Court of Protection and conveyancing – a guide for practitioners
This is the second time I have written this article, the reason being that the position changed dramatically in the intervening time.
At the start of May, the Office of the Public Guardian (OPG) circulated to Court of Protection practitioners a new guidance note to update the way we deal with the conveyancing process on behalf of our Court of Protection clients ’P’. This stated:
All professional deputies are to provide evidence in the annual reports of compliance with the below position, therefore please ensure this is clearly evident on your file:
A deputy is not required to seek prior authority from the court when appointing their own firm to undertake conveyancing but will be required to obtain three quotations and to choose whichever option is in P’s best interest.
Given that Re ACC states that conveyancing is an integral part of the purchase or sale of a property, where this authority is conferred by the deputyship order, fixed costs as outlined at paragraph 14 of Practice Direction 19B (PD 19B) should apply to all conveyancing transactions completed on behalf of P, regardless of whether the conveyancing process has been completed by the deputy themselves or delegated to someone else.
If a deputy is unable to undertake conveyancing for the fixed rates permitted by PD 19B they must apply to the Court of Protection for authorisation to charge a higher fee before conveyancing work is commenced.
The OPG added that they did not expect deputies to make applications for retrospective authorisation for conveyancing work completed or commenced prior to 1 June 2022.
The OPG have since taken on board the significant feedback and the planned start date of the guidance has been put on hold. That is a brave move of the OPG and shows very clearly that they have listened.
There were several potential issues with the proposals:
1. There was no legal authority for this change from the Court of Protection, and whilst that is not strictly necessary for guidance, the proposed limitations on deputy authority would normally be court sanctioned
PD19B was effective from December 2017 setting the costs of conveyancing at 0.15% of the consideration with a minimum sum of £400 and maximum sum of £1,670 plus disbursements. Five years on, most conveyancers are not prepared to carry out work at the current fixed rates.
The Civil Justice Council recently provided an uplift to deputy hourly rates that had not seen any increase in 10 years. This guidance did not reflect the economic climate of rising house prices, near unprecedented inflation and in turn, the rise of costs for all services.
In my capacity as deputy, many of my clients, due to their very complex needs, require large and as a result, expensive properties. These size and location requirements push prices to dizzy heights. I can’t get conveyancers to quote at the fixed price level. In many cases the quotes are almost double the fixed costs rate.
In addition, it’s unclear if the fixed price includes VAT or subsequent trust work that may be necessary. Where purchasing on behalf of a minor unable to hold legal title, a trust must be created. In some instances, P will purchase a property alongside family members and a Declaration of Trust apportioning shares is a crucial aspect of securing P’s position.
Securing title to what is usually P’s biggest single asset is crucial and the court recognise this given the requirement with orders that a restriction is entered on the title.
It is highly unlikely that conveyancers can or would be prepared to quote as this (now withdrawn) guidance required and that also leads to the question of whether you would want them to.
2. Quality of service
There was a real risk that the guidance would see P forced to instruct the cheapest conveyancer. Would that be the right outcome for P?
All deputies have a duty to act in P’s best interests. It is right in my view that there is a comparison of quotations but that is not just a comparison of cost, it is a comparison of service and expertise offered as well as considerations of capacity to take on the work efficiently.
Interestingly enough this guidance applied only to professional deputies. Why would that be the case? Why would P be placed in a disadvantaged position by the appointment of a professional deputy?
3. Cost of implementing this guidance to P and the impact on the Court of Protection
It would likely be impossible to source quotes to meet PD19B and deputies may not opt for this being in P’s best interests. The next step therefore would have been to make an application to the Court of Protection for authority to depart from the guidance. The Court is already under pressure with existing delays and backlogs. Emergency hearings would therefore need to be listed as applications will be genuinely urgent. The property market continues to boom with supply not matching the huge demand.
The requirement to apply to the court for approval in advance, if the conveyancing costs are not at the fixed level puts P at a disadvantage in the housing market given the time it takes to obtain a
court order. Our clients are vulnerable and it’s said that buying a house is one of the most stressful times in anyone’s life. These procedural hurdles do not make it any easier.
The cost impact on P would also be significant as they pay for the deputy time in a more extensive search for quotes if firms refuse to work within PD19B; the time incurred in preparing applications to be heard by the Court as well as the Court application fee. Those costs are very likely to be disproportionate to any perceived saving by applying the PD19B capped amount.
4. Prejudicial impact on those most vulnerable
It’s welcome news that the OPG is placing this guidance on hold and reviewing the same. Taking all the consequences of adopting the guidance into account, the fear is that it would have a prejudicial outcome for P.
I have no doubt that professional deputies would welcome a collaborative, consultative approach to support the OPG with updating the conveyancing process for P.
Land Registry Title
A further development in recent months comes from Her Majesty’s Land Registry (HMLR) as they have been requesting specific court authority within the orders appointing deputies, for the purchase or sale of property. Unless there is a specific clause within the order authorising purchase, HMLR say they are unable to update the title register.
Former senior Court of Protection HHJ Denzil Lush, gave a much wider authority to professional deputies than the current senior judge, HHJ Hilder. The general authority appointing a professional deputy allowed property purchase and sale. However, recent orders of appointment under HHJ Hilder restrict authority with a move to the assumption that there is no authority to purchase and sell unless specifically stipulated within the order.
This has led to confusion as to when that line in the sand should be drawn and HHJ Hilder has clarified that the authority remit be interpreted as intended, at the time the order was made.
A test case is now with HMLR in the hope that HHJ Hilder’s feedback to this issue is applied. The consequences of HMLR standing firm in their stance that specific authority to sell or purchase always needs to be provided for in a court order is going to lead to yet more applications to court, costs and delays to the sale and purchase processes for P.
The question left here is whether restricting a professional deputy in both of the above matters really serves to further protect P. As professionals in our field, is greater autonomy and trust in our integrity the way to achieve a cost effective and efficient service for P?
The Court of Protection already has in place stringent safeguards for P with OPG annual supervision; senior court cost office assessment of fees and deputy bonds.
Applications to the Court of Protection have generally been routine, but the situation’s now requiring court authority are on the rise and that may not be in P’s best interests given the costs of those applications, as well as overwhelming the court with often time-sensitive applications.
I hope this delay in implanting this latest guidance enables review of the manner in which costs are set and court orders are issued. With a collaborative approach we could save costs both for P and the court, court time, stress, and ensure that P is not in a disadvantaged position regarding the costs of or ability to purchase a home.
Important: Information in this article is provided by the author and Rathbones do not take responsibility for information contained.