watch this space!

So it is clear; one cannot include the value of P’s property where P or one of P’s dependents resides therein, as before.

Income and Expenditure; over £16,000?

As stated we recently dealt with a case where P had modest assets. Cash assets available to P were held within a number of savings accounts and amounted to around £10,000.

In addition, P was entitled to around £9,000 in various state benefits.

P was also entitled to a share in a discretionary trust, which provided a further £5,600 (approx.) per year.

This brought P’s overall income to around £26,100.

The next thing we needed to do was to look at P’s overall annual expenditure. This was required in order to determine what P was left with (P’s net assets) on an annual basis.  We calculated that P’s overall expenditure for essential items (e.g. utilities, rent and so on), amounted to around £8,850.

We therefore presented these figures to the court and averred that P’s net assets, per year, amounted to around £17,250. The assessment was accepted and the court held that P’s assets did indeed amount to over £16,000.

Comment

We are often contacted by both clients and practitioners in relation to modest estates. It is worthwhile reviewing a couple of aspects of P’s case to ensure you correctly calculate P’s net assets.  As the case above shows, it is worth looking at the income vs expenditure and calculating what P’s net assets really are annually.  This will ensure you are paid if you are so entitled.

We also recommend looking at the deputyship order. If P’s assets were under £16,000 at the time the application was made, and the court still made the order for costs, there may be an entitlement under the order.  Indeed, we have seen cases where the court is prepared to make an order for costs, even if P’s assets are limited (in cases that are of sufficient complexity that the deputy is required to undertake work over and above the modest fixed costs provisions).

A further issue in relation to property values. Whilst ever it is useful to know that the value of P’s property cannot be taken into account when calculating net assets, what about if the property is occupied by one of P’s relatives, against their wishes?  This is unclear and we would suggest consideration be given into what constitutes a “dependent” of P.

If you are unsure of the position in relation to P’s net assets and what should/should not be included, we do recommend contacting the OPG. Whilst the OPG is often maligned, our experience was that our query above was dealt within a couple of hours and the appropriate guidance was obtained.

We do hope the information within this bulletin provides useful insight and information as to how you can approach these estimates.

However, you should have any further queries, or simply wish to discuss any costs queries you may have, please don’t hesitate to contact us.

 

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