Litigation is an expensive business, so it is important to know how your legal costs will be dealt with whether you win or lose your case. In the Court of Protection (COP) there are specific rules about how your legal costs will be addressed.
The issue of costs is dealt with differently in the Court of Protection. Unlike civil litigation where “costs follow the event”, in other words, the losing party pays the winning party’s costs, different costs rules apply in the CoP depending on whether your application concerns a vulnerable person’s (i) property and financial affairs; or their (ii) health and welfare. Each of these has a different costs implication set out in Rule 19 of the Court of Protection Rules 2017 (the “Rules”).
With litigation becoming more and more expensive, there has been an increasing number of cases where the Court has not followed the general rule and made a different costs order at the conclusion of a case. This is possible since the Rules allow the Court to depart from the general position on costs in certain circumstances. It is important to be aware of this since it could affect your decision on how to conduct litigation in the Court of Protection.
This article sets out the general rules on costs; in what circumstances the Court may depart from the general rule; and the key factors the Court would normally consider when making a different costs order.
What is the “general rule” in each type of case?
Proceedings involving property and financial matters: your legal costs, and that of the other parties in the proceedings, shall be paid out of the vulnerable person’s assets.
Proceedings involving health and welfare matters: each party bears their own costs. Your legal costs will therefore be paid by you.
Proceedings involving both, property and financial and health and welfare matters: the costs will be apportioned to the respective issues and in line with the above rules.
Departing from the “general rule”
The COP has the discretion to depart from the general rules. The Court does not often take such steps but recent cases suggest that either the parties to the proceedings are asking the Court to consider this or, in certain cases, the Court itself is placing parties on notice from the outset. For example, we have seen the following included in Court Orders:
“The parties are reminded that whilst the usual order for costs in property and affairs cases is that the parties’ costs shall be paid by [P]’s funds, the court can depart from that position where, for example, a party has unreasonably pursued or contested a particular issue.”
What will the CoP look at when applying its discretion to depart from the general rule?
In deciding whether the departure is justified, the Court will have regard to all the circumstances of the case including:
- the conduct of the parties;
- whether one side has succeeded on part of their case; and
- the role of any public body involved in the proceedings.
Whilst “conduct” of a party may appear quite wide, the Rules helpfully add that the “conduct” includes:
- conduct before, as well as during, the proceedings;
- whether it was reasonable for a party to raise, pursue or contest a particular matter;
- the manner in which a party has made or responded to an application or a particular issue;
- whether a party who has succeeded in that party’s application or response to an application, in whole or in part, exaggerated any matter contained in the application or response; and
- any failure by a party to comply with a rule, practice direction or court order.
Application of these factors in JBN [2019] EWCOP 62 and in other cases
The Court considered and applied the factors set out above in the case of JBN. This resulted in the Office of the Public Guardian (OPG) being ordered to pay another party’s costs, despite it being a case relating to property and affairs with the expectation that the parties’ costs of the proceedings would be paid from the vulnerable person’s assets.
In JBN, the OPG had made an application for the revocation of an LPA for property and affairs on the grounds that the attorney had not acted in his father’s best interests. He had sold his father’s property and transferred most of the sale proceeds to himself, thereby jeopardising his father’s care costs. The attorney’s position was that his father had capacity at the time to make decisions regarding his home and finances.
The case was initially heard by a District Judge who suspended the LPA and appointed an interim deputy. The attorney contested the application and was subsequently successful in getting the suspension of the LPA lifted. The attorney sought an order that the OPG pays his costs which were around £82,000. The Judge considered the manner in which the OPG initiated the case and handled it. The Judge noted the following:
- The OPG should have properly considered the evidence about the father’s capacity to sell his home.
- It was suggested that the OPG should have agreed to use a joint expert witness to keep costs down. Alternatively, they could have requested the COP to decide on the issue of capacity before bringing litigation which went beyond what was necessary and reasonable.
- The COP considered that the OPG’s decision to pursue severe orders on a “without notice” basis was relevant. This included the suspension of the Lasting Power of Attorney and the appointment of an interim deputy.
- It was also noted that the OPG disregarded the attorney’s co-operation, including the fact that they had offered to place funds in an account to cover all care costs.
This case is helpful as it provides context for the type of behaviour that justifies a departure from the “general rule”. Our Court of Protection team has recently been involved in two cases where the Court was asked to depart from the general rule on costs. In both cases, the Judge departed from the general rule and the factors which played a role in the judge’s decision were whether:
- the party was successful in proving their position (although the Judge also stressed that being unsuccessful would not automatically mean that the party should not recover their costs)
- there were good reasons to start proceedings
- proceedings were launched into disproportionately
- there was co-operation with others
- attempts were made to mediate the dispute
- a party disregarded any directions set by the Court which led to further costs being incurred.
Interestingly, in one case which involved whether the donor/vulnerable person had the capacity to make the LPA, the evidence subsequently confirmed that they lacked capacity. The Judge was not critical of the attorney, whose position was that the donor had the capacity to make the LPAs, but explained that the position changed after receipt of the Special Visitor’s comprehensive report on the donor’s capacity (or lack of). The attorney’s insistence in pursuing the donor had capacity thereafter was not well received by the Court.
The issue of costs is at the Court’s discretion and one cannot predict the outcome. To give yourself a chance to achieve the best possible outcome to recover your costs from the vulnerable person’s estate, it is important to consider how you conduct yourself before and during proceedings. This can have a significant impact on the legal costs you may have to pay at the end of the case.
