Changes to the procedure for assessing P’s costs where P has passed away

As many of you will no doubt have seen, 13 May 2024 saw an updated practice note released by Costs Judge James and Costs Judge Whalan of the Senior Courts Costs Office (SCCO), in relation to the procedure to be adopted when P passes away.

There has been a marked departure from the previous procedure, and whilst there are positive changes that have been made in relation to the assessment of costs whilst P remained alive, with the process looking to have been simplified, there remains outstanding questions about how any “handover” costs, or costs incurred post death of P are dealt with.

This article looks to summarise and explore the changes that have been made, considers the further issues that will need to be addressed going forward and offers practical tips on how best to proceed.  This will be of interest to professional deputies, and those assisting a professional deputy.

What are the main differences?

Historically, where an independent executor has been appointed (i.e. an executor who is not the former deputy or associated with the former deputy’s firm), the SCCO would decline to assess the bill of costs of any remaining general management work, instead inviting the deputy to agree any outstanding costs with the executors or personal representatives of P’s estate.  If it was not possible to reach any agreement, the deputy would be compelled to make an application for “final directions”, which would include a provision for any remaining and outstanding general management costs to be assessed, usually on the standard basis.

If a deputy was also appointed as the executor, or was a partner within the same firm as the deputy, the Office of the Public Guardian (OPG) would consider there to be a potential conflict of interest arising.  Deputies were compelled to make an application to the Court of Protection requesting authority for their remaining and outstanding general management costs to be assessed.  It is this latter guidance that has, in my experience, caused some degree of confusion between the COP, OPG and SCCO generally.

So, now under the new Practice Note, any costs incurred during P’s lifetime can and will be assessed by the SCCO under the terms of your deputyship order.  This is good news for practitioners and to quote the practice note “Deputies do not, even for costs incurred during P’s lifetime, need to obtain a further Order once P has died before they can seek SCCO assessment.  This is additional, and unnecessary, work for the deputy and the COP, and the deputy will not be paid for this work”.

A clear indication here that any costs associated with an application made for these costs to be assessed will not be paid.  One would also presume that any deputyship costs incurred during P’s lifetime will have to be assessed (with the option of agreeing any outstanding costs with the executor presumably falling away).

As I have said, good news for practitioners.  Here comes the “but”…..!

So, what about my post death costs?

Inevitably there will be a period following P’s death whereby the deputy is required to “handover” details of P’s estate, current assets, liabilities etc, to the instructed probate lawyer.  Historically, such costs have been recoverable from P’s estate.  At A&M, we have always been very careful to separate the costs pre and post death, to enable the SCCO to readily identify those ongoing general management costs and those costs incurred post-death.

In my experience, I have always found such costs to be relatively modest, however, sometimes these sums can be more considerable, depending upon the size, value and complexity of P’s estate.

We await further clarification from the SCCO or Court of Protection in relation to this issue.  However, and again to quote the Practice Note “The SCCO is not in a position to issue guidance to practitioners on how to go about recovering costs incurred after P dies”.  We are going to be attending an upcoming meeting, hosted by the Association of Costs Lawyers, later this month (or perhaps early next) to seek some further clarity on these issues and we hope to be able to report back within further updates we provide you.

In the meantime, the best advice we can offer is to consider that transparency is key.  We would recommend opening a dialogue with your client as and when appropriate to advise them in relation to your charges you might wish to seek from P’s estate and with their agreement in relation to any post-death costs.  We would also recommend these costs be kept to a minimum, insofar as possible, given the uncertainty around these issues.

The two further issues to consider are i) what will happen to any post death costs where the deputy is appointed as executor and ii) given the provision of COP Rule 19.11, which states “An order or direction that costs incurred during P’s lifetime be paid out of or charged to P’s estate may be made within six years of P’s death” , this would indicate the Court of Protection may not be inclined to make an order or direction or would not be able to do so, by virtue of this rule.  However, there remains the argument that rule 19.2 does provide recourse for these costs to be incurred, as it is arguable that such work constitutes dealing with P’s finances and affairs, albeit in handing over their affairs.

As detailed above, this new Practice Note goes some way to providing some clarity to practitioners with regard to costs incurred whilst P was alive and the deputyship was still “active”, however, there are further queries that arise regarding any costs incurred after P has passed away.

We will keep you posted as to any further developments regarding these issues.

We do hope you found this article and updated information useful.  As ever, we are always on hand to answer any further queries you might have in relation to these matters, so do please feel free to contact our friendly, helpful and professional team.

Paul Cruickshanks, Head of Court of Protection

22.05.2024