London Borough of Enfield v Matrix Deputies Limited, DW, OM and the Public Guardian

Summary

Senior Judge Hilder in this case decided various further issues arising from the discharge of a large number of deputyships held by Matrix Deputies Limited and its former employees on various grounds, including excess fee charging, see The Public Guardian v Matrix Deputies and the London Borough of Enfield and others [2017] EWCOP 17.

The first issue to be decided was the proper procedure for calling in security bonds where the deputy disputed liability. At paragraph 11, she considered Re Meek [2014] EWCOP 1 where HHJ Hodge QC had held that the calling in of a bond should be "a matter of course". At paragraph 14, she considered Re M [2017] EWCOP 24 where HHJ Purle QC held that calling in of a bond was inappropriate at the behest of a third party (a local authority owed care home fees) which the deputy had refused to pay.

The judge held that neither considered the position where the application was made against a former deputy who disputed liability (as Matrix did in this case). See paragraph 16.

At paragraph 20, she set out the procedure to be followed:

1. The person bringing the application (usually the new deputy but potentially the Public Guardian or the personal representatives of P's estate after P's death) should be required to provide a report identifying the alleged loss, with documentary evidence in support exhibited as appropriate. That report must be served on the deputy alleged to have caused the loss (but need not be served on the bond provider);
2. The allegedly defaulting deputy should have opportunity to consider that report and to file a written response;
3. The court will make a summary determination, with or without oral submissions as the court sees fit. The burden of establishing the loss is on the person bringing the application, on a balance of probabilities. The determination will 'summary,' not in the sense of 'summary judgment' but rather in the sense of 'summary assessment of costs' and as opposed to a full forensic examination;
4. The summary assessment must quantify the loss sufficiently for all parties and the bond provider to be clear about how much money is to be paid under the bond. If the loss is less than the full amount of the bond, then quantification should be in the form of a specific amount ("£x") or by reference to an ascertainable amount (eg "the new deputy's costs of the investigation and call-in proceedings as assessed by the SCCO.") If the assessment is that the loss exceeds the full amount of the bond, it will be sufficient to state that and provide for the bond to be called in for its full amount.

Finally, at paragraph 22, she held that the COP decision to call in the bond did not amount to a final determination of the former deputy's liability. The bond provider would have to pursue the former deputy in civil proceedings and establish liability in the usual way.

The next set of issues the judge dealt with concerned the rates Matrix could charge.

At paragraph 44 she held that where an order appointing a deputy who is not a solicitor simply authorises fixed costs, the starting point is the public authority rate.

At paragraph 59, she held that where an order authorises fixed costs but also authorises the non-solicitor deputy to seek a SCCO assessment, that order does not necessarily imply fixed costs at the higher rate.

At paragraph 66, she held that if a non-solicitor deputy holds multiple appointments some of which authorise remuneration at higher fixed rates, there is no implication that all appointments carry those higher rates.

At paragraph 69, she held that where the appointment order does not authorise a SCCO assessment but one is obtained anyway, such an assessment gives no authority to charge the higher assessed amount.

Lastly, at paragraph 78, she held where a deputy has an order authorising a SCCO assessment but the value of the estate falls below the PD19B £16,000 threshold, the deputy must apply to COP for authority to seek the assessment.

Comment

The ruling on the procedure to be adopted concerning the calling in of bonds is useful as it underlines that the bond is an on demand bond, paid for by P so that it would be stripped of much of its utility if COP had to adjudicate on the former deputy's liability in every case where the former deputy disputed liability.

It remains to be seen, however, how this would work in a case where the former deputy is alleged to have negligently mishandled P's affairs, eg by poor investments.

It also remains to be seen what would happen if in the later bond holder proceedings against the former deputy, it was established that P had suffered no loss.  It is, further, not altogether clear whether Senior Judge Hilder can have been correct to have held that an order calling in the bond does not amount to a final determination of civil liability on the part of the deputy, given that the terms of bonds entered into between deputy and bond provider are that the bond provider guarantees that it will pay the amount of any loss or losses as determined by the Court of Protection.  In the circumstances, it may very well be that in the proceedings to enforce recovery in the civil courts that the bond provider can proceed on the basis that this is equivalent to a judgment debt which the bond holder cannot then challenge on the basis that some other sum is owing.