Masthead Local Govt - Adult Social

Deputyships and outsourcing

Cutbacks iStock 000013353612XSmall 146x219The Court of Protection recently considered an application to revoke a number of deputyships in place through a council's outsourcing arrangement and whether the borough could recover its costs. The COP team at 39 Essex Chambers reports.

In the case of Public Guardian v Matrix Deputies Limited and London Borough of Enfield [2017] EWCOP 14 (Senior Judge Hilder) the Public Guardian made applications in respect of the deputyships (some 44) of Matrix Deputies Limited (and two of its former employees). The Public Guardian sought revocation of the orders and refusal of appointments in pending cases.

The case concerned deputyships in the London Borough of Enfield that had arisen out of an outsourcing arrangement between the borough and Matrix. The allegations were serious. Broadly they were:

a. Excessive fee charging: fees were charged to individuals in excess of what the deputyship appointment permitted and/or irrespective of work actually done by the deputy;

b. Inappropriate/inadequate arrangements for holding/recording client funds and transactions: all clients' funds were held in a single account, with unexplained discrepancies between closing and opening balances, inconsistencies with reports submitted to the Public Guardian and no clear record of individual balances;

c. Conflicts of interest arising from inappropriate relationships with other bodies: individuals held positions in both Matrix and another company, or were family members of key personnel in those other companies, whose services were engaged to provide services to individuals at considerable cost and without appropriate evidence of competitive tendering and best interests decision making;

d. Failure to provide information requested/comply with orders for disclosure: the response to the February 2016 order for disclosure was insufficient for the completion of investigations such that a further application to court, and a second report, were required.

The two individuals agreed at relatively early stages to orders in respect of their deputyships but Matrix continued to contest the applications until, after 20 months litigation, it agreed that their deputyships should be revoked and no further ones made.

Given that Matrix admitted some allegations that were serious in themselves, namely taking commissions from estate agents on the sale of three properties and they only gave full disclosure after the court had made an order permitting entry on their premises to obtain documents, the concession was probably inevitable.

That left the issue of costs. The borough sought its costs from Matrix on the indemnity basis, Matrix argued for no order.

The Judge set out the relevant law from R (Boxall) v Waltham Forest LBC (2001) 4 CCL Rep 258 QBD (Admin), where Scott Baker J confirmed that the court has power to make a costs order when the substantive proceedings have been resolved without a trial, but when the parties have not agreed about costs; specifically in relation to compromised cases…he observed that:

at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.

This principle had previously been applied to COP proceedings by Cobb J in JS v KB & MP [2014] EWCOP 483 at paragraph 13.

Senior Judge Hilder held that the admitted conduct and the failure to disclose, together with the fact that the application was wholly successful justified a departure from Rule 159 of the COP Rules (see paragraph 39). She ordered Matrix to pay the borough’s costs.

Senior Judge Hilder then considered whether those costs (which amounted to £250,000) should be paid on the indemnity basis. At paragraph 42, she held the Matrix’s conduct had been wholly out of the norm justifying an award of costs on the indemnity basis.

Comment

Costs orders against parties are unusual in the COP. Where, as here, a paid deputy defaults and then obstructs the court’s process, clearly an order for costs is justified. Defaulting deputies should not believe that they can have a free ride in this respect.

This article was written by the Court of Protection team at 39 Essex Chambers.

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