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26 October 2021 | Comment |

Costs in disputed Court of Protection cases

Joseph Brophy, solicitor specialising in Court of Protection Disputes, looks at the rules on costs in the Court of Protection.

The general rule

Where a person’s (“P”) property and financial affairs are being managed by either a registered attorney under an Enduring Power of Attorney or a Lasting Power of Attorney, jurisdiction to deal with any issues usually resides with the Court of Protection.

The usual is that the costs of such proceedings are met from P’s own assets.

This is often quite simple and fair in practice. For example, a mere application for a deputyship can cost a significant amount of money (£950.00 plus VAT is the fixed amount set by the guidelines, but these costs can be even higher, subject to the approval of the Senior Courts Costs Office).

It only seems fair that P should meet those costs in the event that such an application is required. After all, the purpose of such an application is to appoint a person to manage P’s property and affairs, to protect P’s financial position and, ultimately, to have somebody appointed to act in their best interests. The main beneficiary to an order appointing a deputy is, ultimately, P.

Should P always pay?

Not all property and affairs deputyship applications are as straightforward as the above example and are often contested. With an aging population, it isn’t uncommon for many to fail to consider their finances in the event they may one day lose the capacity to manage them themselves. This could be due to old age or because of something more unexpected such as a stroke or sudden accident causing a sudden loss of capacity or rendering P incapable of managing their property and affairs.

If somebody has lost capacity but not signed a Lasing Power of Attorney appointing somebody to manage their property and affairs to in the event they later lose the requisite capacity, then a deputy will instead be required, unless P’s financial circumstances are such that one is not required. This can often cause disputes due to the uncertainty as to who P would have appointed to manage their affairs had they known that one day somebody else might be required to do so.

Such disputes are usually between those close to P such as family members or close friends, but court proceedings are also commonly issued by the Office of the Public Guardian or even a local authority which may have concerns with the way in which P’s finances have been or are to be managed. This, in turn, can lead to extensive Court of Protection proceedings and, of course, significant legal costs.

Again, there are arguments to suggest that P should also meet such costs. It is understandable, for example, that loved ones would want to ensure the best for P and the fact that P has not, perhaps got their own affairs in order should not come at a cost to those genuinely seeking a desirable outcome for their loved one and the secure management of P’s property and financial affairs.

However, it’s not always as clear cut as this and there may be good reasons for not appointing certain family members, friends or others, for example if there are concerns that they may not act in P’s best interests and may use P’s funds for their own gain. Is it fair that P should meet the costs of a contested deputyship application brought about by (or issued against) a family member who has perhaps stolen from P in the past, for example?

Of course, there are other disputes which can arise in the Court of Protection such as an application to make or change a will for P (known as a statutory will).

A departure from the general rule

So in what circumstances should and can the Court of Protection depart from the general rule that P should pay the costs of any court action?

Take a scenario where a disgruntled relative makes an application for an order appointing themselves as P’s deputy in place of an existing attorney or deputy without any proper or reasonable grounds. The matter is heard by the court, extensive financial information and witness statements are prepared but the court ultimately concludes that there was no merit in the application because P’s affairs are perfectly in order.

The legal costs incurred by those responsible for P’s affairs could amount to tens of thousands of pounds by the time substantive evidence is considered and several hearings have taken place. Under the general rule, P would be expected to meet such costs. However…the court has ultimate discretion in respect of costs and can depart from this general rule. The Court of Protection Rules 2017 (the rules which govern proceedings in the Court of Protection) set out the factors which the court should consider in deciding whether to depart from the general rule. These are:

  • the conduct of the parties;
  • whether a party has succeeded in the application (whether in whole or part); and
  • the role of any public body involved in proceedings (such as a local authority or the Office of the Public Guardian).

Such a departure, therefore, could mean that the ‘losing party’ pays not only their own costs but also a substantial proportion, if not all, of the other party’s costs. Considering the above example, it is clear who the ‘losing party’ might be; the disgruntled relative issuing an unnecessary application.

Establishing whether a party has succeeded or who the ‘losing party’ might be, however, is not always easy and the court will need to look at each case on its own merits. Unlike other types of civil litigation where a successful or unsuccessful party can usually be identified by who the court find in favour of, the position with contested Court of Protection disputes is often less clear cut and involves decisions regarding what the court ultimately considers to be in P’s best interests.

What if, in the above example, the relative had genuine reasons for bringing an application and there had been a degree of financial mismanagement the severity of which, however, was not of a sufficient degree to warrant replacing the current attorney or deputy? What if the mismanagement is sufficient to revoke the attorneyship or deputyship but the court opts to appoint an independent deputy instead? It is difficult to establish who has been more “successful” in these scenarios but why should this mean that P ultimately must pay the costs of proceedings brought for reasons entirely outside of P’s control?

Any party considering  Court of Protection  proceedings must consider the costs implications. Equally, those defending proceedings or P’s representative(s) should consider not only a risk to P’s funds but also their own potential risk exposure to a costs order against them alongside the matter in dispute itself.

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