ACC & Ors (property and affairs deputy; recovering assets costs for legal proceedings) [2020] EWCOP 9

Judgment concerning whether, and in what circumstances, the deputy can recover from the protected person’s assets costs which have been or are likely to be incurred in legal proceedings.

The judgment concerns three separate sets of proceedings whose only common factor was that the deputies in each case were connected with Irwin Mitchell: in two of the cases the deputy was the Irwin Mitchell Trust Corporation and in third case the deputy was a partner in that firm. No express provision “either granting or excluding authority to instruct solicitors or to conduct any kind of proceedings” was in any of the orders appointing the deputy. In the event litigation arose relating to each P (for entirely separate reasons) and questions arose as to the costs and also potential conflicts of interest in appointing Irwin Mitchell to act in the litigation.
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Hilder HHJ sets out the background to the three sets of proceedings, the position of the parties and the relevant law before at [45-49] explaining that the orders appointing the deputies contained a general authority and that these proceedings had “arisen because the Court had concerns about what the Applicants regard as a reasonable interpretation of ‘general’ authority.” Whilst these three cases “demonstrate a clear need for further amplification of the Court’s approach” she approached that task cautiously  as “‘General’ authority is not susceptible to exhaustive definition.” To do that she poses herself a series of questions:

• What authorisation is required to conduct litigation on behalf of P? [51]
• What about further proceedings in the Court of Protection? [52]
• To what extent does “general authority” encompass authority to take legal advice on behalf of P? [53]
• Where is the line drawn between seeking advice and conducting litigation? [54]
• What about urgent matters? [55]
• How should conflicts of interest be addressed? [56]
• What about cases where the deputy is not the instructing party? [57]
• What about acting as litigation friend? [58]
• What if P has capacity to give instructions for the work in question? [59]

Her conclusions on those questions are helpfully set out in an Appendix to the judgment reproduced below:

"1. The “general” authority to manage property and affairs which is granted by the standard deputyship order encompasses those common or ordinary tasks which are required to administer P’s estate efficiently. [46 - 48]

2. Authority to make a decision / do an act in respect of P’s property and affairs encompasses such ordinary non-contentious legal tasks, including obtaining legal advice, as are ancillary to giving effect to that authority. [53]

3. In particular:

  a. authority to purchase or sell property includes conveyancing [53.2]
  b. authority to let property includes dealing with leases or tenancy agreements [53.3]
  c. authority to conduct P’s business includes dealing with employment contracts of that business [53.4]
  d. “general” authority encompasses:

    i. the preparation of an annual tax return, and therefore obtaining advice as to completion of the return [53.7(a)];
    ii. discharging P’s financial responsibilities under a tenancy, and therefore obtaining advice as to liabilities under the tenancy [53.7(b)];
    iii. applying P’s funds so as to ensure that the costs of his care arrangements are met, and therefore dealing with employment contracts of directly employed carers [53.7(c)]

4. Specific authority is required to conduct litigation on behalf of P [paragraph 51] except where the contemplated litigation is in the Court of Protection in respect of a property and affairs issue [52.4] or to seek directions in respect of a welfare issue [52.10].

5. Where a deputy has authority to make a decision / do an act in respect of P’s property and affairs, such authority encompasses steps in contemplation of contentious litigation in the realm of that authority up to receiving the Letter of Response  but no further [54.4]. In particular:

  a. authority to let property encompasses taking steps to form a view as to whether there are grounds to evict a tenant of such property [53.13];
  b. “general” authority to manage P’s funds includes taking steps to form a view about whether a debt said to have been incurred by P is properly payable pursuant to section 7 of the Mental Capacity Act 2005 [53.13];
  c. “general” authority to manage P’s funds includes steps up to but not including the delivery of a letter of appeal in respect of a decision that P is not eligible for continuing healthcare funding [54.8(a)];
  d. where authority encompasses steps in contemplation of contentious litigation, that includes obtaining Counsel’s opinion. [54.5]

6. “General” authority of a property and affairs deputyship order does not encompass seeking advice or other steps preliminary to litigation in respect of welfare issues; it does encompass making an application to the Court of Protection for further directions /specific authority in respect of welfare issues. [54.6]

7. “General” authority of property and affairs deputyship does not encompass steps in contemplation of an appeal against the decision of an Education, Health and Care Plan. [54.8(b)]  

8. If circumstances arise where the protection of P’s interests requires action to be taken so urgently that prior authority to litigate cannot reasonably be obtained, a deputy proceeds at risk as to costs but may make a retrospective application for authority to recover costs from P’s funds. There is no presumption that such application will be granted - each application will be considered on its merits. [55]
 
9. Where a deputy wishes to instruct his own firm to carry out legal tasks, special measures are required to address the conflict of interest:

  a. the deputy may seek prior authority [56.7(a) - (e)];
  b. the deputy is required to seek - in a manner which is proportionate to the magnitude of the costs involved and the importance of the issue to P - three quotations from appropriate providers (including one from his own firm), and determine where to give instructions in the best interests of P [paragraph 56.7(f)(i)];
  c. the deputy must seek prior authority from the Court if the anticipated costs exceed £2 000 + VAT;
  d. the deputy must clearly set out any legal fees incurred in the account to the Public Guardian and append the notes of the decision-making process to the return. [56.7(f)(iv)] 

10. Specific authority is required to use P’s funds to pay a third party’s legal costs, even if those costs relate to litigation for the benefit of P. [paragraph 57]

11. The Official Solicitor is willing to act as litigation friend for P without charge in any of the existing classes of cases in which she acts where her usual criteria are met. [paragraph 58]

12. If P has capacity to give instructions for particular work, he will also have capacity to agree the costs of that work. [59]"

Read the full judgment on Bailii