The Public Guardian v Andrew Riddle (No. 2) [2020] EWCOP 41
Background
The proceedings related to applications regarding forty individuals for whom Andrew Riddle (“AR”) was appointed, or had applied to be appointed, as property and affairs deputy. AR was seeking authority to charge fees at the solicitors’ rate and to seek assessment of his costs by the Senior Courts Costs Office (“SCCO”). AR is not a solicitor or working under the supervision of a solicitor.
Following an initial hearing, the issues for determination were identified as:
a. Should AR be authorised to charge fees at solicitor rate (both general and on a case specific basis)?
b. If he should be so authorised, should he be relieved of any liability for past charging at that rate without specific authority? (For the avoidance of doubt, should the answer to (a) be positive, that does not necessarily mean that the answer to (b) will also be positive.)
c. On the basis of facts found regarding past conduct and conclusions as to charging rates, should appointments currently held by AR be discharged?
d. On the basis of facts found regarding past conduct and conclusions as to charging rates, should AR be appointed in those matters where he has made an application for appointment?
Two further issues were subsequently raised:
a. Four further cases were identified by the Public Guardian as raising concerns and as a result, “it is now the case that all deputyship orders held by [Mr. Riddle] have raised a concern”.
b. The Public Guardian had understood that AR was funding his litigation via legal expense insurance but it was established that AR had used funds from twenty-two persons to the (re-calculated) sum of ￡118,359.60.
HHJ Hilder was most concerned regarding the additional point b above, and sought an undertaking from AR that he would not take any further funds from protected persons, and made it clear to him that he was at risk of imprisonment if he breached the undertaking. She also directed that he filed at statement providing explanation of his actions.
The law
Duties of a deputy
Any decision made pursuant to the Mental Capacity Act 2005 (“MCA”) must be made in the best interests of P (section 1(5)). When determining best interests, section 4 MCA provides that consideration must be given to various factors.
The MCA Code of Practice sets out duties imposed by the MCA on deputies and the MCA imposes on a court-appointed deputy a duty to have regard to the Code of Practice.
When an application is made for the appointment of a deputy, the applicant is required to make a number of declarations and undertakings to include:
“2. I will act within the scope of the powers conferred by me by the court as set out in the order of appointment and will apply to the court if I feel additional powers are needed.
4. I will make decisions on behalf of the person to whom the application relates as required under the court order appointing me. I will not delegate any of my powers as a deputy unless this is expressly permitted by the court order appointing me.
8. I will comply with any directions of the court or reasonable requests made by the Public Guardian, including requests for reports to be submitted.
9. I will visit the person to whom the application relates as regularly as it appropriate and take an interest in their welfare.”
If a deputy is found to have acted beyond his authority, the court has the power to provide retrospective authorisation (section 23(3)(d) MCA, which although relates to attorneys is considered to apply to deputies also).
The court also has the authority to revoke the appointment of a deputy if it is satisfied that a deputy has behaved in a way which contravenes the authority conferred on him (section 16(8) MCA).
Renumeration
A deputy has a statutory right to reimbursement of expenses (section 19(7) MCA). Authorisation of remuneration is a best interests decision of the court and it is the court order which provides any legal authority.
Further guidance regarding renumeration can be found in Rule 19.13 of the Court of Protection Rules 2017. The standard approach has always been that public authorities are not entitled to costs assessment.
The court has previously considered renumeration of non-solicitor deputies in The Friendly Trust Bulk Application [2016] EWCOP 40 and in The London Borough of Enfield v Matrix Deputies Limited, DW, OM & the Public Guardian [2018] EWCOP 22 (where it was stated that if the order did not specify a rate, whether or not separate authority to allow the assessment of fees was also given, this does not permit that solicitors’ rates should be implied).
The deputyship order is determinative as to whether VAT is chargeable. A deputy is has a VAT registered business cannot assume that VAT can be added to the fee authorised by the order.
Commission
AR received commission on the arrangement of various funeral plans. Receiving the commission was in breach of paragraph 8.58 of the MCA Code of Practice. Failure to credit the commission payments to P promptly was a failure to act in their best interests in breach of sections 1(5) and 4 MCA and paragraph 8.57 of the Code.
Findings
HHJ Hilder stressed the role, duties and benefit of solicitor – “formal qualification as a solicitor is a significant and important matter. Not least, it is a mark that the individual concerned is subject to a code of ethics and the disciplinary procedures of a professional body. Solicitors have a status as officers of the court; and they must satisfy further requirements in terms of ongoing training, CPD points and the like, in order to be able to continue in practice. There is a value in all of that to the person who engages the services of a solicitor. There is also a consequence in the cost of providing the service – solicitors tend to have some inescapably high overheads which are not borne by other deputyship providers. All of these factors mean that a reasonable and proper distinction can be drawn between solicitor and non-solicitor deputies, and such distinction can be reflected in the costs which each is authorised to charge for their services” [paragraph 103].
“It would be appropriate to exercise the court’s discretion to extend the solicitors’ costs provisions to a non-solicitor deputy where that deputy demonstrates that he/she/it is also subject to professional obligations comparable to those integral to being a solicitor; and where the non-solicitor deputy accepts being held to the same standards as a solicitor” [paragraph 104].
HHJ Hilder recognised that a review of guideline rates and the rates in Practice Direction 19B is being called for, but it was beyond the remit of these proceedings to consider rates in these proceedings.
HHJ Hilder considered AR’s statements regarding his qualifications and experience but she was “satisfied that he fulfils neither of these benchmarks for exercise of the court’s discretion to authorise renumeration at solicitors’ rates”.
HHJ Hilder refused to provide any relief of liability for past charging. “Overall it is regrettably clear that, from the outset, Mr. Riddle charged fees at a rate which he personally considered to be appropriate. I am satisfied that he did so irrespective of information he had been given by the Public Guardian… That he continued to charge in excess of authorisations even after the December 2016 letter and after the Matrix decision was published is, in my judgment, confirmation that he knew what he was doing all along, not mitigation of his earlier conduct. I have no doubt the Mr. Riddle felt justified in charging at the solicitors’ rate but his own conviction is not sufficient basis for being given “the benefit of the doubt”” [paragraph 112].
AR was ordered to refund overcharged fees and if was unable or unwilling, consideration should be had to calling in the bond in each matter for the appropriate amount.
Given the confusion regarding whether the fixed sums specified in Practice Direction 19B include VAT (which the Public Guardian believes it does but HHJ Hilder felt was “unduly harsh”), any non-solicitor applicant for deputyship who operates on a basis which involves VAT liability should specifically seek in their deputyship application authority to pass on P any VAT in respect of deputyship fees at the local authority rate.
In these proceedings, HHJ Hilder did not feel that AR acted inappropriately in respect of the VAT due and he should therefore be relieved of liability to the extent of the VAT due.
With regard to bank charges, HHJ Hilder determined that “setting up a system which left the individual protected person liable for bank charges at all when there was an option for a charge-free banking amounts to a clear failure to act in each person’s best interests” [paragraph 127].
AR had passed bank charges back to P in 21 cases. These sums have now been repaid but only after the Public Guardian raised concerns. HHJ Hilder stated that it was not satisfactory to say that a person with capacity would have had to pay charges.
Specific authority from the court is required to reclaim independent visitors’ fees from P and such fee must be assessed. Instructing an independent visitor must be made in the best interests of P and if considered appropriate, an application should have been made to the court for specific authority, supported by evidence setting out the time it would take the deputy to travel to P and how long a visit would take and, for comparison, the expense of the visitor’s fee.
“If a deputy acting under the fixed fee regime at the public authority rate wishes to reclaim from the protected person the costs of an Independent Visitor in addition to the fees set out in paragraph 16 of PD19B, specific authority is required. An Independent Visitor does not provide “specialist services that P would normally have been expected to pay if P had retained capacity,’ and so any charges incurred do not fall within the ‘disbursements’ permitted by paragraph 20 of the Practice Direction” [paragraph 131]. “The appointment of a deputy is a personal one, and the starting point in respect of visits is clearly address in the COP4 undertaking fie with the application for appointment” [paragraph 130].
HHJ Hilder then gave AR further time to restore the relevant matters and she would then reconsider the matter.
At the subsequent hearing on 11 August 2020, the Public Guardian confirmed that the estate of each protected persons with whom the proceedings were concerned was properly restored by 26 June. AR confirmed that he wished to retain his deputyship appointments.
HHJ Hilder made orders refusing AR’s applications for authorisation to charge fees at the solicitors’ rate, refusing his applications for relief from liability for past charges, and refusing the Public Guardian’s applications for revocation of his appointment [paragraph 7 of the judgment dated 18 August].
Specific supervision arrangements are to be applied by the Public Guardian and the matter will be reviewed formally at the end of the first year. In the meantime, if the Public Guardian has any concerns that AR does not immediately resolve, an application for discharge (reserved to HHJ Hilder) is to be made.
The judgment of 18 August considered costs in respect of the proceedings. AR and the Public Guardian had differing positions.
The legal framework is as follows:
- Section 55 of the MCA provides that costs are in the discretion of the court
- Section 51 of the MCA allows for rules to be made in respect of the practice and procedure of the court. The applicable rules are the Court of Protection Rules 2017 (“the Rules”)
- The general rule in respect of property and affairs is set out in Rule 19.2:
“Where the proceedings concern P’s property and affairs the general rule is that the costs of the proceedings, or that part of the proceedings that concerns P’s property and affairs, shall be paid by P or charged to P’s estate”
- The court may depart from the general rule as provided in Rule 19.5
The Rules apply equally to all court users, including the Public Guardian.
It was not in dispute that the circumstances of the proceedings did justify a departure from the general rule and it would not be appropriate for any protected person to bear the costs. HHJ Hilder agreed with the Public Guardian that each party should bear their own costs and rejected AR’s claim for the Public Guardian to pay any part of his costs.
Learning points
Whilst this case relates to a non-solicitor deputy, it does offer a clear reminder of the duties of all deputies, particularly those acting in a professional capacity. For professional and local authority deputies, there are three interesting points to note:
1. It is not clear whether deputies should be continuing to use P’s personal bank account (or open new accounts) where a monthly charge is being made. This should be differentiated from accounts being run as a client or quasi-client bank accounts where the deputy’s firm should not be seeking to pass on the charge.
2. Specific authority from the court is required to reclaim independent visitors’ fees from P and such fee must be assessed.
3. There is an acknowledgement that there is concern as to the sustainability of Court of Protection work and it is noted that guidance rates are being reviewed.
The full judgment can be found at https://www.bailii.org/ew/cases/EWCOP/2020/41.html.