Plk
| Jurisdiction | England & Wales |
| Judge | Master Whalan |
| Judgment Date | 30 September 2020 |
| Neutral Citation | [2020] EWHC B28 (Costs) |
| Date | 30 September 2020 |
| Docket Number | SCCO Refs: 13080340, 12177963, 11775290, 11620036 |
| Court | Senior Courts |
[2020] EWHC B28 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
FROM THE COURT OF PROTECTION
Thomas More Building, Royal Courts of Justice
London, WC2A 2LL
Master Whalan
SCCO Refs: 13080340, 12177963, 11775290, 11620036
In the Matters of:
Mr Richard Wilcock, counsel, instructed by Clarion Solicitors Limited (t/a Clarion), costs solicitors for all four applicants.
Hearing date: 26 th May 2020
Judgment Approved by the court
These assessments raise a common point of principle applicable to the decisions of Costs Officers and Costs Judges when assessing costs incurred in the Court of Protection (‘COP’) by a court appointed Deputy (and his/her associates) in the general management of the affairs of a protected party. The issue for determination concerns the method of assessment of the hourly rates claimed by Deputies. It is the applicants' submission that the court's current approach which, broadly speaking, relies on the application of the Guidelines Hourly Rates (‘GHR’) approved by the Costs Committee of the Civil Justice Council is, by 2020, incorrect and unjust. Instead the assessment of COP work should be predicated on a more flexible exercise of the discretion conferred by CPR 44.3(3), whereby the GHR are utilised as merely a ‘starting point’ and not a ‘starting and end point’.
The court has consolidated the assessments in four cases that are chosen to represent the costs claimed by Deputies in different parts of England, in the management of the affairs of protected parties who had sustained significant brain or birth injuries.
PLK
The protected party is an adult male who sustained an injury at birth. He received damages of £5,649,938.50. The Deputy is Alexander Wright of Boyes Turner LLP, Reading. The bill claims £28,974.34 (including VAT) for the period 21 st July 2018 to 27 th February 2019. The hourly rates claimed are:
Aayan Ahmed Thakur
| A | £284.00 |
| B. | £252.00 |
| C. | £211.00 |
| D. | £155.00 |
The protected party is a 9 year old boy who suffered brain damage at birth. His estate is worth in excess of £12,000,000. The Deputy is Chris Proxamatis of Gillhams Solicitors LLP, Golders Green, London, NW11. The bill claims £50,113.32 (including VAT) for the period 19 th September 2018 to 18 th September 2019. The hourly rates claimed are:
Nathanial Chapman
| A | £350.00 |
| D | £159.00 |
The protected party sustained a significant head injury in a cycling accident which aggravated underlying mental health issues, including schizophrenia. He received damages in 2014 of £2,325,000, plus periodical payments of £75,000 pa, which are indexed linked. The Deputy is Lynne Bradey of Wrigleys Trustees Limited, Sheffield. The bill claims £40,672.58 (including VAT) for the period 20 th August 2018 to 19 th August 2019. The hourly rates claimed are:
Paul Nigel Tate
| A | £263.00 |
| B. | £232.00 |
| C. | £191.00 |
| D. | £145.00 |
The protected party was 11 years old when he sustained a serious brain injury when he was hit by a bus. The claim settled in about 2011 for a lump-sum award of £4,000,000. The Deputy is Natasha Molloy of Freeths LLP, Nottingham. The bill claims £123,764.74 (including VAT) for the period 12 th December 2017 to 11 th December 2018. The hourly rates claimed are:
| A | £284.00 |
| B. | £252.00 |
| C. | £211.00 |
| D. | £155.00 |
The bills in all four cases were drafted by Clarion and the hourly rates claimed are based on the GHR of 2010 plus a percentage uplift to reflect RPI inflation (of approximately 31%) between 2010 and 2019.
COP costs are assessed by reference to the relevant factors set out in CPR 44.4(3), entitled ‘Factors to be taken into account in deciding the amount of costs’, as applied by rule 19.6 of the Court of Protection Rules 2017. The relevant factors listed in CPR 44.4(3) are:
(b) the amount or value of any money or property involved;
(c) the importance of the matter to all the parties;
(d) the particular complexity of the matter or the difficulty or novelty of the questions raised;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) the time spent on the case;
(g) the place where and the circumstances in which work or any part of it was done.
Guideline Hourly Rates were issued originally by the Supreme Courts Costs Office as part of its Guide to the Summary Assessment of Costs. Revised rates were issued regularly by the SCCO until 2006. Revisions from 2007 were issued by the Master of the Rolls following reports from the Advisory Committee on Civil Costs. These revisions were based primarily on inflation rate rises. The last revision occurred in 2010. The GHR rates are set out in a table which is made up of grades of fee earner and geographical bands. The rates are as follows:
| Year | Guideline Hourly Rates 2010 | |||
| Bands | A | B | C | D |
| London | £409 | £296 | £226 | £138 |
| London 2 | £317 | £242 | £196 | £126 |
| London 3 | £229–267 | £172–229 | £165 | £121 |
| National 1 | £217 | £192 | £161 | £118 |
| National 2 | £201 | £117 | £146 | £111 |
In 2010 the responsibility for the GHR passed from the ACC to the Costs Committee of the Civil Justice Council. Subsequently the Costs Committee was instructed to analyse the GHR by conducting ‘a comprehensive, evidence-based review of the nature of the Guideline Hourly Rates and to make recommendations to the Master of the Rolls’. In May 2014 the Committee reported that the datum which had been gathered in respect of GHR was insufficiently strong to form the basis of a comprehensive, evidence-based review. As such, the GHR have not been revised since 2010.
The failure to revise the GHR since 2010 has attracted adverse comment from within the legal profession and, more recently, from the senior judiciary. In Ohpen Operations UK Limited v. Invesco Fund Managers Limited [2019] EWHC 2504 (TCC), for example, O'Farrell J. made a ruling on costs after granting the defendant's application for the claim to be stayed pending compliance by the parties with an agreed dispute resolution procedure. The defendant's costs were £52,152 and the claimant submitted that the defendant's solicitors' hourly rates were unreasonably high. O'Farrell J. commented (at paragraph 14) that:
It is unsatisfactory that the guidelines are based on rates fixed in 2010 and reviewed in 2014, as they are not helpful in determining reasonable rates in 2019. The guideline rates are significantly lower than the current hourly rates in many London City solicitors, as used by both parties in this case. Further, updated guidelines would be very welcome.
In 2020, the Civil Justice Council established a Guideline Hourly Rates Working Group chaired by Mr Justice Stewart QC. Stewart J. is currently gathering evidence which includes details of the hourly rates claimed and allowed by Costs Judges and Costs Officers on detailed assessments for a three month period between 1 st September and 27 th November 2020. When all the relevant evidence is received and collated, the Working Group will make recommendations to the Master of the Rolls. Reports in the media have suggested that this process may be completed by the end of 2020, but it seems to me that this timescale may prove to be optimistic.
In recent years, the assessment of hourly rates in COP cases have been directed by the decisions in three SCCO cases.
In Re: Michael Ashton [2006], 31st July 2006, Master O'Hare determined the hourly rates applicable to a ‘Specialist Support Services Manager’ following a provisional assessment by a Costs Officer. At paragraph 17 of his judgment, Master O'Hare made a number of general observations concerning hourly rates in COP matters:
As the solicitors in this case recognise there are several reasons why hourly rates which are appropriate for receivers and their staff in most Court of Protection matters will be lower than the rates for other work. General management work of a receiver usually has lower levels of urgency and adrenaline than compared with other work. Although the decisions which have to be made can sometimes be of the greatest importance and can merit the most anxious consideration a solicitor receiver and his staff have greater autonomy than their equivalents in other work. There is also the fact that especially in a larger estate such as this the receiver will produce a steady stream of work.
The convention that was applied following Ashton was that Costs Officers in assessing Court of Protection bills generally applied hourly rates that approximated (albeit very broadly) to 90% of the GHR.
In Re: Smith and others [2007] EWHC 90088 (Costs), Master Haworth determined six consolidated appeals from Costs Officers in respect of the hourly rates allowed to COP Receivers. The appellants were represented by two senior costs counsel, Mr N. Bacon and Mr A. Post, who submitted that the decision in Ashton (ibid) was not a persuasive authority and, in any event, that it had been determined incorrectly. Master Haworth allowed the appeals and in respect of each of the cases applied in ‘the relevant guideline rate for the appropriate locality where the work was done for the grade of fee earner who carried out that work’ (paragraph 56). Master Haworth's reasoning is summarised at paragraphs 51–53 of his judgment:
51. I accept the submissions made to me by both Mr Post and Mr Bacon with regard to the fact that there should be both consistency and certainty in relation to the costs which those lawyers and their clerks who act as receivers in Court of Protection work are to be remunerated. Court of Protection work in many respects is no different from modern litigation where it is incumbent upon a solicitor receiver to act with economy in relation to the work to be done, to plan and...
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Michael Briley v Leicester Partnership NHS Trust
...Court of Protection, which is not work of the same order of complexity as this case, and which warrants GHR as this case does not, in PLK and Others (Costs) [2020] EWHC B28 (Costs), Costs Judge Whalan said Judges should apply: “ some broad, pragmatic flexibility” when applying the 2010 GHR......