In PLK & Ors (full judgment here) Master Whalan has provided guidance as to the appropriate hourly rates to be claimed in Court of Protection matters. The starting point will now be a rate equating to c. 120% of the 2010 guideline rates.
Whilst the rates may change further following the current review into the guideline hourly rates, this is very welcome news for Court of Protection practitioners who have been limited to the 2010 guideline hourly rates for a decade now.
Following this decision, a practice note has been produced by the Senior Costs Judge, Master Gordon-Saker which notes specifically that:
- The judgment is limited to years 2018 and onwards
- The decisions in Smith and Yahiaoui still remain applicable
- The judgment does not abrogate the indemnity principle and costs officers do not have discretion to allow rates at a higher amount that that which has been claimed in the bill of costs
- If a Deputy wishes to withdraw and amend a bill of costs, thy must make an application to a costs judge, along with evidence that the indemnity principle has been complied with
- Any request for a review which seeks to claim rates higher than those claimed in the bill of costs is likely to be unsuccessful
- Costs officers will still have regard to the Deputy’s terms and conditions, correspondence with the Court of Protection or Office of the Public Guardian, OPG105 lodged with the bill, and the signed certificate to the bill
The practical effect of the judgment and practice note is such that Deputies should consider, and if appropriate, update their terms as to the rates which they can claim so as to ensure that the indemnity principle remains intact if the rates detailed in PLK are to be recovered.
The judgement in PLK
Four cases were brought before the court to raise a common point of principle in relation to the hourly rates awarded to Deputies and their associates in the general management of a protected party’s affairs.
The guideline hourly rates have been fixed since 2010 and these rates have been used in Court of Protection matters, with very little room for deviance, from that date. It was the applicant’s submission that the appropriate rates should be based on an exercise of the court’s discretion as detailed in CPR 44.3(3).
A review was undertaken into the hourly rates in 2015 but concluded that there was insufficient data to formulate a comprehensive, evidence based, review. It is generally accepted throughout the wider legal community, and the judiciary, that the guideline rates are not helpful in determining reasonable rates today (see Ohpen Operations UK Limited v. Invesco Fund Managers Limited  EWHC 2504 (TCC)). These rates are therefore used as a starting point to consider the appropriate hourly rate on a case specific basis. Conversely, in the Court of Protection, the rates are generally used as both the start and the end point!
The hourly rates claimed in the four bills of costs being considered here were based on the 2010 guideline rates with a percentage uplift of c. 31% to reflect RPI inflation.
Matters before the Court
In considering the four cases which were the subject of this application, three historic cases were considered; Re Michael Ashton  which led to a convention of c.90% of the guideline hourly rates being allowed; Re Smith & Ors  which went away from Ashton and awarded the guideline hourly rate in full but noted the need to delegate more simple work appropriately to the correct grade of fee earner; and Yazid Yahiaoui  which reiterated the decision on Smith but went on to note that blended rates would be appropriate in certain circumstances.
Six witness statements and a number of supporting documents were provided and a preliminary issue hearing took place remotely in May. Two primary submissions were made:
- Hourly rates should be based on the factors at CPR 44.4(3), rather than a slavish compliance with the guideline hourly rates. Court of Protection work should be considered as specialist and not run of the mill.
- If the guideline rates re to be used as a starting point, then an uplift should be applied to reflect inflation between 2010 and 2019. This should be based on RPI inflation, not, CPI inflation.
Consideration and judgment
In relation to the first submission it was noted that consistency of rates is of more importance in Court of Protection matters. Firstly because of the common need to accurately estimate deputyship costs in order to assess damages in personal injury claims. Secondly, over 95% of court of protection bills are assessed by costs officers who do not have the broad ‘judicial experience’ required to apply the 44.4(3) factors (‘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).
Master Whalan also considered submissions and evidence regarding the amount of time which is written off as overheads and evidence was provided to support the assertion that this had increased significantly. However he was not persuaded by this. The applicants’ first submission was therefore not persuasive.
As to the second submission, the approaches in Smith and Yahiaoui were still considered to be appropriate in Court of Protection cases. Costs officers should conduct the assessment on the basis of set rates but would still have discretion in relation to the appropriate fee earner for the work undertaken; and to allow higher rates where there was a good reason to do so in that case.
Master Whalan noted that he did not have the power to amend the guideline hourly rates. However he was satisfied that the 2010 guideline rates could not reasonably be applied to matters in 2020 and stated that if rates fall within 120% of the 2010 guideline hourly rates they would be considered reasonable. These rates were deemed to be applicable to all bills for work to 2018 and subsequently.
The figures which were provided as representing the, reasonable, 120% uplift are:
Master Whalan finally noted that these rates would be subject to the recommendations of the hourly rate review.