The impact of Re ACC

It is nearly three years since Senior Judge Hilder’s seminal judgment in ACC & Ors (property and affairs deputy; recovering assets costs for legal proceedings) [2020] EWCOP 9 (27 February 2020) (Re ACC). While specialist Court of Protection practitioners generally have a good understanding of Re ACC, its relevance and application can be daunting for those who only have sporadic dealings with deputyship matters. The purpose of this article is to try to alleviate some of the confusion and provide practical advice in the application of Re ACC to real‑life matters. 

Background to the judgment 

The proceedings concerned three individuals, whose property and affairs deputy was in some way part of the same firm of solicitors. The common issue in each matter was whether, and in what circumstances, a professional deputy can: 

1. recover from the protected person’s assets costs which have been or are likely to be incurred in legal proceedings, and  
2. instruct a legal firm with which it is associated, and recover the costs from P.   

These proceedings arose because the court had concerns as to what the applicants considered a reasonable interpretation of ‘general’ authority. Ultimately, Her Honour Judge (HHJ) Hilder determined that ‘general’ authority is not susceptible to exhaustive definition. 

The law 

The authority of a deputy derives from the wording of the court order appointing them, and any subsequent order varying or augmenting the deputy order. The court often uses a template order, the first paragraph of which states: “The court confers general authority on the deputy to take possession or control of the property and affairs of [P] and to exercise the same powers of management and investment, including [selling and] letting property, as he has as beneficial owner, subject to the terms and conditions set out in this order.” 

In respect of a professional deputy’s costs, the standard template order provides as follows: “The deputy is entitled to receive fixed costs in relation to this application, and to receive costs for the general management of [P]’s affairs [at the public authority / solicitors’ rate]. If the deputy would prefer the costs to be assessed, this order is to be treated as authority to the Senior Courts Costs Office to carry out a detailed assessment on the standard basis.”   

The judgment 

In her judgment, HHJ Hilder considered nine questions. 

What authorisation is required to conduct litigation on behalf of P?  

HHJ Hilder determined that if the authority of a deputy is to extend to conducting litigation on behalf of P, such authority must be specifically granted. The ‘general’ authority granted in a standard deputyship order does not encompass authority to conduct litigation on behalf of P. 

What about further proceedings in the Court of Protection? 

The next question relates to health and welfare proceedings in the Court of Protection, which must be distinguished from proceedings about property and affairs. 

In HHJ Hilder’s judgment, she considered that it is appropriate and practicable that the ‘general’ authority of a property and affairs deputy is understood to extend as far as permitting an application to the Court of Protection to draw to the attention of the court a need for consideration for welfare issues. However, in her judgment, there is no basis for concluding that it should extend as far as permitting the conduct of welfare proceedings in the Court of Protection on behalf of P without specific authority. As such, a property and affairs deputy is required to obtain specific authority to conduct welfare proceedings in the Court of Protection. 

The senior judge did state, however, that where the responsible body does not take action (for example a local authority or integrated care board), there is a requirement on the property and affairs deputy to bring the need for welfare proceedings to the attention of the court (extending the decision of Mr Justice Charles in Staffordshire County Council v SRK & Anor [2016] EWCOP 27).   

To what extent does ‘general authority’ encompass authority to take legal advice on behalf of P?  

‘General’ authority does not encompass unexceptional non-contentious tasks; authority to do an act on behalf of P encompasses such ordinary legal tasks short of taking proceedings as a deputy would be expected to carry out. 

In respect of non-contentious matters, the deputy’s approach should be to ask themselves if the subject of the advice is within their authority – in other words, will their existing authority be sufficient to act on the advice if taken? If it is, then seeking advice is likely to be an ‘ordinary’ part of that function. If it is not, seeking advice is likely to be outside their authority. 

The senior judge declined to fix a financial limit to the non-contentious legal tasks within a deputy’s authority, but in any case, where the deputy is in doubt, an application should be made to the court. 

The senior judge then provided a number of specific examples which would be considered within the ‘general’ authority of a deputy. 

• Completing a tax return is within the ‘general’ authority because it is an ordinary part of managing property and affairs. Furthermore, where a person’s affairs are relatively extensive or complicated, it is ordinary and unexceptional to take advice from a tax expert about how to complete the required tax return. Seeking such advice may therefore be an appropriate step within the ‘general’ authority of a deputy.   
• Where P is a tenant, taking steps reasonably necessary to ensure that the deputy is acting appropriately in connection with the lease would be encompassed within the ‘general’ authority to manage P’s funds.   
• Where P’s affairs necessitate the direct employment of carers, the preparation of employment contracts will be encompassed within the ‘general’ authority to manage P’s funds. 

Although the conduct of proceedings requires specific authorisation, the senior judge recognised that there is scope for concluding that ‘general’ authority includes authority to take some advice in respect of some contentious litigation. A number of examples were given. 

• Where a deputy has authority to let property belonging to P, forming a view as to whether there are grounds to evict a tenant of a flat belonging to P may reasonably be considered to fall within the ‘ordinary’ discharge of that authority.   
• Whether a debt said to have been incurred by P is properly payable as being in respect of “necessary goods and services” under section 7 of the Mental Capacity Act 2005 (MCA 2005). Using P’s funds to settle his debts falls within the ‘general management’ authority and forming a view may reasonably be considered within the ‘ordinary’ discharge of that authority.

Where is the line drawn between seeking advice and conducting litigation?  

HHJ Hilder determined that it stops short of formal issue of proceedings.   

When the court considers the application for authority to conduct litigation on behalf of P, the court will need to consider some evidence of the prospects of success of the litigation.   

HHJ Hilder then considered two particular types of decisions which, although they relate to public law decisions, have an impact on P’s property and affairs. 

• Applications for continuing healthcare funding – it is within the ‘general’ authority of a property and affairs deputy to take preliminary steps (including taking advice on the merits of potential appeal) up to, but not including, delivery of the letter of appeal. The deputy should seek specific authority to conduct the appeal on behalf of P, and without it proceeds at risk as to costs.   
• Education, Health and Social Care Plans (EHSCP) – even though there may be a financial impact, the process of applying for an EHSCP is not within the ‘general’ authority of a property and affairs deputy. A property and affairs deputy should seek specific authority to take any steps in respect of challenging an EHSCP, and without it proceeds at risk as to costs. Given the short period for lodging the appeal, any application for authority to conduct such proceedings on behalf of P should clearly indicate that expedited consideration by the court is sought.

What about urgent matters?

The court cannot give any general and prospective assurance of the outcome of any application for retrospective approval; the court’s determination of applications must be made in the best interests of P.   

When making such an application for retrospective authorisation, the deputy will need to explain why a matter was so urgent that authority could not be sought prospectively. HHJ Hilder noted “there is a force in the observation that if a deputy has been able to take the urgent action, they should also be able to make the application for a retrospective authorisation hard upon its heels”. In the situation of an urgent injunction being sought on P’s behalf, the deputy should clearly indicate their exposure and seek urgent consideration by the court.   

How should conflicts of interest be addressed? 

A key part of the judgment relates to conflicts of interest, within the context of a professional deputy referring work to another department within the firm with which they are associated. Examples may be where a deputy is referring to a colleague in the conveyancing department to sell a property or litigation team to evict a tenant. Where this happens, the court felt that there is clear potential for a conflict of interest. The senior judge was not persuaded that assessment of costs by the Senior Courts Costs Office alone is sufficient protection for P against the potential for conflict of interest when a deputy instructs his own firm.   

In her judgment, the senior judge stated that a proportionate and required approach to addressing conflicts of interest is required and this is set out

in detail in the judgment. In summary, these are: 

1. Consider whether an internal referral may be needed and ask for authority as part of the initial deputyship application.
2. If no authority has been granted: 

• • Obtain three quotes for the work required, one may be from your own firm.
  • If the best interests decision is to instruct your own firm and the anticipated costs are to exceed £2,000 (plus VAT and disbursements), you will need court approval.
  • If the best interests decision to instruct your own firm and the anticipated costs are under £2,000 (plus VAT and disbursements), you must ensure you fully document your decision-making process and ensure the annual report contains a breakdown of the fees incurred.

Failure to comply with the above may be considered a potential breach of fiduciary duty.

Where costs are close to the £2,000 limit, a practitioner must think carefully as to whether it is in P’s best interests to make an application to instruct their own firm – the costs and time delay may make it disproportionate.  

What about cases where the deputy is not the instructing party? 

Specific authority is required for a property and affairs deputy to use P’s funds to pay a third party’s costs. The ‘general’ authority of a property and affairs deputyship does not encompass such a use of P’s funds.    

What about acting as litigation friend? 

To the Official Solicitor, the prospect of P paying their litigation friend for so acting “raises significant concerns”. She pointed out that such costs would be additional to the costs of a solicitor instructed by the litigation friend.   

In view of the Official Solicitor’s offer to act without charge, HHJ Hilder considered that it was not presently necessary for her to reach a reasoned conclusion as to whether a litigation friend may charge for acting as such.   

What if P has capacity to give instructions for the work in question?

If a person has capacity to give instructions for a specific piece of work, they will also have capacity to agree the costs in question.   

Making the application 

Court of Protection Practice Direction 9D sets out the procedure to be followed in respect of applications being made by existing deputies and attorneys.   

The application is made using forms COP1, COP1E and COP24, together with the court fee of £371. 

If you are making an application in relation to health and welfare, you should use forms COP1, COP1B and COP3. 

Your COP24 form is the basis of the application and depending on what authority you’re specifically seeking, you will need to adapt it accordingly. All applications should: 

• attach preliminary expert advice, for example where you are seeking authority to challenge an NHS continuing healthcare claim
• indicate any urgency to the application and any costs exposure to the applicant 
• include an explanation as to why the proposed course of action is in P’s best interests. 

When considering best interests, you should address each element of section 4 of the MCA 2005 individually, remembering there is no hierarchy or individual element of magnetic importance. Consider P’s wishes and feelings by meeting with them and if your firm has acted for P previously, consider if there is anything in the old files which indicates their past wishes and feelings but remembering your duty of confidentiality.   

Precedent wording for applications  

When drafting an application, you may find the wording in following precedents useful.

• The deputy may instruct their own firm where the deputy considers this to be in the best interests of P for the following work which is related to the property and financial affairs of P and includes (say) the sale or purchase of any property, property related issues, employment issues etc where the value of the work on that matter [within any 12 month period] does not exceed £x and which will be subject to detailed assessment in accordance with para [   ] of this order; in the event that the likely work may exceed this sum or if further authority is required then the deputy may [within x months of this order being made] apply for such further authority as may be necessary, using COP9.
• The deputy is authorised, with retrospective effect as necessary, to instruct […] to advise and assist in respect of issuing arising in connection with […].
• In order to give effect to this authority, the deputy is authorised to use funds of […] up to a limit of £[…]. (For the avoidance of doubt, this authority does not extend to the issue or conduct of proceedings in respect of […]).
• In so far as the authority granted by paragraph […] above is retrospective, the costs already incurred by the deputy shall be subject to detailed assessment by the Senior Courts Costs Office on the standard basis.
• The costs of the [deputy (as applicant)] [the parties] shall be subject to detailed assessment on the standard basis and raised and paid out of the estate of [P].
• Pending such assessment taking place, the deputy shall be authorised to pay up to 75% of the [deputy’s] estimated costs which are proportionate and reasonable taking into account the size of the estate. The deputy must include in their account (where provided) to the Public Guardian details of the payment taken on account and the final costs certificate from the Senior Courts Costs Office.
• The deputy is authorised to obtain counsel’s opinion (including by conference, and including paying the costs of attendance at such conference by […]) on matters relating to […].
• In order to give effect to this authority the deputy is authorised to use funds of […] up to a total limit of £[…].