Fixed Costs in a Nutshell!

It is important the professional deputy is aware if fixed costs may apply to their case, and to cut their cloth accordingly, or they are in danger of little return for their work efforts. I saw a file recently where a significant amount of work was undertaken by an interim deputy in establishing the assets of the protected party. There were many complicating factors that made determining the level of assets difficult, including a lack of ID for P, who was not born in the UK, and the previous management of P’s financial affairs was undertaken by an elderly family member, who had power of attorney, but subsequently lost capacity himself. Initial information from the OPG suggested assets in excess of £1.2 million. The actual figure, subsequently determined, was perilously close to the £16,000 ‘small assets’ threshold (see below). Despite P’s assets exceeding £16,000 it will be interesting to see how the court assesses the costs.

As a costs draftsman, I am engaged largely in preparing bills of costs for assessment by the court. Occasionally, however, I receive a file of papers, or instructions, to prepare a bill when, on closer inspection, no bill is required. This is either because the deputy order only provides for fixed costs to be recovered, and there is no direction for a detailed assessment of the costs, or, because P’s assets are less than £16,000.  Apologies for stating the obvious, but the importance of checking the deputy order on receipt cannot be overstated. If P’s assets are less than £16,000 and a detailed assessment is sought, a specific order from the court is necessary allowing for a detailed assessment in the circumstances.

Practice Direction 19B sets out the details of fixed costs in the Court of Protection that may be claimed by solicitors (and public authorities) and supplements Part 19 of the Court of Protection Rules 2017. The rules, and the level of fixed fees contained therein, have not changed since 2017, and are applicable where the period covered by the category of fixed costs or renumeration ends on or after April 2017.

I have no intention of reciting PD19B in full, but, in summary, the most common/ relevant fixed fees that may be taken by a professional deputy for property and affairs are as follows:-

Application work (applying to all orders appointing a deputy for property and affairs made on or after 01 April 2017)

For work up to and including the date upon which the court makes an order appointing a deputy for property and affairs, an amount not exceeding £950.00 (plus VAT).

Annual management fees (applying where the anniversaries fall on or after 01 January 2017)

For the first year, an amount not exceeding £1,670 (plus VAT).

For the second and subsequent years, an amount not exceeding £1,320 (plus VAT).

If the annual management year is cut short, for example further to the death of P, an appropriate apportionment of the fee is to be claimed.

Where the net assets of P are small/ below £16,000, the professional deputy may take an annual management fee not exceeding 4.5% of P’s net assets on the anniversary of the deputy order.

Until October 2020, the relevant assets excluded the value of P’s property. Since this date, (and further to PennTrust Ltd v West Berkshire District Council & Anor [2020] EWCOP 48) P’s property has been taken into consideration, taking very many matters out of the remit of these rules.  (This does come with the caveat that if costs are to be charged against P’s property, a separate application for authority for this will be required).

It is also to be noted that, where P’s assets only just exceed the £16,000, the court may use its discretion to fail to complete a detailed assessment of the bill of costs, and to determine a fixed fee/ small assets calculation should apply.

Annual reports (applying to reports lodged on or after 01 April 2017)

For the preparation and lodgement of a report to the OPG, an amount not exceeding £265 (plus VAT).

Practice direction 19B goes on to cite fixed fees for other areas of work, which may be undertaken by the professional deputy, including the preparation of tax returns and for conveyancing work.

The fixed fees above relate to profit costs only and are exclusive of any reasonable disbursements.

Also worth noting, the professional deputy can opt to accept fixed fees even when an order for detailed assessment is in place. They may well choose to do so if, for example, the costs incurred are little above the fixed fee(s) and they seek to avoid the assessment fee and/or they seek to proceed with greater expediency.

Should you seek further details, please refer to Practice Direction 19B, or we are more than happy to assist here at A & M Bacon.