ACC & Others [2020] EWCOP 9

Hearing: 7th October 2019

This case involved three individuals, who each had property and affairs deputies appointed from the same law firm.

ACC is now 20 years old. At the age of 4 she was involved in a road traffic incident in which she sustained serious injury and her mother died. A claim for damages was brought on her behalf, and settled in 2012 in the sum of £3 million plus periodical payments which presently amounted to £180,000 per year. She lives in her own home, with her grandparents.

ACC had Irwin Mitchell Trust Corporation Limited (“IMTC”) appointed as her property and affairs deputy. The deputyship order states at paragraph 2(a) that “The court confers general authority on the deputy to take possession or control of the property and affairs of [ACC] and to exercise the same powers of management and investment, including letting property, as she has, as beneficial owner, subject to the terms and conditions set out in this order.” The order did not contain any express provision either granting or excluding authority to instruct solicitors or to conduct any kind of proceedings on behalf of ACC.

In 2018 her local authority suddenly ended her care plan, resulting in an application to the Court of Protection seeking to recover the legal costs she incurred in seeking an appeal against the LA’s decision.

IMTC sought “an order authorising the Deputy to take whatever steps are necessary to ensure that [ACC] has the benefit of legal advice and assistance in relation to the Education, Health and Care Plan appeal, and that costs incurred by the Deputy in retaining solicitors to act on her behalf in that matter are to be assessed on the standard basis” and authority for such costs to be paid from ACC’s funds.

There was some lack of clarity as to who actually instructed the Public Law and Human Rights team at Irwin Mitchell LLP and with what authority; some documents suggested it was her Grandmother, and others suggested it was the deputy.

JDJ is 17 years old. He sustained brain injury due to clinical negligence at birth. He lives in his own home with his parents. In 2013 an order was made appointing a property and affairs deputy for him, which also did not contain any express provision either granting or excluding authority to instruct solicitors or to conduct any kind of proceedings on behalf of him.

His parents found a suitable educational placement for him, and wanted to appeal the Council’s decision that his needs could be met at a different, mainstream college.

By COP1 application dated 31st January 2019 [C10] the deputy applied for:

  • “… authority for costs to be incurred by Irwin Mitchell’s Public Law & Human Rights Department on [JDJ’s] behalf to ensure he receives the correct level of legal advice and representation in relation to education and social care.
  • Urgent authority is sought in order to liaise with the Local Authority regarding funding for [JDJ’s] future college placement and to appeal against their decision to the Tribunal if necessary.
  • The last day for doing this is 10 February 2019, hence the urgency. Anticipated costs in relation to this depends upon what action is required and the experts that will need to be instructed, however we would suggest a limit of £40 000 + VAT.”

Meanwhile, and to comply with Tribunal deadlines, the Public Law and Human Rights team of Irwin Mitchell LLP was instructed to advise and then to appeal against the Local Authority’s decision.

Again, quite who gave the instructions was less clear; different paperwork suggested that the Irwin Mitchell was instructed by JDJ’s parents rather than his deputy.

HPP is 50 years old. In September 2014 he sustained severe brain injury and multiple orthopaedic injuries when his bicycle was hit by a lorry. IMTC was appointed as property and affairs deputy for HPP. Again, the order did not contain any express provision either granting or excluding authority to instruct solicitors or to conduct any kind of proceedings on behalf of HPP.

IMTC brought forward a personal injury claim on his behalf. They appointed one of their directors as HPP’s litigation friend and applied for “the Senior Court Costs Office to carry out a detailed assessment of the costs of Charlotte Lorna-Leigh Waite, as Director of Irwin Mitchell Trust Corporation Ltd as Deputy for [HPP], in connection with her role as litigation friend in the proceedings relating to his personal injury claim…”

Applicant issues

  • The broader question which arose here, was when may a professional deputy instruct a legal firm with which it is associated, and recover the costs from P?
  • The deputies stated that their ‘general authority’ extended to tasks such as:
  1. “unexceptional non-contentious legal tasks,” even if carried out by other members of the deputy’s firm. eg completion of tax returns, drafting of leases and tenancy agreements, and drawing up of carers’ employment contracts;
  2. obtaining legal advice/incurring legal costs in relation to contentious matters but falling short of conduct of litigation. Eg actions up to sending a letter before action
  • The deputies contended that it would be “too restrictive” to require seek advice every time a deputy has to conduct ‘management’ of the property.
  • They said that where circumstances demand urgent action, a deputy should be able to issue proceedings and seek interim relief without specific prior authorisation from the Court of Protection.
  • The deputies recognised the potential conflict of interest, where the deputy will charge P for the work done by the associated firm, but said that those concerns could be addressed by requiring the deputy to obtain details from other firms of applicable rates.
  • The applicant deputies highlighted that the instruction and involvement of family members ‘imports a degree of external detachment sufficient to meet any concerns about conflict of interest’.
  • The Applicant deputies said there was no legal reason why a trust corporation could not act as a litigation friend, and no legal reason why a litigation friend cannot be authorised to charge for so acting.
  • They said that if a person has capacity to give instructions for the work in question, they will also have capacity to agree the legal costs of the work.

The Judge’s findings

General Authority, seeking advice, and conducting litigation

Judge Hilder stated that “The ‘general’ authority of a deputy does not encompass authority to conduct litigation on behalf of P.” and that such authority must be specifically granted.

“the deputy must satisfy himself that any particular act in respect of P’s property and affairs is either specifically authorised or falls within the “general” authority. Ultimately, the deputy is personally at risk as to costs if he acts outside his authority.”

“‘General’ is a term of ordinary language and should be understood as such when used in a deputyship order. Various dictionaries define ‘general’ as ‘common,’ ‘widespread’, ‘not specialised’ …The purpose of the ‘general’ authority is to enable a property and affairs deputy to do on behalf of P those myriad tasks too numerous to identify individually”

Judge Hilder outlined that ‘general authority’ may include preparing a tax return etc, as these are naturally part of managing property and affairs. However she also stated that sometimes seeking legal advice in contentious litigation may be within their ‘general authority’. She stated that ‘seeking legal advice will be obviously an “ordinary” part of discharging some functions of deputyship but not others.’

Examples of situations where a property and affairs deputy may need to form a view about potential proceedings:

a.       whether there are grounds to evict a tenant of a flat belonging to P; and

b.       whether a debt said to have been incurred by P is properly payable as being in respect of “necessary goods and services” under section 7 of the Mental Capacity Act 2005.

Both of these examples are clearly in the realm of property and affairs. Where a deputy has authority to let property belonging to P, forming a view about (a) may reasonably be considered to fall within the “ordinary” discharge of that authority. Using P’s funds to settle his debts falls within the “general management” authority, and forming a view about (b) may reasonably be considered to fall within the “ordinary” discharge of that authority.

However, not all contentious litigation is to do with property and affairs. It must be borne in mind that the “general” authority in the standard terms of the deputyship order is limited by reference to possession, control, management and investment of “property and affairs.”

As already observed, it is in my judgment important to distinguish between the contemplation of litigation in the realm of property and affairs, and the contemplation of otherlitigation. Steps towards contentious litigation of the latter type are unlikely to fall within the “ordinary” discharge of the property and affairs deputy’s authority, and so are not encompassed within the “general management” provision. 

The Judged acknowledged that there was scope to consider whether litigation was in essence a matter concerning property, or welfare. Arguably it ‘is within the authority of the property and affairs deputy “to obtain initial advice on public law decisions which will have an impact on P’s property and affairs (for example because P is being deprived of a source of funding or because P is being deprived of a service which the deputy may need to provide or supplement from P’s funds.)” 

The Court suggested that property and affairs deputies may find themselves having to consider closely the limits of their authority, in regards to public law decisions: 

a. Applications for continuing healthcare funding:

i. the assessment criteria are not financial, but the decision is. Makingan application for continuing healthcare funding for P is ancillary to the “general” authority of a property and affairs deputy to ensure that P receives all the funds he is entitled to;

ii. if the process of application reasonably requires the taking of advice, obtaining that advice is within the “general” authority of the deputy, and no specific authority is required;

iii. where an application is refused, the question of appeal arises. Procedures are not as considered in paragraph 54.3 above – this type of appeal is made by letter to the CCG (or Health Board, in Wales), to be delivered within 6 months of the date of decision;

iv. It is within the “general” authority of a property and affairs deputy to take preliminary steps (including taking advice on the merits of potential appeal) up to but not including delivery of the letter of appeal. The deputy should seek specific authority to conduct the appeal on behalf of P, and without it proceeds at risk as to costs.  

b. Education, Health and Social Care Plans:

i.  the assessment criteria are not financial, and neither is the decision. Even though there may be financial impact, the process of applying for an Education, Health and Social Care Plan is not within the “general” authority of a property and affairs deputy;

ii. Appeal lies to the First-tier Tribunal (Health, Education and Social Care Chamber), and must be made within two months of the decision, either by a parent of P or by P themselves, according to age.

iii. A property and affairs deputy should seek specific authority to take any steps in respect of challenging an Education, Health and Social Care Plan, and without it proceeds at risk as to costs.

iv. Given the short time period for lodging the appeal, any application for authority to conduct such proceedings on behalf of P should clearly indicate that expedited consideration by the Court is sought.

Urgent Matters

There will be some matters that are so urgent that authority to litigate cannot reasonably be obtained prior to taking action which will protect P.”

The deputy “should be able to obtain retrospective approval…provided the Court decides the action was in P’s best interests.”

This is so, not the least because of the need to give a cross-undertaking in damages if an application for an interim injunction is considered. A deputy ought not to be deterred from making that undertaking in a case where they appear to be acting in the best interests of the person or thought that they were at the time.

Conflict of interest

 Judge Hilder stated that ‘the proportionate and required approach to addressing conflict of interests is as follows:

a. when making an application for appointment, a prospective professional deputy considers whether… there is a realistic prospect that the deputy will wish to instruct someone else to give advice or carry out ‘ordinary’ legal tasks in order to be able to discharge the responsibilities of the appointment;

b. if such realistic prospect is identified, the prospective professional deputy further considers whether he may wish to instruct his own firm to advise or carry out the task;

c. if his own firm does provide the service for which he reasonably considers there to be a realistic prospect of need, the prospective professional deputy should then include in his COP1 application a request for specific authority to instruct his own firm to give the advice or carry out the task subject to a specified limit as to costs;

e. the Court’s approach to determining the limit of authorised expenditure of this type should follow the language of the Act in respect of attorneys’ authority to make gifts ie the authorisation must be limited so that it is not unreasonable having regard to all the circumstances and in particular the size of P’s estate. In some cases, the suggested limit of £2 000 + VAT in any given year may be considered sufficiently modest so as not to be disproportionate, sufficiently generous to be useful, and in the best interests of P to avoid the delay and expense of tendering. In other cases a different limit, or no such authorisation at all, may be more appropriate;

f. where seeking advice/ordinary legal tasks is within a deputy’s authority but no specific authority to instruct his own firm has been granted, prior to instructing his own firm a deputy must:

i. obtain three quotations for the work contemplated from providers of legal services who are properly qualified and appropriate to undertake the work. One of those quotations may be from the deputy’s own firm. The obtaining of quotes must be done in a way which is proportionate to the magnitude of the costs involved and the importance of the issue to P. Both monetary and non-monetary significance to P will be relevant; then

ii. make a best interests decision as to which of the three providers to instruct, and document the decision-making process; then

iii. where the deputy’s best interests decision is to instruct his own firm and the anticipated costs exceed £2 000 + VAT, make an application to the court for specific authority; and

What if the deputy is not the instructing party?

“Specific authority is required for a property and affairs deputy to use P’s funds to pay a third party’s costs. The ‘general’ authority of a property and affairs deputyship does not encompass such a use of P’s funds.” Legal expenses were highlighted as an example of what could be considered as ‘costs’. Even if they are a family member, best interest checks and precautions must be followed.

P has capacity for instruction

If P has capacity to give instructions for a specific piece of work, then he will also have capacity to agree the costs in question.”

ACC Case findings

Judge Hilder was ‘satisfied that it is in the best interests of ACC now to authorise the deputy to pay the costs of the challenge to her Education Health and Care Plan, subject to assessment by the Senior Courts Costs Office and up to a limit of £2 500 + VAT (inclusive of the sum of £906.10 that has already been assessed by the SCCO.)’

JDJ Case findings

It is appropriate in this matter to authorise the deputy to pay from JDJ’s funds the costs incurred in the proceedings to challenge his Education, Health and Care Plan, subject to assessment of those costs by the Senior Courts Costs Office.”

However the Judge highlighted that specific authority is required to challenge a care plan being cancelled.

It was not within the “general” authority of the deputyship orders made on to use JDJ’s funds to pay legal costs incurred by his parents.

Nor was it within the authority of those orders to act in respect of a welfare issue, other than to make an application to the Court of Protection for directions/further authority. Payment was authorised because there was a good reason the urgent request, and costs the family incurred were significant, and leaving JDJ’s parents out of pocket would not have been in JDJ’s best interests.

Hilder J emphasised that the Court will not lightly authorise actions retrospectively when there is no good reason why authorisation was not sought prospectively.  

HPP Case Findings

Despite a conflict of interest in Ms. Waite instructing Irwin Mitchell LLP, Judge Hilder reluctantly agreed that it was in HPP’s best interests for the solicitors who were familiar with his case to be allowed to continue.

CASCAIDr does not (yet) get involved in this sort of case, because we are not (yet) able to provide reserved legal activities and we cannot represent people in contentious litigation. However, we do work with law firms that provide legally aided services, in the Court of Protection and in the Administrative Court for judicial review. So please feel free to seek initial advice from CASCAIDr via our referral form on the top bar menu of the site.

The report can be found here