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Somerset County Council v MK and Others [2015] EWCOP B1

Costs awarded on an indemnity basis against a local authority at the conclusion of Court of Protection proceedings.

At the conclusion of a contested court of protection hearing, the judge found that the local authority had reprehensibly breached the Mental Capacity Act 2005 (MCA) and the Code of Practice in many material respects, that it had breached the family's Article 6 and Article 8 rights and that there had been a deprivation of liberty continuing up to the time of judgment. 

An application was then made against the applicant local authority for full costs on an indemnity basis by all respondent parties save one, who had been involved only tangentially. The respondents argued that the local authority had acted with a significant degree of unreasonable conduct both before and during the hearing. The local authority opposed the application, stating that it had acted properly in accordance with expert opinion and had made timely concessions and an apology. The judge referred to a senior manager of the local authority's comment that his presence at the hearing was "to fall on his sword on behalf of the local authority".

The judge reminded himself that costs are at the court's discretion (section 55 MCA) and that the "general rule is that there is no order as to costs of the proceedings or that part of the proceedings that concern P's personal welfare". Rule 159 allows for a departure from this general rule if the circumstances so justify, having regard to all the circumstances including the conduct of the parties, the outcome of the case and the role of the public body in the proceedings.

He made it clear that the issue of possible recovery of damages by the respondents against the local authority at some later date and the fact that this would attract a repayment to the legal aid agency if no order for costs was made, had no relevance to the decision to be made. Nor did the fact that the application was for a "cash strapped local authority" to pay another public body (publicly funded respondents having been involved in the case).

The judge examined the local authority's pre-litigation conduct and its conduct during the proceedings. He found that a recent costs decision (Milton Keynes Council v RR, SS and TT [2014] EWCOP 34) in which the judge awarded costs on the basis that the local authority's practices were sub-standard and the respondent and her family were detrimentally affected by the local authority's acts and omissions, was applicable in this case. The judge found in this case that there had been a "manifestly bungled investigation" and on that basis alone the local authority's  pre-litigation conduct was sufficient to make an order for costs up until the time concessions were made on its behalf. The judge then found that the case put on the local authority's behalf after the concessions, was also grounds for a cost order. He considered that the increasing costs burden was as a result of attempting to obtain findings of facts contained in the local authority's schedule. However the local authority lost on practically every finding sought.

He concluded that as a result of his judgment having raised every issue set out in rule 159(1) and (2), this was a case where the usual order for costs should be departed from. He found that the local authority's conduct amounted to a significant degree of unreasonableness both in its approach to the substantive and procedural issues and in those circumstances, the argument for full costs on an indemnity basis was overwhelming.

Summary by Laura McMullan, barrister, Coram Chambers
_______________________

CASE NO: 1242474T
Neutral Citation Number: [2015] EWCOP B1 (Fam)

IN THE COURT OF PROTECTION
IN THE MATTER OF THE MENTAL CAPACITY ACT 2005
AND IN THE MATTER OF MK

30th January 2015

Before:

H.H.J. Nicholas R. Marston
- - - - - - - - - - - - - - - - -

BETWEEN:

SOMERSET COUNTY COUNCIL
Applicant
And
MK
(By her litigation friend, the Official Solicitor)
First Respondent
And
M Second Respondent
And
F Third Respondent
And
MG Fourth Respondent
And 
A
(By his litigation friend, the Official Solicitor)
Fifth Respondent
- - - - - - - - - - - - - - - - - - - - -

Mr Robin Tolson QC (instructed by the in-house legal department) for the applicant
Ms Aswini Weereratne
(instructed by Irwin Mitchell LLP) for the first respondent
Ms Claire Wills-Goldingham QC
and Mr Kevin Farquharson (instructed by Butler and Co solicitors) for the second respondent
F and MG in person
A not attending and not being represented

Hearing Date: 31 October 2014
- - - - - - - - - - - - - - - - - - - - -

Judgment
Judgment on Costs

His Honour Judge Marston sitting in the Court of Protection:
1. I heard the application for costs made in this case by all the parties, save for the fifth respondent, against Somerset County Council at the end of October and reserved my judgment.  I indicated on the occasion of the last hearing that I would not be able because of vacation and then two long running cases to address judgment until about mid-December.  In fact one of the cases overran and I have only recently been able to deal with this judgment.  I am sorry for the delay and for any inconvenience that has been caused to the parties but I have to say it is entirely down to work pressure.

2. This judgment will be sent to the parties before the handing down of judgment and directions hearing on the 30th January 2015.

3. The application arises out of a 10 day hearing before me earlier in 2014.  My judgment in that case is dated the 7th July 2014.  I will set out the law on costs in Court of Protection cases then I will apply it to the facts of this case as I found them to be in that judgment.

4. The application concerned the welfare of MK.  Under Section 55 of the Mental Capacity Act 2005 costs, subject to the Court of Protection Rules, are at the Court's discretion and the relevant rules the Court of Protection state are that where the proceedings are concerning P's personal welfare "the general rule is that there is no order as to costs of the proceedings or that part of the proceedings that concern P's personal welfare".

5. By rule 159:

(1) The Court may depart from the general rule "if the circumstances so justify and in deciding whether departure is justified the Court will have regard to all the circumstances including:

(a) The conduct of the parties;
 
(b) Whether a party has succeeded in part of its case even if it has not been wholly successful, and
 
(c) The role of any public body involved in the proceedings.

(2) The conduct of the party includes:

(a) Conduct before as well as during the proceedings;

(b) Whether it was reasonable for a party to issue, pursue or contest a particular issue;  

(c) The manner in which a party has made or responded to an application or a particular issue, and

(d) Whether a party who has succeed in its application or response to an application in whole or in part exaggerated any matter contained in its application or response.

(3) Without prejudice to rules 156 – 158 and the foregoing provisions of this rule the Court may permit a party to recover their fixed costs in accordance with the relevant practice directions." 

6. In London Borough of Hillingdon v Steven Neary and Mark Neary [2011] EWHC 3522 (CoP) in considering whether to award costs of the First Respondent Mr Justice Peter Jackson reviewed a number of decisions on costs in the Court of Protection and remarked:

"7.  I find that these decisions do not purport to give a guidance over and above the words of the rules themselves.  Had such guidance been given the Court of Appeal would no doubt have given it in Manchester City Council v G.  Where there is a general rule from which one can depart where the circumstances justify, it adds nothing definitional to describe a case as exceptional or atypical.  Instead the decisions represent useful examples of the manner in which the Court has exercised its powers.

8. Each application for costs must therefore be considered on its own merits or lack of merit with a clear appreciation that there must be a good reason before the Court will contemplate departing from the general rule.  Beyond that as MCA Section 55(3) makes plain, the Court has "full power" to make the appropriate order.

9. The questions that must be addressed are these:

i. Is departure from the general rule justified in all the circumstances including the conduct of the parties, the outcome of the case and the role of Hillingdon as a public body?

ii. If so, what Order should be made?"

7. Before I consider the arguments I need to make it quite clear that two matters do not affect me when considering costs.  First of all the issue of possible recovery of damages by MK and members of her family against the Local Authority at some later date and the fact that this will attract a repayment to the legal aid agency if no order for costs is made.  That has no relevance to the decision that I make over costs, nor does the fact that I am dealing with a cash strapped local authority being made in effect to pay another public body, because of course both MK and her mother were publicly funded parties in this case.  It has been made clear in a number of cases that this consideration is also irrelevant to my decision making.  I have to apply the rules on costs and the case law within the context of this particular case and its particular facts.

8. The case that is advanced by the other parties against Somerset County Council for costs orders is summarized at paragraph 4 of the Official Solicitor's skeleton argument on behalf of MK herself: "It is submitted that MK is entitled to recover 100% of her costs in these proceedings on an indemnity basis in view of the terms of the judgment and because of the "significant degree of unreasonable conduct" of the Applicant both before and during the proceedings" (the phrase "significant degree of unreasonable conduct" having been taken from G v E (by his Litigation Friend, the OS) [2010] EWHC 3385.  In effect each of the other parties relies on this significant degree of unreasonable conduct argument to support their application and each of the parties seeks an indemnity costs order against the Local Authority.  The Second Respondent, MK's Mother, M in her skeleton argument sets out her core submissions at paragraphs 1, 2, 3 and 4.  First she says the judgment speaks for itself in that the Local Authority sought to prove every single allegation in its Schedule of Facts.  Further I found that the Local Authority had been reprehensible in breaching the MCA and the Code of Practice in many material respects, that the Local Authority had also breached the family's Article 6 and Article 8 rights.  I also found that that there had been a deprivation of liberty continuing right up to the time of the judgment and I am reminded that none of the respondents in this case brought about this litigation, it was forced upon them by the Local Authority.  Again the basis for the Costs Order is said to be on an indemnity basis and it seems to me that these points, if they are correct, also apply to F, MK's father, and MG, MK's grandmother.  The Fifth Respondent, A, MK's brother, makes no application for costs and was only involved tangentially in these proceedings.

9. The Local Authority in its submissions with regard to costs says that it in fact acted properly in accordance with expert opinion and made relevant and timely concessions and an apology: "we go so far as to submit an order for costs in these circumstances would be overly contrary to public policy and the intention underpinning both the general rule in costs and the statutory scheme".

10. It seems to me first of all that I have to examine the pre-litigation conduct of the Local Authority here to see if costs are justified and then the conduct during the course of the proceedings.  At paragraph 13 of my judgment I set out that the Local Authority issued the proceedings on the 18th December 2013, six months after MK was removed from her family and after her mother had made it clear that she wanted her returned.  It should be recalled that at the start of the case the Local Authority were arguing that there should be no return relying on the bruising, the past history of child protection issues and concerns about A  and the risk he posed in the family.  As I point out in the judgment, the case was originally listed before me as a Finding of Fact hearing in relation to the bruising.  It was only on the 26th March 2014 that the Local Authority filed its Position Statement which can be found at A12 – A15 of the original bundle.  In that document the Local Authority conceded that MK had been deprived of her liberty and that deprivation had not been by procedures prescribed by law but, crucially in addition, the Local Authority changed its position on the factual issues so that it was unlikely to pursue factual findings with regard to the injuries sustained by MK: "previously the chest bruising seemed to form a vital part of the Local Authority case and one might, for instance, have expected findings being sought about a perpetrator or perpetrators and failure to protect but now it was clear that no such finding was being sought.  It was also clear from the document that the significance of the reporting hitting by P of herself in the chest on the 21st May 2013 had now been realized (the class trip evidence had not yet been identified)".  It seems to me that my finding at paragraph 76 that the Local Authority had a duty to investigate the bruising but "that a competently conducted investigation would have swiftly come to the conclusion that no or no sufficient evidence existed to be able to conclude P's safety was at risk by returning her home.  This conclusion should have been reached within a week or so after the family asked for her back" is devastating in terms of the Local Authority's conduct.  I have found that the whole basis upon which the Local Authority acted from MK's removal in May to the filing of the Local Authority document was wrong and the information which concluded that it was wrong was easily available to the Local Authority and, as I found at paragraph 6 of the judgment, would have easily been discovered by social workers if they had carried out a proper investigation between the 21st and the 24th May 2013.  I have to say therefore that the Local Authority's own conduct led to this whole painful process of the illegal detention of MK and the hearing.  I have looked at a number of very helpful authorities that have been shown to me that demonstrate the Court's approach in various factual situations.  In a recent decision by District Judge Mort Milton Keynes Council v RR, SS and TT [2014] EWCOP 34 the Judge there awarded a full award of costs taking the view that it was manifestly justified because he had no difficulty in concluding that the Local Authority's practices in that case were sub-standard.  He said "It's P's misfortune to have been the victim of that sub-standard practice.  The Local Authority's acts and omissions have detrimentally affected both P and her family and changed the course of their lives".  I am sorry to say that that comment is equally applicable to this case.  The first cause of all of this unhappiness is the manifestly bungled investigation.  I use that harsh word because apart from anything else the Local Authority's action in withdrawing from seeking findings of fact on it demonstrates quite how bungled it was.  It seems to me on that basis alone the Local Authority's conduct pre-litigation in causing the litigation would be sufficient for me to make an order for costs up until the time when the concession was made on behalf of the Local Authority.

11. My judgment of course goes a great deal further than that in criticizing almost every aspect of the Local Authority's conduct before the concession on its behalf.  I do not propose to set out in any detail the contents of my judgment.  There are a number of very serious criticisms made, the nature and seriousness of them is perhaps best demonstrated by the fact that a senior manager from social services described his presence in Court first of all to fall on his sword on behalf of the Local Authority.

12. The litany of negative findings that I have made is set out at paragraph 2 of the submissions on costs by the First Respondent at i – ix.

13. There are further criticisms made of the Local Authority in terms of their unreasonable conduct during the course of the proceedings up to the hearing.  I do not think in fact that these add very much to the position.  The reality is that if they had investigated the case possibly the whole set of hearings would have been unnecessary. That means that this failure of itself is a basis for making a costs order against the Local Authority not just up to the concession but throughout the case.

14. The way the case was put by the Local Authority after the concession also I find gives grounds for a costs order.  In G v E (above) the court found that the hearing would have been significantly shorter and the issues less complex than they were at the date the case started 9 months after P had been living away from home. That is of course the case here. If the Local Authority had brought the case to court much earlier there would have been so much less material for the best interest hearing to have to analyse. But more crucial than that in terms of increasing the costs burden was the attempt to get findings of facts on the Local Authority Schedule. Virtually every one of those findings failed.  If the Local Authority had put the case on the basis of social work evidence and the experts initial views that it was better for MK to go into the care home than go back to her family this would have resulted in a 3 or 4 day hearing, instead they argued for the schedule of findings and lost on practically all of them. It was argued that the court insisted on hearing these, I am afraid I don't understand this argument, you could have a simple argument now on best interests without the necessity of examining the Schedule, the Local Authority chose to pursue the schedule. The Schedule was put forward to support the Local Authority's future plans for MK and it was rejected by the court, as were those plans. This is in addition of course to the fact that we should not have been in court in the first place. The detailed analysis in the Official Solicitor's document at 26 hits the nail on the head in a number of additional criticisms that are all in my view justified.

15. Another argument which was put forward by counsel for the Local Authority for not making an order for costs in this case is that the Local Authority here, and indeed others, would be inhibited in the future in pursuing appropriate cases if they thought that if they got it wrong there would be an order for costs against them.  I am not at all convinced by this argument.  Going back to the general rule in personal welfare cases one has to remind oneself that that there is usually going to be no order for costs of the proceedings.  It is only when Rule 159(1) comes into play that you depart from general rule.  Therefore, if a local authority fights out a reasonable case but loses, it will be protected by Rule 158.  It is only in cases like this because of the findings that I have made and the conclusions that I have come to, that Rule is departed from.  Again, a reading of my judgment raises every single issue set out in Rule 159(1) and (2).  I find that the conduct of the Local Authority, the loss on every matter that was argued, its raising and pursuing or continuing to contest particular issues, the manner in which it has made its application, i.e. based on a false premise, are all relevant here.  Rule 159(2)(d) is not.

16. In the light of all of this it seems to me that this is plainly a case where the usual order for costs should be departed from to the extent that the Local Authority should pay the costs of all of the other parties involved.  The other matter that I should deal with is whether those payments should be on an indemnity basis.  It seems to me the guidance of Mr Justice Baker in G v E (above) where he drew attention to that particular local authority's blatant disregard for the processes of the MCA and their obligation to respect the patient's rights under the ECHR amounted to misconduct which justified departing from the general rule but I also have to consider whether those costs should be on an indemnity basis or not.

17. I am very conscious of the impact of such an order.  However, in that same case of G v E  (above) Mr Justice Baker considered that the local authority's conduct amounted to "a significant degree of unreasonableness" giving rise to a liability for costs on an indemnity basis.  If one reads my judgment in full it is clear that that there was in this case as well a significant degree of unreasonableness both in the Local Authority's approach to the substantive and procedural issues in the case.  In those circumstances it seems to me that the argument for indemnity costs is an overwhelming one in this case and that is the order that I intend to make here.

H.H.J. Nicholas R. Marston
30th January 2015