Cost Ruling in the Court of Protection

Posted on: January 11th, 2018

Applicants and Respondents in Court of Protection cases should be aware of the cost implications when making applications and/or responding to applications.

The Outcome
The Office of the Public Guardian (OPG) was successful in their application to have the Lasting Power of Attorney (LPA) for Property and Affairs revoked. The attorneys were ordered to share their own costs.

The Facts
The attorneys were appointed under an LPA for property and affairs for the individual (referred to as P for ease). They obtained inheritance tax advice from a financial advisor and decided to use £324,000 of the P’s money to purchase property. The attorney then applied to the Court for a retrospective ratification of this gift as the attorney did not have the authority to make the gift. The court refused to ratify the gift and the application was unsuccessful.

The OPG applied to have the LPA for property and affairs to be revoked. The application was successful and the LPA for property and affairs was revoked. The judge found that the attorneys were not acting in the P’s best interests when they instructed an IFA to make investments for the purpose of saving inheritance tax. The Attorneys were ordered to pay their own costs of the application and the costs of the official solicitor (who was appointed to act for P in the proceedings) to be paid by the attorneys in equal shares.

The OPG also applied for the LPA for Health and Welfare to also be revoked but this application was unsuccessful.

The Law
Rule 19.2 of the Court of Protection Rules 2017 (at the date of this hearing Rule 156 of the Court of Protection Rules 2007) where proceedings concern P’s property and affairs the general rule is that the costs of the proceedings, or of that part of the proceedings that concerns P’s property and affairs, shall by paid by P or charged to P’s estate.

Under Rule 19.5 of the Court of Protection Rules 2017 (at the date of this hearing Rule 159(1) of the Court of Protection Rules 2007) the court may depart from Rule 19.2 if the circumstances are justifiable. When considering whether to depart from the general rule the Court will consider the following;

  1. The conduct of the parties to include;
    – conduct before as well as during the proceedings, 
    – whether it was reasonable for a party to raise, pursue or contest a particular issue
    – the manner in which a party has made or responded to any application or a particular issue and
    – whether a party who has succeeded in his application or response to an application in whole or in part exaggerated any matter contained in his application or response; and
    – any failure by a party to comply with a rule, practice direction or court order
  2. Whether a party has succeeded on part of his case even if he has not been wholly successful,
  3. The role of any public body involved in the proceedings.

The Comment
The Judge ruled that the conduct of the attorneys had contravened their authority (in using the funds without authority) and failed to act in P’s best interest justifies the departure from the general rule. When considering reasonableness in pursuing or contesting an issue, the attorneys still wished to continue to act. As the gift was not ratified, the prospects of them continuing to act as attorneys was always going to be in considerable doubt and the risk of costs present. When considering whether the attorneys were successful in part of their case, the LPA for Health and Welfare continued, however, all other aspects of their case was unsuccessful. The judge did not criticise the OPG for his conduct in the proceedings and commented that the OPG performed their public function in providing information to the Court.

The judge concluded 
My decision is that, having regard to the matters set out above and in particular the conduct of the parties, [the attorneys] should be responsible in equal shares for their own costs of the application in relation to revocation of the Lasting Power of Attorney for Property and Affairs. P’s costs should be paid by [the attorneys] in equal shares.
If you are considering making an application or responding to an application in the Court of Protection, you must consider the cost implications of doing so.

Should you require further information in relation to costs and any other matter in Court of Protection proceedings, you can contact the Court of Protection Team at Coffin Mew.
Hannah Rowlatt is a Solicitor in the Court of Protection team.