Award-winning Court of Protection Costs Specialists
No doubt you will have read the judgment that was handed down at the end of September 2020. If, for some reason, you haven’t seen or heard of this judgment, the case; PLK and Others  EWHC B28 (Costs) It is well worth a read.
As many of you will be aware, the Court of Protection Section of the Senior Courts Costs Office (SCCO) has, for many years now, applied the Guideline Hourly Rates for Summary assessment on the vast majority of the 8,000 or so bills of costs it assesses each year. Whilst there are cases where appropriate uplifts can be applied (and indeed are allowed), for the majority, the guideline hourly rates (GHR) are applied without further ado.
Unfortunately for practitioners, the GHR have been in place since 2010 and it is over ten years since these rates have been reviewed. It is felt, given ongoing inflation over the course of the previous ten years, these rates have slowly become eroded to the point where they are simply unrealistic and uneconomical.
Indeed, we are starting to see various comments made by costs judges in relation to the validity of such rates. The case of PLK and Others is, in our view, a landmark decision and timely.
Put simply, this case enables deputies to enhance their rates by up to 20%. Judgment was reached as a result of the consideration of evidence relating to increasing overheads and inflation.
The following tables show the 2010 GHR and the “new” rates that can be applied. The judgment directed the Court of Protection Costs Officer to consider any rate with an enhancement of up to 20% applied to it would be “prima facie” reasonable. The impact of these enhancements is illustrated below:-
|London 3||£229 – £267||£172 – £229||£165||£121|
|London 3||£275 – £320||£206-£275||£198||£145|
There was great excitement amongst practitioners following the handing down of the judgment. Not only did the judgment confirm these hourly rates would be considered to be “prima facie” reasonable, it also confirmed this approach could be “adopted immediately and be applied to all outstanding bills regardless of the whether the period is to be 2018, 2019, 2020 or subsequently”.
Practitioners rushed to ensure any bills not yet submitted would be re-drafted to take into these exciting new rates. Could filed bills be withdrawn, re-drafted and re-submitted? Could bills that had been assessed but not yet agreed be appealed? Given the wording of the judgment this all seemed likely.
However, in the days that followed, the SCCO sought to rein in our excitement…..
The very next day, a letter was sent to professional deputies to remind them of their obligations towards their clients. A stark reminder was provided; the indemnity principle still applies!
The indemnity principle is in place to ensure one does not seek to recover more from the paying party than they are able to from their own client. Therefore, for these new rates to apply, one can only do so if the terms of business under which the work is being undertaken accommodates these higher rates. For example, you could not charge a rate of £260, if your terms only allow for a rate of £217 to be charged.
The letter went on to advise practitioners that any bills of costs currently filed with the court (i.e. awaiting assessment) could not be withdrawn and appeals were unlikely to be successful (where final costs certificates had not yet been obtained) where the “old” GHR were applied.
This letter was swiftly followed up by a practice note, which essentially reinforced the above from Ms Maxwell. In total, five key points were contained within the note (which can be found here).
Para. 3 of the practice note stated the indemnity principle needs to apply. Para. 4 advised that practitioners would not be permitted to withdraw or amend bills of costs awaiting assessment without an application to a costs judge (such application having to be made on N244), which must also include evidence the indemnity principle has not been breached (i.e. a copy of the terms and conditions of business). Para. 5 went on to advise that appeals seeking to apply the higher hourly rates in relation to bills previously assessed (via the informal appeal route) would be unlikely to succeed. The practice note goes on to advise Costs Officers will continue to have regard to Terms and Conditions of business and the estimates provided to the OPG in the OPG105 document.
It occurs to us a few interesting points arise from this further guidance. It is interesting the court has raised the issue of the terms of business enabling these rates to be applied. Many firms for whom we undertake work have a practice of providing terms to their deputies (often the deputies are, in effect, writing to themselves!). Given the deputy’s role as such and the fact they are also the practitioner, the deputy would know the rates (s)he wishes to charge. An interesting point for discussion.
In any event, our first tip here is to update your current terms to enable these enhanced rates to be claimed. It may also be worth bearing in mind that there could be future changes on the horizon to hourly rates, given the review that is currently ongoing at the time of writing (October 2020). Whilst we wouldn’t want to count our chickens, it may be worthwhile considering the hourly rates you wish to detail in your terms to ensure you can take full advantage of any future increases. We would suggest updated terms be prepared sooner rather than later to maximise your increase.
You may also wish to include further terms to enable you to claim enhanced rates. Such terms need to be carefully worded, clear and explicit to ensure any disputes further down the line are avoided.
Be mindful of the indemnity principle. The court may request evidence to support higher rates being claimed.
One further tip here is to also review your OPG105 Estimates. If you are to apply higher rates part way through a deputyship year, what impact will this have on your estimate? If your terms support a higher rate and you are going to seek them for the duration of the deputyship year, does your estimate need to be updated?
The OPG has, very helpfully, issued a practice note on this very subject. The practice note, issued on 28 October 2020, states:-
“OPG does not expect to be notified of any increases in costs that are in accordance with the principles set out in the judgment in PLK and Ors. However, OPG will continue to require notification of any costs that fall outside of those principles”.
It is also worth bearing in mind the impact this decision will have in relation to any ongoing litigation that may be associated with your deputyship. Do you need to update your schedule of loss to factor in increased deputyship costs? This will ensure these costs are recovered under the litigation and will also assist in recovering the costs at assessment (as you will be able to confirm to the SCCO the costs contained within the bill were recovered within the litigation).
There can be no denying the judgment in PLK and Others is good news for professional deputies and those engaged in Court of Protection work alike. In our view, these rate increases are long overdue. However, given the guidance and further information provided by the SCCO immediately following the judgment, our advice is to exercise caution when deciding upon your hourly rate to be claimed within the bill of costs. Check your terms and update them if needed. Check your estimates and contact the OPG without delay if increases to those estimates are required. The impact is positive, but one must remain vigilant to ensure one can take advantage of this new case law.
We have been providing advice and guidance where possible to our clients to ensure they can take advantage of the findings following the judgment handed down a few weeks ago. Our dedicated Court of Protection Costs team is available to assist you.
Should you require any additional assistance in relation to these issues, or have any costs related queries, please don’t hesitate to contact Paul Cruickshanks by email (firstname.lastname@example.org) or give Paul a call on 01733 359 030.
Head of Court of Protection
Need assistance? Let’s have a chat!