LB Hounslow v A Father and A Mother
Judge: DJ Eldergill
Citation:  EWCOP 23
The sound of toys leaving the judicial pram at high speed can be heard when reading the judgment in this decision on costs from DJ Eldergill, arising out of an application that the LB Hounslow made in February 2017 to be appointed property and affairs deputy for a young man, arising out of financial safeguarding concerns relating to his parents. The father was legally represented, the mother acting as a litigant in person. As is – depressingly – often the way, things then got out of hand before, ultimately, the mother provided bank statements and notes regarding withdrawals and items of expenditure, and a final hearing took place on 2 February 2018 at the commencement of which the local authority withdrew its application without oral evidence being heard. That only left the matter of costs to be determined.
As DJ Eldergill asked:
- Why didn’t the matter settle at an earlier stage? The substantive application was founded on alleged misuse of benefits but the prolonged and wholly disproportionate nature of the litigation increasingly turned not on this issue but on costs. The son had no savings and so the usual rule regarding costs ─ that the costs be paid from his estate ─ was not an option unless his solicitor and counsel were willing to waive their by then substantial costs. Despite the father’s solicitor’s attempt to persuade me otherwise, costs was the stumbling block and became the reason why the case did not settle. The correspondence recently copied to me makes that crystal clear. On 10 August 2017, Scott-Moncrieff & Associates Ltd wrote to the local authority stating, ‘We will seek payment of our costs by Hounslow as a condition of the application being withdrawn’. On 22 September 2017, the local authority stated that, ‘The LA has indicated that it may be willing to withdraw the application, on the basis the respondents are in agreement to another [sic, presumed to be ‘a number’] of conditions’. The first condition was financial monitoring. ‘The second condition is that the application [sic] will not agree to pay the first respondents costs’. Thus, the litigation continued and the litigation costs continued to rise.
- I am not going to write a lengthy judgment, or give lengthy reasons, because in my view these proceedings have already taken up a wholly disproportionate amount of court time and been conducted with insufficient proportionality. The initial allegation was misuse of DLA by the partner of the DWP appointee. All that was required was that the mother provide the local authority with the relevant bank statements showing payments of DLA and out-going expenditure on the account. The local authority could then ask questions about particular items of expenditure and, if appropriate, question the mother on the expenditure at a short hearing. The outcome would either be that the applicant could prove misuse of funds on the balance of probabilities or it could not do so. If there was no evidence in the bank statements and no oral evidence to support misuse of funds then the local authority case failed, regardless of whether or not the identity of their informant was known.
- What happened instead was that the local authority’s legal department and Scott-Moncrieff & Associates Limited on behalf of the father bombarded each other with hundreds of pages of unnecessary and often tetchy or bad-tempered correspondence, witness statements, position statements and emails into which the court was often copied. By the time they had finished litigating an alleged misuse of Disability Living Allowance benefit that could have been resolved by looking at bank statements and asking questions, the amount of claimed costs incurred amounted to approximately £50,000 + VAT in respect of Scott-Moncrieff’s costs and £15,000 in respect of the local authority’s costs. That is an astronomical figure and in my view wholly out of step with the following provisions of the Court of Protection Rules 2007 and 2017.
Directing himself to the question of the conduct of the parties, DJ Eldergill noted:
- In terms of the conduct of the applicant, an allegation of dishonesty was made based on an anonymous report. In my view, the respondents did not have a fair opportunity to deal with that allegation at the time, within the safeguarding investigation. The local authority was so concerned to protect the identity of its anonymous informant that it decided not to share the minutes and ‘aspects’ of the safeguarding investigation with the respondents (Local Authority Position Statement, 7 July 2017, para 5). This made it difficult for them to provide a satisfactory response or explanation. The local authority then sought to rely on Public Interest Immunity in the proceedings, which was incorrect. When the bank statements were made available, the local authority was bound to conclude that it could not prove the alleged dishonesty and withdrew its application.
- The local authority therefore did not succeed with its case and, for the reasons given, the manner in which the application and pursued was unsatisfactory.
- Having regard to the fact that an allegation of dishonesty was made, which in my view a citizen is entitled to defend vigorously if unsubstantiated, the manner in which the application was pursued and the fact that the application was only withdrawn at the beginning of the hearing, my starting point would be that the local authority should pay all of the reasonable costs of the application.
- However, I also find that the way in which the litigation was conducted on behalf of the First Respondent was unsatisfactory. In my view, the litigation was conducted disproportionately by both sides and there was a failure to focus on the simple central issue of whether the bank statements into which the DLA was paid evidenced any misuse of funds. The amount of claimed costs incurred of approximately £50,000 + VAT is, to my mind, a staggering sum given the relative simplicity of the central issue and the son’s lack of means. Counsel’s position statement dated 27 September 2017 on behalf of the First Respondent is in general terms, in particular the financial tables at (internal) pp.10-12, and involved giving evidence rather than merely setting out a position based on evidence. The correspondence is full of generalised assertions, of applications being misconceived, requests for summary judgment, etc, and both legally-represented parties made basic procedural errors (filing lengthy documents electronically despite what the rules say and including references to discussions at a DRH).
DJ Eldergill initially had in mind that the local authority be ordered to pay two-thirds of the respondent’s assessed costs, but ultimately considered it necessary to separate a reduction intended to reflect conduct issues and the proportionality issue, directing the detailed assessment of the father’s costs by the Supreme Court Costs Office, the local authority then being required to 90% of those costs, the 10% reduction reflecting the court’s finding on the litigation conduct of the other party.
DJ Eldergill also had to consider the difficult question of the costs recoverable by the mother as litigation friend. Having examined relevant (and, he found in some cases, irrelevant) statutory provisions he reached the conclusion that:
- [t]he intention of the [Court of Protection Rules] is that a litigant in person is entitled to be reimbursed for their reasonable expenses but is not entitled to a fee or to remuneration. The intention of the rules seems to be that expenses but not fees, charges and remuneration are permitted and this is consistent with the disapplication of both CPR Rule 46.5 and the Litigants in Person (Costs and Expenses) Act 1975.
- Given a general rule in financial proceedings that costs are payable from the incapacitated person’s estate, the intention underlying the rules seems to be that litigants in person such as family members who have not incurred any legal costs should not charge a fee for assisting an incapacitated person and the court, for example to cover loss of earnings for attending court, reading documents and preparation. In many cases, such as statutory Will, LPA and disputed deputyship applications, several family members may wish to participate and join the proceedings as parties without being represented. The record I have seen, in a statutory Will case, is nineteen. If all of them were entitled to, for example, loss of earnings for attending and preparing for court, the additional costs would be significant.
He noted, however, that
- [This is an] unfortunate finding in the mother’s case and one which, in my view, leads to an injustice. A serious allegation was made against her which necessarily she was bound to defend. It proved to be an unfounded allegation. Her conduct has been reasonable and I have no reason to doubt that her loss of earnings in defending her reputation is real. Naturally I am tempted to hold that section 55(1) is sufficiently broad that I have a discretion to award her costs but the section is subject to the rules and in my view the intention of Rule 19(1) is that litigants in person, like family member deputies, cannot charge or recover loss of earnings or hourly fees.
- I would invite the mother to seek to agree with the local authority a sum covering her reasonable expenses. I would also invite the local authority to consider making an ex gratia payment to her and, if that cannot be agreed or done, that she gives consideration to whether the Ombudsman might provide a remedy. The rules also need to be reviewed and revised so that the court can award a litigant in person costs in a case such as this.
The disproportionality between the costs and the substantive issues at stake in this case is depressing but not entirely unfamiliar (although more striking, perhaps because it is in a publicly funded case – in our experience, the truly astronomical disproportion mostly comes in family feuds with wealthy individuals working out their grievances using P as a pawn). More important, perhaps, is the gap identified by DJ Eldergill in this case in relation to the ability for the mother to be recompensed for the financial costs she had incurred in defending herself. Hopefully, with a new Vice-President, the Rules Committee can be brought back to life and can add this to its task list.