Costs News

11 October 2018
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Court of Protection hits out at “astronomical” costs to determine straightforward issue

The Court of Protection has hit out at the “astronomical” costs incurred by both sides of what should have been a straightforward investigation into whether a protected person’s Disability Living Allowance (DLA) benefit was being misused.

In London Borough of Hounslow v A Father and Mother (Costs in the Court of Protection – Disproportionate litigation) [2018] EWCOP 23, District Judge Eldergill said “the prolonged and wholly disproportionate nature of the litigation increasingly turned not on this issue but on costs”.

The protected party, the son, had no savings and so the usual rule ─ that costs be paid from his estate ─ was not an option “unless his solicitor and counsel were willing to waive their by then substantial costs”, he recounted.

It became clear that costs were the reason why the case did not settle, as the father’s solicitors, Scott-Moncrieff and Associates, said payments of its costs by the local authority would be a condition of the application to the court being withdrawn. Hounslow then made the opposite a condition of applying to withdraw its application.

The father was the DWP appointee responsible for administering his son’s state benefits. Although separated from the father, the mother assisted with their son’s financial arrangements and the son’s DLA was paid into her account.

The initial allegation, based on a tip-off, was that the mother was misusing the DLA. The judge said the issue could have been resolved by the mother providing the local authority with the relevant bank statements, which if necessary she could be questioned about at a short hearing.

“What happened instead was that the local authority’s legal department and Scott-Moncrieff and Associates Limited on behalf of the father bombarded each other with hundreds of pages of unnecessary and often bad-tempered correspondence, witness statements, position statements and emails into which the court was often copied.

“By the time they had finished litigating an alleged misuse of DLA benefit that could have been resolved by looking at bank statements and asking questions, the amount of claimed costs incurred amounted to approximately £50,000 + VAT in respect of Scott-Moncrieff’s costs and £15,000 in respect of the local authority’s costs. That is an astronomical figure and in my view wholly out of step with the following provisions of the Court of Protection Rules 2007 and 2017.”

Hounslow was concerned to protect the identity of its anonymous informant, which DJ Eldergill said meant the father and mother “did not have a fair opportunity to deal with that allegation at the time, within the safeguarding investigation”.

“The local authority then sought to rely on public interest immunity in the proceedings, which was incorrect. When the bank statements were made available, the local authority was bound to conclude that it could not prove the alleged dishonesty and withdrew its application…

“Having regard to the fact that an allegation of dishonesty was made, which in my view a citizen is entitled to defend vigorously if unsubstantiated, the manner in which the application was pursued and the fact that the application was only withdrawn at the beginning of the hearing, my starting point would be that the local authority should pay all of the reasonable costs of the application.”

However, the judge found that the way in which the litigation was conducted on behalf of the father was also unsatisfactory. His costs were not proportionate to the issues, the complexity of the case and the son’s circumstances.

He continued that he had initially considered ordering the local authority to pay two-thirds of the father’s assessed costs, but decided it was necessary “to separate out a reduction which is intended to reflect these conduct issues and the proportionality issue”.

He explained: “The proportionality of the work undertaken on behalf of the [father] can most fairly be assessed on an item-by-item detailed assessment of [his] costs by the SCCO subject to the caveat that this judgment is copied to the SCCO so that the taxing officer is aware of the court’s concerns with regard to the litigation…

“Once the SCCO has undertaken a detailed assessment of the total amount of reasonable costs incurred by the [father], the local authority shall pay 90% of those costs, the 10% reduction reflecting the court’s finding on the litigation conduct of the other party.”

The mother was unrepresented and DJ Eldergill said the Court of Protection rules intended that a litigant in person was entitled to be reimbursed for their reasonable expenses but not to a fee or to remuneration.

“This is, however, an unfortunate finding in the mother’s case and one which, in my view, leads to an injustice. A serious allegation was made against her which necessarily she was bound to defend. It proved to be an unfounded allegation. Her conduct has been reasonable and I have no reason to doubt that her loss of earnings in defending her reputation is real.

“Naturally I am tempted to hold that section 55(1) [of the Mental Capacity Act 2005] is sufficiently broad that I have a discretion to award her costs but the section is subject to the rules and in my view the intention of rule 19(1) [of the Court of Protection Rules 2017] is that litigants in person, like family member deputies, cannot charge or recover loss of earnings or hourly fees.

“I would invite the mother to seek to agree with the local authority a sum covering her reasonable expenses. I would also invite the local authority to consider making an ex gratia payment to her and, if that cannot be agreed or done, that she gives consideration to whether the ombudsman might provide a remedy.

“The rules also need to be reviewed and revised so that the court can award a litigant in person costs in a case such as this.”

In an addendum, the judge said that, after copying the draft judgment to the parties, he received “further uninvited submissions on costs” from the council. “However, the local authority has not discussed an ex gratia payment with the mother and in my view this aggravates the unfair way in which she has been treated by the local authority.”


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