IN THE HIGH COURT OF JUSTICE
SUPREME COURT COSTS OFFICE
Clifford’s Inn, Fetter Lane
London, EC4A 1DQ
Before :
MASTER O’HARE, COSTS JUDGE
Between :
IN THE MATTER OF LEIGHANNE RADCLIFFE
Mr Joyce (instructed by Brooke North) for the Receiver
Hearing date: 20 July 2004
JUDGMENT
Master O’Hare
In this case the patient suffered severe head injuries in a motor accident. At some stage the Chief Executive of the Public Guardianship Office (the PGO) acted as Receiver for her pursuant to an Order of the Court of Protection. In the summer of 1992 the PGO was winding-down its role as acting as receiver and sought to arrange the appointment of solicitors and others on its panel to act as receiver in its place. Mr Gordon Watson of Messrs Brooke North was one of the panel receivers. In order to obtain an appointment as receiver in this case he was required to provide security in the sum of £25,000 which he did by using a simplified arrangement the PGO had made with HSBC Bank. On payment of a premium of £71.50 (due annually and payable from the patient’s money) Mr Watson obtained the endorsement of a Master Bond which supplied security to the Court of Protection should he "fail to carry out the duties stated below". Paragraph 2 of the Master Bond is as follows:
"The duties of the receivership covered by the Master Bond are as follows:
to account for the rents and profits of the patient’s real estate;
to account for the patient’s personal estate and the profits and income thereof;
to observe and perform all orders and directions of the court concerning the patient and the patient’s estate;
to deliver accounts to the court as and when required to comply with the directions of the court as to any balance on the examining, auditing and checking of those accounts;
to be responsible for the good repair and sufficient maintenance and insurance of any houses or buildings of the patient’s so far as the means of the patient allow;
to arrange safe keeping of all deeds or documents or title or other documents relating to the estate of the patient and any other valuable items belonging to the patient which are in the possession or under the control of the receiver;
to deal with the patient’s tax affairs;
claim any entitlements and benefits to which the patient is entitled;
to act as a careful and faithful receiver of the estate of the patient."
By Order dated 14 August 2002 the Court of Protection discharged the Chief Executive of the PGO from the receivership and appointed Mr Watson in his place. That Order concluded as follows (paragraph 7):
"Any costs of general management not already directed to be taxed are to be assessed and the Receiver is to apply for directions as to payment of the certified amount thereof."
Mr Watson’s entitlement to charge profit costs in the receivership derives from an order dated 6 January 2004, the text of which I will set out later.
Mr Watson first received a sealed copy of that Order on 11 March 2003 when it was enclosed with a letter from the Public Guardianship Office dated 7 March 2003 giving details of the patient’s assets and income. The patient is entitled to certain national insurance benefits and the income from cash held by the Receiver (approximately £120,000) and the income from a portfolio of investments managed by Gerrard Ltd, a member of the London Stock Exchange. The letter dated 7 March 2003 also stated the patient’s outgoings including details of her gas, electricity and telephone accounts and accounts concerning taxis and domestic cleaning.
The bill of costs in this case is Mr Watson’s costs for general management in the period 14 August 2002 to 13 August 2003. It was submitted to the SCCO for assessment on 18 February 2004 and provisionally assessed by Costs Officer Sainthouse the next day. Mr Watson did not accept the provisional assessment and the matter proceeded to a formal assessment (conducted by way of exchange of letters) which was completed on 16 March 2004. Subsequently Mr Watson obtained permission to appeal against Costs Officer Sainthouse’s decision after the expiry of the relevant time for appeal and the appeal was listed for hearing before me on 20 July 2004. That hearing was conducted by telephone at which Mr Watson was ably represented by Mr Joyce. Shortly thereafter Mr Joyce caused the relevant correspondence files in this case to be sent to me. What follows is my decision on the basis of the submissions made at the telephone hearing and my perusal of the correspondence files in this matter. Before setting them out I shall first summarise the two matters raised in the appeal and the relevant parts of the decision made by Costs Officer Sainthouse.
COSTS OFFICER SAINTHOUSE’S DECISION
There are two aspects of the decision made by Costs Officer Sainthouse which were challenged in the appeal hearing before me: communications and discussions between Mr Watson and his employee Ms Butterworth, and time spent on letters said to enclose simple invoices and payments thereof. These decisions led Costs Officer Sainthouse to disallow item 1 in the bill (4 letters written by Ms Butterworth to Mr Watson) and to reduce from 6 minutes each to 3 minutes each 47 letters claimed in the bill. Her decisions on both points also explain, or partly explain, the reductions she made to the documents item in which she disallowed 2.1 hours of Mr Watson’s time, 3.7 hours of Ms Butterworth’s time and 0.4 hours of another fee earner’s time.
In respect of communications and discussions between Mr Watson and Ms Butterworth, Costs Officer Sainthouse followed the decision I had made in a case I heard in December 1998, In the Matter of Garylee Grimsley. In that case I disallowed claims in respect of discussions between a solicitor receiver and his junior employee on the basis that:
"for the purposes of claiming costs in this bill Mr Baker, [the junior employee] is treating Mr Pickering [the solicitor receiver] as if Mr Pickering were a lay receiver who had instructed Irwin Mitchell [his firm] to act as his solicitor."
In Garylee Grimsley I also disallowed costs relating to some 22 memos passing between the two fee earners, 11 sent by the solicitor receiver and the remaining 11 sent by his junior employee. I disallowed all of these on the basis that:
"They all amount to inter-office liaison which has not added anything of value to the legal services provided by Irwin Mitchell. Had Mr Pickering been a lay receiver I would still have disallowed the 11 memos sent by him. Claiming memos in as well as memos out is patently wrong, see SCCO Practice Direction No.2 of 1992 para 1.8."
When reducing from 6 minutes each to 3 minutes each the time allowed in respect of letters enclosing invoices, Costs Officer Sainthouse relied on another decision of mine made in November 2002, In the Matter of Jamie Walker. It is convenient to quote ten paragraphs from my judgment in that case:
"PAYMENT OF ROUTINE BILLS
The bills in question here include routine water bills, electricity bills, telephone bills, satellite TV bills and the like. The payment of such bills does not usually require professional assistance and therefore Rule 90 of the Court of Protection Rules 1994 prevents a Solicitor Receiver claiming remuneration for such work "unless authorised by the court". In this case the Receiver is so authorised by para 8 of the first general order dated 2 October 1998 which states as follows:
"The Receiver is authorised subject to taxation to be paid solicitor’s costs in respect of the work done by him as Receiver."
The question which I have to decide is what cost is a reasonable cost for the solicitor to claim for such work. In this case most of this work was delegated to a senior legal clerk who wrote some 133 letters during the period covered by this bill. Upwards of 50 of them were letters settling routine bills along the following lines:
"Please find enclosed our cheque for £x in payment of your attached invoice. Please be kind enough to acknowledge receipt."
In respect of each such letter the bill claims one tenth of the senior legal clerk’s hourly rate which, with mark-up, amounts to £10.50. On page 7 of the bill, under the title preparation, collation, perusal and consideration a further claim is made at the hourly rate appropriate to a partner as follows:
"In addition to the above we estimate that we have spent further time generally looking after the matter. During the course of this year of general management a great deal of money was spent to keep the needs of the patient. The total time engaged – 1 hour at £90.00 per hour [plus mark up of £45]."
Costs Officer Masters disallowed each of the 6 minute units claimed. In a note of his decision dated 17 August 2001 he explains:
"You have claimed and I have allowed estimated time for a partner to consider the invoice. Any telephoning the bank or requesting the court for additional funds has been claimed within other items of the bill and allowed, any copying of invoices is not fee earner work. It is also noted that some letters to the same supplier are sent only one or two days apart or even on the same day, and in my opinion it is an unreasonable expense to the patient to allow a claim for a covering letter to go with the invoice and payment."
At the hearing before me Counsel explained that the writing of such letters involves the following work:
check that the invoice is correct;
check the file to ensure that the invoice has not already been paid (it is a wise practice to respond to invoices quickly to prevent repetitions);
check that sufficient funds are in the account, if necessary telephoning the bank;
writing the cheque and getting it signed;
writing the appropriate letter, requesting a receipt; and
subsequently checking the receipt and filing it.
The file will also include a copy of the letter and a copy of the original invoice, these documents being useful in file management later.
Like Costs Officer Masters I do not think that all of this work is properly regarded as fee earner work, in particular, items (ii), (iii) and (iv). Unlike Costs Officer Masters I do accept that it is reasonable for the solicitor to have a letter prepared to accompany each such payment. The letter is a convenient record of the transaction for the file. The letter is also treated as an instruction to the Accounts Department to prepare a cheque for the sum mentioned under the supervision of the partner or other fee earner who signs the cheque.
However, it does not follow that it is reasonable to allow 6 minutes for each such letter. Presumably the 6 minute unit is taken from the Costs Practice Direction, two paragraphs of which I should quote:
Routine communications are letters out, e-mails out and telephone calls which because of their simplicity should not be regarded as letters or e-mails of substance or telephone calls which properly amount to an attendance ...
The following provisions relate to work done by solicitors:
Routine letters out and routine telephone calls will in general be allowed on a unit basis of 6 minutes each, the charge being calculated by reference to the appropriate hourly rate. The unit charged for letters out will include perusing and considering the relevant letters in and no separate charge should be made for in-coming letters."
As is plain the 6 minute unit is intended as a composite to cover all short letters. In a litigation file some of the letters will be as short as the letters in question here, others will require more work but still attract only a 6 minute allowance.
Where the volume of bill paying letters is high I do not think it appropriate to apply the general 6 minute allowance to each of them. From the fee-earner’s point of view, having checked the invoice in his or her post for that day, the instruction to the secretary will often be no more than "also please, send payment letters to BT for £x and Yorkshire Electricity for £y etc, I have put the invoices in the file." In my judgment an allowance of 3 minutes per letter is more than sufficient. Most of that allowance relates to items (i) and (vi), perusing letters in.
In making that allowance I would disallow the extra time estimated for "generally looking after the matter". In Counsel’s submission there was no direct link between this item and the payment of these invoices. The one hour might equally relate to other "money ... spent to keep the needs of the patient" during the period in question, such as purchasing his flat. I do not accept that. On this part of the appeal I shall therefore allow it in part by restoring half the sum disallowed by Costs Officer Masters but shall also reduce the preparation time by the estimated 1 hour of partner’s time."
In returning the bill as assessed by her Costs Officer Sainthouse also sent Mr Watson copies of the judgments she referred to, Garylee Grimsley and Jamie Walker. When listing the appeal for hearing I caused further copies to be sent together with a copy of another decision of mine which went on appeal to Mrs Justice Arden in 1999, In the Matter of Tina Jayne Cloughton. In that case, like this, the patient suffered head injuries in a road accident. The person appointed by the Court of Protection as Receiver was Ms Wright, a solicitor who specialised in personal injury litigation and who had the conduct of the patient’s compensation claim against other persons involved in the road accident. Following the making of a consent order for a sum exceeding £1 million, the Receiver travelled to an interview with the patient and her mother. The interview was also attended by a junior fee earner, Mr Baker, who was then and still is a specialist in Court of Protection work. I did not accept that specialist litigation advice was needed at that interview and held therefore that Mrs Wright attended the meeting in her role as Receiver.
"I take the view that a professional Receiver, such as Ms Wright, can and indeed in many cases should delegate suitable tasks to colleagues and employees. So long as such delegation is reasonable and will save costs rather than increase them, the professional receiver and her colleagues and employees should be regarded as inter-changeable. However a professional Receiver must be careful not increase her claim for costs by duplicating work done by herself and her staff.
In my view the interview with the client did not merit the attendance of two solicitors, the Receiver and Mr Baker. Nor do I think it would be right for me to allow Mr Baker’s time as a notional allowance in respect of time which a Receiver not expert in Court of Protection work might otherwise have had to spend in order to research points likely to be raised at the interview. In my judgment such research would not be reasonable: see R v Legal Aid Board ex p. Bruce [1991] 1 WLR 1231."
On 9 November 1999 Mrs Justice Arden heard an appeal from my decision assisted by two assessors including Master Campbell. The appeal was dismissed. In his note of the decision, a copy of which has already been supplied to Mr Watson, Master Campbell stated:
"Arden J upheld the decision of the Costs Officer and the Costs Judge. She found that Mrs Wright was using Mr Baker as a resource for her own purposes. In essence he was filling and replenishing her own stock-in-trade. That was an overhead expense and not something that could be charged to the client (see R v Legal Aid Board ex p. Bruce [1991] 1 WLR 1231).
The Judge also rejected the proposition that "client care" aspects justified Mrs Wright’s attendance in order to effect a handover of the case to the Court of Protection specialist at the conclusion of the litigation. Handover costs were an item of "client care" for which the solicitors could not charge the patient."
It is convenient to set out here a passage from the judgment of Lord Donaldson of Lymington MR in R v Legal Aid Board ex p. Bruce which I relied on in my decision and I assume Mrs Justice Arden also relied on.
"Solicitors, like barristers and Judges, are not to be expected to carry a knowledge of all the law in their heads. They have to consider rules, regulations, text books and authorities or get others to undertake the research for them. If the problem is difficult or outside the scope of their experience, they will wish to discuss it with others who are more qualified (whether professionally or otherwise) and in some circumstances may have to remunerate those who they consult. But knowledge of the law, however acquired or recalled, is their stock in trade just as the professional ability to ascertain and record physical features involved in a boundary dispute or to ascertain how a builder has done his work and whether this is in accordance with good practice is a surveyor’s. In so far as expenses involved in added to or replenishing this stock in trade, it is an overhead expense and not something which can be charged to the client …"
SHOULD A PANEL RECEIVER’S COSTS BE LIMITED TO LEGAL COSTS?
At the hearing Mr Joyce argued that my previous decisions should no longer be regarded as good law given the change in practice at the PGO. In his submission receivers are now expected to undertake all the duties previously performed by the Chief Executive of the PGO when acting as a receiver, including administrative tasks such as supervising his delegates and indeed writing letters, paying bills and other accounts. He argued that this wider role must carry with it an entitlement to wider remuneration. He said that, not to allow panel receivers payment for all the work they must now do when acting as receiver will undermine the switch in responsibility from the PGO to them.
I am in no doubt at all that, in order to deal properly with the patient’s financial affairs, solicitor receivers are duty bound to keep an eye upon the patient’s lifestyle and to get involved with the minutiae of the patient’s living expenses. The "Receiver’s Handbook" published by the PGO describes a receiver’s duties as follows (pages 8 – 9):
"Some important responsibilities and duties come with the role of receiver. We include them here as a comprehensive check list. They are dealt with in greater detail elsewhere in this booklet.
You have a duty to:
act in the best interest of the client at all times;
look after the client’s property;
open a receivership account;
claim all benefits that are due to the client;
take out insurance which covers the client’s income and spending during your receivership;
prepare accounts every year or whenever the court needs you to;
make sure the client’s money is being used to give him or her the best possible quality of life;
make sure all income is collected and all bills are paid on time;
keep all important documents and other valuable items in a safe place;
keep any property secure, in a reasonable state of repair, and adequately insured;
deal with the client’s income tax and other tax matters;
tell us about any changes in the client’s financial situation, for example, if he or she inherits any property or money;
tell the DVLA if the client holds or applies for a driving licence;
tell us if there is a likelihood of the client getting married, divorced or involved in other legal proceedings;
tell us if the client is planning to make a will;
co-operate with any Lord Chancellor’s Visitor;
get our agreement before dealing with any savings or investments;
tell us if there is the possibility of the client recovering;
tell us if the client dies;
tell us about any changes in the client’s address and accommodation fees;
keep to all orders and directions the court makes;
pay the relevant PGO fees from the client’s funds when necessary."
In respect of the patient’s accommodation the PGO Handbook states as follows (page 24):
"A client may live with a family member who is not the receiver. In this case, you must make regular payments to the person who is responsible for the care of the client, to make sure the client’s needs are met.
If the client lives alone in his or her own home, you should pay all outgoing costs such as Council Tax, and gas and electricity bills. You must also give the client regular money for food, clothing and so on. In some cases you may want to give the client small amounts of cash or, if the client is able, open a small bank account for the client to use themselves."
Persuasive as his arguments were, I do not accept Mr Joyce’s assertion that the role of solicitor receivers today is different from what it used to be. In my judgment solicitors who accepted appointment as receivers have always had to undertake some responsibilities for which they might not be remunerated in order to obtain the right to undertake the work which is remunerated. In my judgment the winding down of the role of the PGO as receiver has merely increased the volume of work available to solicitors. It has not changed its nature.
My researches made after the hearing have brought to light the "Handbook for Receivers" published by the Public Trustee Office in September 1993. This document provides support for my finding that solicitor receivers today are not in any relevant way different from solicitor receivers appointed some years ago. Pages 8 – 11 of the booklet state as follows:
Maintenance and care of the patient
How are the ordinary day to day living expenses of the patient provided for?
It is usual to authorise a Receiver to spend as much as is necessary of the Patient’s income (after making all other payments in connection with the receivership) in maintaining the Patient and providing him or her with clothing and extra comforts. Sometimes, more often when the patient is in a private nursing home or residential accommodation provided by the local authority it is also necessary to use capital, and authority to do this must be sought from the Protection Division. Although the accommodation, care and treatment of the patient are matters to be decided upon by the near relatives of the patient in consultation with his or her medical attendant, it may be unwise for the patient to be moved to private accommodation at a cost which would be likely to exhaust the patient’s resources during his or her lifetime. In considering the patient’s circumstances, you should bear in mind that once a patient is discharged from the National Health Service accommodation, he or she may be entitled to an attendant allowance or other Social Security benefits.
It is your duty to ensure that the patient receives all the Social Society benefits which he or she is entitled to and it is equally important that the court is advised of any change in the patient’s accommodation and of its cost.
Are there any matters to remember about the various kinds of accommodation occupied by patients?
There are basically four kinds of accommodation.
National Health Service accommodation
Many patients are accommodated in National Health Service Hospitals and although they are maintained without charge, Social Security benefits are reduced after the patient has been in hospital for a year to a minimum statutory amount.
The total amount of the patient’s net income is often very much more than this and it is your duty, within the limits of the patient’s resources generally, to ensure that the patient’s reasonable requirements in the way of "extras" (comforts, clothing, outings, holidays and so forth) are met and it is left to your discretion to make whatever arrangements you consider to be appropriate. Hospital authorities will usually give helpful advice with regard to such arrangements. You should invest any surplus income for the patient’s benefit.
Private nursing or residential homes
Where the patient is in a private nursing or residential home, it is often necessary to resort to the patient’s capital to meet the charges. It is the court’s usual practice to make capital available on an annual basis, but sometimes more frequently depending on the amounts involved. Whilst it is your duty to ensure that the fees are regularly paid and the patient is provided with adequate extra comforts, the court must be given good notice if any capital will be required to be raised or if there is any likelihood of a point being reached when the removal of the patient to less expensive accommodation becomes necessary.
Residential accommodation provided by the local authority
This type of accommodation is provided by local authorities under Part 3 of the National Assistance Act 1948 and when the patient enters the accommodation it is necessary to disclose his or her resources, so that the local authority may assess the patient’s liability to contribute towards the costs of maintenance. In making their assessment, the local authority disregards certain items, including the statutory amount required for pocket money. You should apply to the local authority, as the capital is gradually reduced, for a fresh assessment of the patient’s liability until the statutory minimum amount of capital is reached. At this point, the patient becomes liable only for the minimum charge. You should satisfy yourself that the assessment is correct before making payment but if you are in any doubt, you may consult the Protection Division.
Patient living at home
Sometimes the patient may either be living in his or her own home or with a member of his or her family, who may not necessarily be the receiver. If the patient is not living with you, you should ensure that regular payments are made to the person having the care of the patient to comply with whatever arrangements have been made. Otherwise, you should pay whatever outgoings are necessary in connection with the property occupied by the patient and also see that he or she is provided with regular sums for maintenance. This can sometimes be done by making arrangements with a local bank for a sum to be handed over the patient on a weekly basis. Obviously patients should not be allowed to over spend but on the other hand all reasonable requirements having regard to their means, should be met.
Accommodation and Health of the Patient
What the receiver’s responsibilities regarding these matters?
These are matters where patient’s own wishes, if they are capable of expressing them, must be considered in conjunction with those of their nearest relatives and the advice of their medical attendants.
If the patient is not already in a hospital, nursing or residential home or accommodation provided by a local authority and it is considered that he or she needs care and treatment of that kind, help and guidance should be obtained from the patient’s own doctor, or, if this is not practicable from the Social Services Department of the local authority.
The patient’s doctor or the Social Services Department should be consulted whenever you feel in need of advice on any matter connection with the accommodation, care and treatment of the patient."
Accordingly, I remain of the view I have previously expressed that a solicitor receiver is not entitled to treat himself as if he were a client of his own firm.
On the question of inter office communications and discussions, I rely upon the well known principles explained by Mr Justice Mustill (as he then was) in R v Sandhu, 29 November 1984, reported in the Lord Chancellor’s Department’s Taxing Compendium. That case concerned costs governed by the Legal Aid in Criminal Proceedings (Costs) Regulations 1982. The Determining Officer had disallowed all costs claimed in respect of "supervision of staff with regard to conduct of the case, allocation of counsel, listing difficulties, use of enquiry agents, evidence and other relevant matters." One reason given for that decision was that supervision was not mentioned as an express item of costs in the relevant Regulations. One type of work which was mentioned was "preparation". Mustill J held that certain supervisory work might be recoverable under the head of "preparation". Since the text of that decision is not widely available I shall quote from the transcript at some length:
"Certainly [the relevant Regulation] creates an exclusive code for the ascertainment of the type of work which may properly be allowed. This does not mean, however, that nothing except what is explicitly described in the various sub-paragraphs can be claimed … Thus the fact that supervisory work of the type performed by the senior solicitor in this case cannot be fitted within any of the activities described in [the relevant Regulation] does not mean that no fee can be allowed in respect of it. What matters is whether it constitutes "preparation". If it does, then the Determining Officer can and must allow, under [the relevant Regulations] such fees in respect of it as he shall consider reasonable.
Plainly there are many considerations which the Determining Officer will have to bear in mind when deciding how to exercise his discretion. It would be undesirable to attempt in this judgment to lay down any fixed principles, or even to provide illustrations of what may or may not properly be allowed in taxation. Everything will depend on the circumstances of the individual case. It is sufficient for present purposes to say that –
many items of what may loosely be called supervision will not fall within the framework of the Regulations at all. Every senior solicitor will wish to keep an eye on what is going on in his office, to make sure that it is operating efficiently, and that the standards set by the senior solicitor, who bears the ultimate responsibility for the proper conduct of all work carried out by the practice, are being scrupulously maintained. Again, a senior solicitor who has proper regard for his broader responsibilities will find it necessary to discuss matters with his more junior staff, as a method of practical instruction, with a view to making them better fitted to perform their allotted work. Very often in both of these spheres the solicitor may occupy some time on a particular case. It would not, however, by any means necessarily follow that this time would be attributed to the preparation of that case, so as to entitle the solicitor to remuneration under [the relevant Regulation]. It would simply be part of the overhead expense incurred by the solicitor in the proper conduct of his practice.
The Determining Officer could properly have regard to the nature of the case and to the grade of fee earner whose time is claimed for elsewhere in the bill when deciding whether it was reasonable for time to be spent by the senior solicitor on supervisory work. There must be many cases where, once the case has been allocated to a fee earner of the appropriate grade he or she can be allowed to carry on the work unaided, without any need for intervention by someone more senior. On the other hand, there may equally be cases where, if and when the matter is in the hands of someone who could ordinarily be considered competent to deal with it, there might be an unexpected turn of events where the senior solicitor’s extra experience and weight would be an essential reinforcement. Unqualified rules cannot be laid down …
The Determining Officer can reasonably expect the senior solicitor to provide an explanation of the reasons why the nature of the case made his participation necessary; and of the occasions, duration and circumstances of such participation. Without such particulars, the Determining Officer might well consider that where an allowance has been claimed for a fee earner of a particular grade, there was no case made out for a further allowance in respect of someone more senior."
In my judgment it is always, or almost always, inappropriate for a claim to be made for letters sent by for one fee earner to another fee earner in the same firm. The allocation of tasks between them is part of the irrecoverable overhead of the firm. If the senior fee earner needs to be informed of some aspect of a matter he should simply read the relevant attendance notes when the file is sent to him.
In my judgment it is sometimes, but only rarely, appropriate for claims for costs to be made in respect of discussions between fee earners. I have disallowed all costs claimed for discussions between Mr Watson and Ms Butterworth save for the four items mentioned below. The disallowed items were discussions of routine matters only, not requiring the involvement of Mr Watson. They fall within the paragraph numbered (1) in the passage I have cited from R v Sandhu.
In one case (26.03.03) I have allowed a reduced amount of time on behalf of Ms Butterworth to take the place of an attendance note she might have prepared. On another occasion (08.05.03) I have allowed Mr Watson’s time for considering an important matter but not Ms Butterworth’s time: she should have referred this matter to him without further ado. On two occasions (29.04.03 and 13.06.03) I have allowed in full the time claimed by both Mr Watson and Ms Butterworth. Both of these concerned what Mustill J described as "an unexpected turn of events where the senior solicitor’s extra experience and weight would be an essential reinforcement".
As to costs claimed in respect of short letters making bill payments, I remain of the view that, in the general case (not this case) such costs are not recoverable because of rule 87 of the Court of Protection Rules 2001. This rule is headed "Costs of unnecessary employment of solicitor etc not to be allowed" and states as follows:
No receiver for a patient, other than the Official Solicitor, shall, unless authorised by the court, be entitled at the expense of the patient’s estate to employ a solicitor or other professional person to do any work not usually requiring professional assistance …"
If a lay receiver cannot charge for paying bills such as routine gas and electricity bills, nor can he or she delegate the task to a solicitor and recover the costs that way unless expressly authorised, I do not see why any solicitor who is a receiver should be able to do so unless expressly authorised. I note that the PGO Receiver’s Handbook quoted in paragraph 15 above suggests the receiver should pay such bills "If the client lives alone …". Presumably, in other circumstances the solicitor can leave most of this task to an adult with whom the patient lives and in whose care he or she is.
In this particular case I have reached the conclusion that Mr Watson has been authorised to claim costs for work by him or his delegates which does not usually require professional assistance. The authorisation I have in mind is the order dated 6 January 2004 and sealed on 19 January 2004 which states as follows:
"Mr Gordon Watson of Brooke North solicitors … the receiver in the matter is AUTHORISED to have his costs for general management for the period 14 August 2002 to 13 August 2003 assessed on the indemnity basis by the Supreme Court Costs Office and the receiver is to apply to the court for directions as to payment of the certified amount thereof."
At the hearing last July I indicated to Mr Joyce that I did not think any order disapplying Rule 87 had been made in this case. It must be said the order dated 6 January 2004 does not make it abundantly clear that Rule 87 is not to apply in this case. I no longer take the view I expressed at the hearing because, in the course of the researches I have made since then, I have located a Practice Note of August 11 1995 which I believe is still in force. The full text of the Practice Note is set out in Volume 2 of the White Book at paragraph 6B-156. I shall set out below a passage from the final paragraph:
"If the receiver is a solicitor, costs are allowed for the whole range of receivership duties, subject to detailed assessment, and there is not need for him or her to seek authority under r87 …"
There is no doubt that a Practice Note, even if issued by the Master of the Court of Protection and the Chief Taxing Master, has no power to override Rule 87 of the Court of Protection Rules (cf A Local Authority v A Mother and Child [2001] 1 Costs LR 136). However, the Practice Note does, it seems to me, indicate the way I should interpret the order dated 6 January 2004. That order authorises him to make the same charge for his time he would have made had he been instructed by a lay receiver. If a solicitor is instructed to undertake these tasks for a lay receiver he would be entitled to charge lay receiver for it if he had first warned him of the costs consequences if he does not undertake them personally. Where a professional receiver is appointed there is no-one to whom that warning can be given. The Practice Direction of 1995 indicates to me that, because this is so, the standard practice of the Master of the Court of Protection is to disapply Rule 87 in most cases in which a professional receiver is appointed.
But for the Practice Direction of 1995 I would have disallowed all costs claimed in this case for short letters making bill payments. If, in respect of other cases, the Practice Direction of 1995 is subsequently altered, the practice of the Costs Office will alter accordingly.
HOW MUCH TIME TO ALLOW IN RESPECT OF SHORT LETTERS PAYING BILLS
At the hearing Mr Joyce did not attempt to persuade me that my decision in Jamie Walker was wrong. Instead he sought to distinguish it by pointing to a further step not mentioned in that case which ought to be taken into account when deciding what time to allow. Thus, whilst he accepted that the mechanics of paying routine bills might not justify more than 3 minutes an additional task, in this case delegated to Ms Butterworth, was to consider whether the invoice should be paid and to cross check it against others in order to determine whether the patient was exceeding her general level of expenditure. In his submission this responsibility was something to be valued in addition to the items allowed in Jamie Walker. He gave the following examples. (1) Whilst normally the patient’s taxi bill was around £50, on one month it was £178. (2) On one occasion the patient ordered a painting from a shop called the White Rose Gallery and simply directed the invoice to the receiver. (3) Another example given concerned correspondence with a hotel, the Holiday Inn in connection with a visit the patient made.
In my judgment the additional responsibility described does not justify an increase in the allowance for the letter paying the bill. If in a particular instance the bill in question is such as to be out of the ordinary or calling for comment, such a comment will be made by means of a letter or telephone call to the patient. The allowance of six minutes for that communication includes something in respect of considering the bill in question. It is right to point out also that, another method commonly used to control expenditure is to impose a budget upon the person supplying the goods or services. That person can be invited to check with the solicitors before exceeding a stated amount.
Because of the examples given, I felt it necessary to reconsider the whole of the correspondence files in this case and I apologise again for the length of time it has taken me to do this. Of the examples relied upon by Mr Joyce, I find against him as to the first two: all of those letters except the first written to the taxi company are short letters paying bills. I find in his favour in respect of the letters written to the Holiday Inn: these do merit the usual allowance of six minutes each.
Of the letters claimed, Costs Officer Sainthouse allowed 123 at full rate and 47 at half rate. I propose to allow 121 at the full rate and 51 at half rate. It will be observed that, although I found more of the letters to be at half rate, I also found more letters in total (172 against the 170 found by Costs Officer Sainthouse). The dates of most of the letters found by me are shown in an appendix to this judgment.
CONCLUSION
I have found against the receiver on both of the points of principle raised on this appeal and therefore I have dismissed the appeal in substance. However, because of the small changes I have made in the costs allowed in respect of letters and time spent on documents the final costs certificate to be issued in this matter will show the figures as allowed by me not as allowed by Costs Officer Sainthouse. My present view is that I should not increase that certificate so as to allow the receiver’s costs of the appeal but I will hear argument upon that if so requested.
The time I have allowed on documents is three hours for Mr Watson, seven hours for Ms Butterworth and 0.6 hours for the third fee earner. More details of the costs I have allowed are shown in red ink on the copy bill sent to the receiver with this judgment. The net result is that my final figure is £272.90 (ie, £232.25 plus VAT) less than the final figure Costs Officer Sainthouse arrived at.
END
JOH\Leighanne Radcliffe