Re HP (Remuneration of a Financial Guardian under Section 68 of the Adults with Incapacity (Scotland) Act 2000) [2010] ScotSC 21/7/10

This appeal concerns a decision of the Public Guardian regarding the question of the remuneration payable to a financial guardian in respect of the work undertaken by him in connection with the applications he submitted for renewal of the guardianship. Following an application to the Public Guardian for remuneration in connection with the renewal process, it was decided that additional remuneration was appropriate, but the proposed payment was at a level the guardian did not regard as adequate. The court held that this case was an exceptional circumstance in which the Public Guardian should authorise payment on a time and trouble basis.


Thanks to DS (User:Ds) for writing the case summary.


AW 214/09 (Glasgow Sheriff Court), AW 3/09 (Rothesay Sheriff Court), Sheriff J A Baird, 21 July 2010


AW 214/09 (Glasgow Sheriff Court)

AW 3/09 (Rothesay Sheriff Court)

Remuneration of A Financial Guardian under Section 68 of the Adults with Incapacity (Scotland) Act 2000

Sheriff J A Baird

Point at Issue in the Cases

  • The two cases raise the question of the remuneration payable to a financial guardian in respect of the work undertaken by him in connection with the applications he submitted in October 2009 for renewal of the guardianship in both cases.
  • There are two cases before the court in the present situation, both of which involve the same guardian and raise the same point. One of them was raised in Rothesay Sheriff Court, as the adult lives in that jurisdiction, and the other was raised in Glasgow Sheriff Court, as the adult in that case lives in this court's jurisdiction, but following agreement between the parties, and with the concurrence of the Sheriff at Rothesay, the former case was transferred to Glasgow in order that both could be dealt with at the same hearing.

Legislative Background

  • Both cases come before the court by way of appeal under section 68(8) of the Adults with Incapacity (Scotland) Act 2000.
  • Section 68 of the Act provides, in subsection 4 that "Remuneration shall be payable out of the adult's estate....(b) in respect of the exercise of functions relating to the property or financial affairs of the adult, unless the sheriff directs otherwise in the order appointing the guardian,..."
  • Subsection 6 provides that "Any remuneration payable to the guardian .... shall be fixed by the Public Guardian - (a) in a case where the guardian is required to submit accounts, when the guardian's accounts for that period are audited; (b) in any other case, on an application by the guardian, and in fixing the remuneration to be paid to the guardian, the Public Guardian shall take into account the value of the estate."
  • Finally, subsection 8 provides that a decision by the Public Guardian under subsection 6 as to the remuneration payable to the guardian may be appealed to the sheriff, whose decision shall be final.

The Background to the Applications before the Court

  • The first case is that of HP, who lives on the island of Bute. He is now 69 years old, and was the victim of an accident at work in 1986, resulting in severe brain injuries. Although he did have some property of his own at the time, including the house where he still lives, the vast bulk of his present estate emanates from the award of damages made in his favour following litigation. The current value of his estate is £735,014.16.
  • The second case is that of LG, who lives in Glasgow. She is now 38 years old, and was the victim of a criminal assault in about 1989, also resulting in severe brain injuries. The present value of her estate, which emanated from an award by the Criminal Injuries Compensation Board (as it was then constituted) is £601,254.26, including the value of the house where she now lives, which was purchased for her out of her estate, and is actually the third house so acquired over the period.
  • The pursuer in both applications is David Donald Frame. He is now 75 years old. In a long and distinguished career as a chartered accountant, commencing in 1959, he worked with several leading accountancy firms, retiring as senior partner of his last one in 2001. During his career, he accepted appointment, under the former law of this country, as a curator bonis to several persons who had suffered serious brain damage or injury. He developed a specialised knowledge of the various considerations which apply with regard to the special needs of such persons, the management of their finances, particularly where life expectancy is not significantly reduced, and the range of services which are required to be provided for the better enjoyment of their lives, together with the costs associated in providing that. He developed a close personal interest in the affairs of the adults involved, and a close personal relationship with them and their supporting families. He acquired considerable skill and expertise in the management of the funds of such persons.
  • He was appointed curator bonis to HP by interlocutor of the Court of Session on 14 November 1989. As was the custom then, the interlocutor is brief, awarding him what were habitually described as "all the usual powers in terms of the Judicial Factors Act 1880". Such interlocutors contained no specific entitlement to payment of fees for professional services, that entitlement being regulated under the existing law and practice.
  • He was appointed curator bonis to LG at the Sheriff Court at Glasgow on 7 July 1992, in terms of an almost identically worded interlocutor to that in the case of HP.
  • When he retired from active professional practice, he still held appointment as the curator bonis to six such adults, including the two involved in this case. Although many professional persons who hold such appointments seek to be discharged from office and be replaced by a suitable alternative person when they reach retirement from active practice, Mr Frame did not do so. He continued in office in all six cases, with the complete concurrence of the families of those involved, all of whom had seen their relative benefit over the years from the prudent financial management undertaken by him.
  • To the present date therefore, Mr Frame has acted continuously on behalf of HP for over 20 years, and continuously on behalf of LG for 18 years.
  • It may be said that in discharging his duties on their behalf, he has done so with great skill, care, diligence, and devotion. He has of course been rendering his services on the basis of payment of professional fees, but it is explicitly accepted by all parties that the adults concerned have benefited enormously from his ministrations. Both adults live in their own home, supported by appropriate care packages, negotiated by him, and the prudence of the investment package he administers on their behalf can be recognised by virtue of the fact that even in these uncertain financial times, both estates are increasing in value annually.
  • The administration of the affairs of these (six) adults is the only work of a professional accounting nature in which he now engages. He keeps a room in his own house set aside as an office in which he retains the relevant files and attends to their business.
  • When the Act of 2000 came into force on 1 April 2002, persons such as Mr Frame automatically became the guardian to any adult in respect of whom he had previously held appointment as curator bonis (Schedule 4 paragraph 1(1)).
  • It is critical for the purposes of these appeals however to record that all of the old curator bonis appointments, including the two involved here, were made without limit of time. There never was any obligation on the holder of such an appointment to seek any renewal of it, or submit any process for review or renewal. Under the Act of 2000, where a person is appointed to be the guardian in respect of the property and financial affairs of another adult, there is a default period for appointment of three years, albeit the court has discretion to make them longer, including for an indefinite period (section 58(4)).
  • The passing of the Act of 2000 did not affect the position of those, like Mr Frame, who had become "statutory" guardians, (sometimes referred to as "transitional" guardians) in relation to the length of their appointments. They were not obliged to seek renewal of them or enter into any process of review. They simply continued in office as before, subject of course to scrutiny by the Public Guardian (who is also the Accountant of Court - section 6(1)).
  • Those appointed under the provisions of the 2000 Act with a time limited appointment were obliged to seek renewal of their appointments, (provided the conditions still apply) and to comply with the provisions of section 60, the renewal section.
  • That all changed with the passing of amending legislation in the form of the Adult Support and Protection (Scotland) Act 2007, which attempted to assimilate the position of the "statutory" guardians with the position of those appointed under the provisions of the 2000 Act, and for the first time made the "statutory" guardians apply for renewal of their appointments.
  • In an earlier case, the Application in respect of LG (2009 SLT (Sh Ct) 153 - the adult concerned being the same adult as is concerned in this case), I made certain observations, to which I adhere, about the effect of the provisions which appear now in section 60 and schedule 4 of the Act, but for present purposes, I simply point out that where a person who before 2002 had been a curator bonis, and from 2002 to 2009 had been a "statutory" guardian, wished to continue in office, that person required to bring an application for renewal and to do so before 5 October 2009 (Schedule 4 para 6(3)(a)(i)).
  • The opinion I have just referred to, and which I issued in September 2009, was issued as a result of the application made by Mr Frame for renewal of the guardianship he then held in the case of LG. He made it prior to 5 October 2009 and I granted it on 25 November 2009, and note in the passing that it did not include a specific crave for payment to Mr Frame of professional fees. The reason for that is that since he would now become a guardian under a guardianship order granted by the court, he would be entitled to remuneration by virtue of the terms of section 68(4) of the Act quoted above, unless the court had directed otherwise "in the order appointing the guardian", which I did not.
  • I adhere to the distinction I drew in that earlier opinion between "guardianship" and a "guardianship order", but as a result of his having applied for renewal, and of that being granted, Mr Frame now falls squarely into the category of persons appointed as a guardian under the Act of 2000 and in terms of an order from this court.
  • By similar process in Rothesay Sheriff Court, Mr Frame had applied for renewal of the guardianship he held over the affairs of HP, and that was granted on 26 November 2009. Accordingly, in that case also, he is now to be regarded as a guardian under the Act of 2000, and in terms of an order from that Sheriff Court.
  • In all six of the cases in which he held appointment as a "statutory" guardian prior to October 2009, Mr Frame required first to consider whether he did wish to seek renewal of his appointment, and had also to consider whether the appointment remained necessary. In one of the six cases, the adult had recovered sufficient capacity to be able once again to take relevant financial decisions, and in that case, Mr Frame did not seek renewal. In fact, such was the high esteem and level of trust in which that adult held Mr Frame that the adult, who had the capacity to do so, was quite content to execute a Power of Attorney, naming Mr Frame as attorney. That left him with 5 cases, and ultimately, and following the taking of all relevant advice, he concluded that renewal was necessary in all of those cases.

The Problem which has arisen regarding Remuneration

  • In each case, Mr Frame would have been under the standard obligations of a guardian to account for his intromissions and render accounts to the Public Guardian. In each case, as a professional guardian, he would have been entitled to payment of an annual fee for so doing. In each case, that would have been calculated on the basis of a scale, or commission basis, based on a percentage of the value of the estate. I will return to that scale later.
  • In each case however, Mr Frame took the view that the additional work required to prepare and process the application for renewal fell outwith the scope of the work of actually administering the funds of each adult, and which work was compensated for by payment of the annual fee by way of remuneration. In three of the cases, his claim for additional remuneration payable out of the adult's estate was approved by the Public Guardian to his satisfaction, but in the remaining two cases, which of course are these two, it was not.
  • In processing these applications, and in deciding whether in the first place he ought even to seek renewal of his appointments, he instructed Mr Adrian Ward, Solicitor, who is of course not only the author of the standard text books on this subject, but is also the acknowledged master of it, and the person who has done more than any other practitioner in Scotland to advance this whole area of law. Since Mr Frame had been exercising his skills as an accountant on behalf of the adults for years, and had not required to consider becoming involved an any court process, other than his original appointments, until 2009, he had not previously required to contemplate the taking of such specialist legal advice for the purpose of renewal of his appointments.
  • He made application accordingly to the Public Guardian for remuneration in connection with the renewal process on behalf of these two adults, and to be remunerated separately for that and in addition to the annual block fee he was entitled to and which was based on a proportion of the value of the estate. The public Guardian decided that additional remuneration was appropriate, which is a significant concession, but the basis on which she proposed to do so would have resulted in a level of payment to Mr Frame which he did not regard as adequate. These appeals were accordingly brought.
  • His applications for remuneration were made in accordance with the provisions of section 68(6)(b), which permit the fixing of remuneration to a guardian not only when he submits his annual accounts, but "in any other case, on application by the guardian", and he would have been entitled to be paid without having to wait for his annual fee in terms of section 68(7) which permits the Public Guardian to allow payments to account to be made by way of remuneration during the accounting period if it would be unreasonable to expect the guardian to wait for payment until the end of an accounting period.

The Basis of his Claim

  • As set out in detail in the pleadings in both cases, and which is identical in both cases, Mr Frame explains that in March 2009, he consulted Mr Ward regarding the effect of the 2007 Act amendments on his existing six appointments. He reviewed the guardianship of each of theses adults with Mr Ward, i.e. not the financial accounting aspects of them, or the day to day administration of them, but the whole legal issue of potential renewal of these appointments and whether he should even proceed to do so. Having discussed the matters in detail, he concluded that it would be of benefit to the adult in each case, that being the principal test set out in section 1(2) of the Act, and otherwise in accordance with the provisions of the Act, to seek to renew these appointments. He instructed Mr Ward to proceed with an application in each case.
  • For the purposes of all of that, Mr Frame sets out in his pleadings in the appeal that he required to carry out considerable work, all as set out in a detailed account he submitted, described as a "statement of time and trouble". He states that the information required for the purposes of the renewal application substantially exceeded the information ever required to obtain the original appointments in the Court of Session and Glasgow Sheriff Court, and available information required to be updated.
  • He had to address considerable difficulties and delays in arranging for medical assessment of the adults. For the reasons already set out, no such assessment had been required since the beginning of the curatories. One aspect which caused very great difficulty, time and trouble, particularly in the case of HP, was the identification of a suitable medical practitioner. Where the incapacity is by reason a mental disorder, the report must be from a practitioner approved in terms of the Mental Health (Care and Treatment) (Scotland) Act 2003. There is no such approved practitioner on the island of Bute.
  • He pleads that all of this work formed no part of the normal administration of the adult's affairs for which he would be remunerated on an annual basis. It was, he says, entirely additional work for the purpose of the renewal application which he would never have had to do but for the statutory requirement introduced by the 2007 Act. It was not normally work which Mr Ward would have carried out, and did not reduce the amount of work which Mr Ward did have to do. It was pleaded that the work was akin to the work involved in preparing a new application for appointment, and to the work done by the client instructing a solicitor, and not work done by the solicitor.
  • At the hearing before me, Mr Frame was represented by Mr Ward, and the Public Guardian appeared on her own behalf, which she is statutorily entitled to do by virtue of section 6(2)(da) of the Act. I am grateful to both of them for their most helpful submissions and for the wealth of general information I was provided with which enabled me to reach a decision.
  • Mr Ward founded on certain admissions which appear in the Answers lodged by the Public Guardian. These admit that Mr Frame was required to carry out considerable work, as detailed in his "statement of time and trouble", that it was appropriate that he receive a level of remuneration for that, that the information required for a renewal application substantially exceeded the information ever required to obtain the original appointments, and that available information required to be updated, subject to the Public Guardian's belief that much of that information ought to have been known already. Finally, it was admitted that the work formed no part of the normal administration of the adult's affairs for which Mr Frame was remunerated.
  • Unsurprisingly, Mr Ward founded on these admissions on record as meaning that there was no dispute that Mr Frame was entitled to be paid remuneration for having prepared and presented the renewal applications, and that it would be additional to his annual remuneration, and was entitled to be paid that now, rather than wait till the accounting year's end. The only remaining dispute was as to the basis on which he was to be remunerated.
  • So, what is the basis on which a guardian is to be remunerated for his services ? This guardian is not a solicitor, nor a lay guardian. For carrying out the routine work of the guardianship, and for which a fee is payable at the end of the accounting year, and once the accounts are approved, he is entitled to a fee fixed on a commission basis as a proportion of the value of the adult's estate, leaving the value of any heritable property out of account (schedule 8 para 1(a)). As already pointed out, section 68(6) says merely that the Public Guardian shall fix the remuneration payable, and therefore allows her complete discretion in so doing, with the single exception that she must take into account the value of the estate, although it goes without saying that that factor would always be taken into account, even without that specific injunction.
  • When any claim in respect of catastrophic injuries is being prepared, and where it is known that the recipient of damages (or of a very large sum by way of compensation in respect of criminal injuries) is someone who is going to have to have such sums administered on his or her behalf professionally, it is standard practice to include in the estimate of costs an allowance for the professional administration of those funds. Where such a claim is being prepared now, post 2002, and where the services of a guardian are going to be required, it would be prudent to include in the costs element an allowance for the need to present a guardianship application and the need periodically to renew such an appointment with the court, for that is the default provision of the Act. Further, the average costs involved in so doing is known.
  • That was not the position pre 2002, where a curator bonis was appointed for life, and there was no need to renew, and therefore no need to take any such possibility into account. The sums paid to the adult in both of these cases therefore did not include, and could not have included, any element reflecting the need to renew the appointments in later years.
  • No professional person would be willing to take on such an appointment unless he or she would be adequately remunerated for so doing, but it is vital that there exists a pool of suitably qualified people who are available to act in these cases.
  • In order that those who act in these cases can have some idea on advance as to how they will be paid, there was published by the present Public Guardian's predecessor a table showing the percentage commission which would be allowed for the remuneration of guardians under the Act. That table is still adhered to and the "guidance" contained therein still followed. Shortly put, for first accounts rendered under the scheme, the guardian would expect to receive (the actual wording is "the likely level of remuneration" for "the proper discharge of their duties"), in the banding in which both of the present estates lie, commission of 1.25%, with a minimum of £6250 and a maximum of £8000. For second and subsequent accounts, the commission annually would be 1% with a minimum of £5750 and a maximum of £7000.
  • It is, I think, worth quoting the passage in the document which explains what that all inclusive fee is meant to cover, which is the ongoing financial management of the estate, including all meetings with the adult, primary carer and nearest relative, any adjustments to caution, the Inventory, the Management Plan, the preparation and lodgement of the account, any realisation and re-investment of the moveable estate during the accounting period, receipt and handling of income, any expenditure relating to or on behalf of the adult, and answering any questions on the Inventory, the Management Plan or the account from the Public Guardian.
  • From that list, it can be easily seen that nowhere does it suggest that that it includes the costs incurred by a guardian in preparing and presenting a process for renewal to the sheriff. Indeed, that is explicitly recognised by the admissions in answer by the Public Guardian already quoted.
  • Significantly however, there is a further paragraph in the document, headed "Time and Trouble". (A "Time and Trouble" account is the equivalent of what solicitors refer to as a "time and line" account). This is the paragraph under which Mr Frame claimed payment in both cases for the work done in preparing and presenting the renewal applications. In the case of HP, Mr Frame expended 17.5 hours on the matter under discussion, and in the case of LG, he spent 13 hours on the work. Neither amount of time seems to me to be excessive, and indeed both seem modest. The extra time spent in the HP case was largely accounted for by the difficulties already alluded to in arranging suitable medical examination.
  • The all important passage in the guidance reads thus, "In exceptional [sic] circumstances the Public Guardian may be able to authorise, in any accounting period, part or all of the financial guardian's fee to be paid on a time and trouble basis. The financial guardian will require to demonstrate to the Public Guardian the potential benefit that would accrue to the adult's estate from this method of payment. In those cases where either or all of the fee is claimed on a time and trouble basis the hourly rate will be based on the unit charge found in the Solicitors' Fees - Table of fees for General Business. No other hourly rate shall be approved".
  • So, here, Mr Frame took the view that his fee for general administration would be covered by the block fee, but that his fee for the work done in connection with the renewals would not. Since it is explicitly accepted that he is due to be paid for that, and that it formed no part of the normal administration of the adult's affairs for which he was remunerated, his claim for payment for that is part of his fee due within that accounting period. The potential benefit which would accrue to the adult's estate from this method of payment is that if a guardian in a similar position was to be aware that he would not be paid for the actual work done over and above the normal administration, then he might not be prepared to do it at all, meaning that prospective guardians would be put off from volunteering for this kind of work. By being prepared to pay for it separately, the Public Guardian is demonstrating a willingness to remunerate financial guardians appropriately, and the benefit to the adult's estate is that an appropriately qualified person continues in office as guardian.
  • That therefore leaves only the issue that the Public Guardian may be able to authorise a "Time and Trouble" basis for payment in "exceptional" circumstances, and the question of what is the hourly rate. There has not been an hourly rate published since 1999, and the unit which is used is derived from the solicitors' Cost of Time Survey, conducted by the Law Society and published annually. In June 2009, the year in which the accounts were submitted by Mr Frame, the Law Society announced that the average hourly expenditure rate was £140.24. If a financial guardian who was a solicitor claimed for payment on that basis and satisfied the exceptional circumstances test, that solicitor would be paid £140.24 per hour for every hour allowed, since the guidance document says that no other hourly rate shall be approved.
  • In fact, taken literally, that would mean that if a claimant asked for a lesser hourly rate, the effect of which would of course be to reduce the cost to the estate and help to preserve it further, that lower rate would not be approved, but that cannot be correct. Since both the guardian and the Public Guardian have a duty to seek to preserve the adult's estate for the adult's benefit, a claim which justified payment on the exceptional circumstances test, but which sought payment on a lower rate, would surely be in order for payment. I rather think that the sentence in the guidance means that no higher rate would be approved, and no different method of calculation claiming an appropriate rate will be approved. That is important for reasons which follow.
  • Mr Frame is not a solicitor, nor is he any longer in active practice as an accountant. His professional overheads do not compare now to what they used to be when he was in practice. Responsibly, he took the view that by claiming £140.24 per hour, which he knew he would be entitled to charge as that is the approved hourly rate, would result in over-compensating him to the detriment of the estate. As a result, he claimed only £85 per hour. That meant his claim in the case of HP was £1487.50, and in the case of LG it was £1105. These figures include secretarial assistance.
  • The Public Guardian rejected these claims, hence the appeal.

The Remuneration Offered and the Basis of Calculation Thereof

  • The Public Guardian took the view that an adult whose "statutory" guardian had been required to renew should not be in a more financially disadvantageous position than one placed under guardianship for the first time. She then looked at the average legal costs, fees and outlays, associated with new applications, which are £2500. Those for renewals average £2000. She acknowledged that if Mr Frame had instructed Mr Ward to do more of the groundwork involved, that would have resulted in a greater legal bill, as Mr Frame would have been entitled to charge that as an outlay, and it would have been paid as such. Making allowance for that, and scaling the matter up by £500, and taking the average new case cost rather than renewal cost, gave her a maximum total expenditure in each case of £3000. She formulated this method since it is capable of replication in subsequent cases.
  • However, having done that, she then raised the cap again to £3500 to allow for payment both of fees to Mr Ward and Mr Frame. As A result, she awarded Mr Frame £382 for the case of HP (against a claim of £1487.50), but then rounded that up to £500 as that figure had already been suggested in earlier correspondence, and awarded him £984 for the case of LG (against a claim of £1105), but then rounded that up to £1000.

The Actual Work Done

  • When one looks at this, it is clear that it was akin to making an application for a new appointment, albeit there was a need for only one medical report. Mr Ward produced his files which showed that he approached this matter on the basis of giving general advice covering all of the six cases Mr Frame had, and then once a decision was made to proceed with renewal, there had to be individual files. It is clear from his opening letter to Mr Frame, that Mr Frame was expected to prepare for the whole process as if these were new applications, and that, assuming it was deemed necessary to proceed at all, he was going to be placed, for the first time under the whole statutory scheme regulated by the Act of 2000 as amended in 2007. In all six cases, the "general" preparation work was substantial. Full explanations were given as to what was expected under the regulatory scheme of the Act. Amongst the matters discussed was the length of appointment which should be sought, i.e. whether time limited or indefinite, so that it can be seen that already there was discussion about the costs of a possible future renewal which would have to be factored in. It is clear that Mr Frame was being introduced to a wealth of information on the practice and procedure of a legal process which had developed without his having to have been a part of it.
  • Annoyingly, the best attempts of the guardian to arrange for appropriate medical examination for HP came to nought, as the chosen practitioner, despite confirming a willingness to examine and report in May 2009, failed to travel to Bute on the allotted day, and instead suggested an alternative, but this person was not approved under the 2003 Act and a further substitute had to be identified, but 4 months were lost and a lot of time and effort expended in dealing with this basic requirement.

The Appellant's Submissions

  • These were twofold. Firstly, it was said that payment on the "Time and Trouble" basis was in accordance with the general principles of the Act and as applied by the Office of the Public Guardian, and secondly, that the appellant had a legitimate expectation that that is how he would be paid.
  • As already stated, the main principle in the Act is benefit to the adult. It is beyond question that the adults in these two cases benefit from having a skilled guardian administer their affairs, and if he had not undertaken that work, his "statutory" guardianships would have ended on 5 October 2009, and no one would have had the power to act on their behalf (schedule 4 para 3A(a)). In order to achieve that benefit, it was necessary to do this work, and all of it. It was not in dispute that all of this work was in fact necessary.
  • Then, it was said, if a guardian did not have a legitimate expectation that he would be properly remunerated for doing this required work, appropriate persons would not be prepared to do it at all.
  • It was argued that the only properly consistent approach to remunerate work done which fell outwith the ordinary administration of a guardianship was to calculate it on a hourly basis, the rate being established, as it is in the guidance. Where a fixed figure was awarded, which the Pubic Guardian was proposing to do here, that would mean there would be some cases where the guardian was over-compensated, and others where he was under-compensated. It was said to be inappropriate to proceed on the basis of an average cost for new applications. These were both brain injury cases. The legal costs in such cases are higher, and therefore the remuneration paid to the solicitor will increase, and that payable to the guardian will decrease. In effect, the guardian merely gets what is left after the solicitor's fees are paid, and that in no way reflects the extent of the work actually done by the guardian.
  • As to reasonable expectation, the principles are well established and I need not rehearse them here. The point is that by saying that a guardian will "likely" be remunerated on a block fee basis for the annual administration of the estate, and on a percentage which is set forth in guidance, that creates a reasonable expectation of the actual level of annual remuneration.
  • But the point here is with regard to the "exceptional circumstances" argument, and the basis on which work actually and necessarily done in addition to the normal administration of the estate will be remunerated. It was said that there was a reasonable expectation that it would be remunerated on the hourly rate specified in the guidance and which was the ascertainable figure £140.24 at the time the decision was made.
  • That was said to be a representation from a public body creating an expectation in another from which it would be abuse of power to resile. Public authorities should adhere to their promises. The relevant representation must be unequivocal and lack any relevant qualification. The claimant must show that it would be unfair of the public body to resile from giving effect to the legitimate expectation, and in the present context, that would be unfairness in the sense that it was a failure by a public body to give effect to a substantive benefit which is the subject matter of a legitimate expectation in circumstances where there is no overriding interest which would justify the public body in resiling from its representation that such a benefit would be forthcoming. The wider public interest must be taken into account. It must, of course, be intra vires. (See Rowland v The Environment Agency [2003]Ch 581, @ para 67).

The Public Guardian's Response

  • The situation here is apparently without precedent, no other guardian having asked for payment for this work on this basis. There were 659 cases of adults who fell into the category of having a "statutory" or "transitional" guardian and whose guardianships fell to be renewed, if deemed necessary, by October 2009. There are not of course 659 guardians, since many of the professionals who held the various different types of appointment under the old law held multiple such appointments.
  • Most of those which were renewed, were renewed indefinitely. Advice from the Mental Welfare Commission has impacted on this practice, and they are known to prefer some process of regular review, but of course in this category we are dealing with adults who are severely brain injured, and whose estates have required to be administered for them for roughly 20 years each already. It was accepted that if an appointment was renewed as a result of the 2007 Act reforms, that was probably akin to a new application under the 2000 Act, but that any subsequent application for renewal ought to be much more straightforward.
  • Where a lay guardian has incurred fees to a solicitor, these will be allowed as an outlay, which of course does mean that if all the work done by Mr Frame had been left by him to be done by Mr Ward, the solicitor would have been paid for it. There are about 300 renewals per annum, and no guardian has ever charged extra remuneration for the work involved in preparing those. It was said that Mr Frame ought to have been generally aware of much of the information required to be produced in the renewal application, as he had been acting in the adults' affairs for so long.
  • Critically however, the stance taken by the Public Guardian was on the principle that the need to renew in both these cases did not amount to exceptional circumstances, and therefore it was simply not appropriate to consider the possibility of payment on a time and trouble basis, as that would then be irrelevant. It is correct that that basis for payment only applies if the claimant satisfies the public body authorising payment that the claim is made in exceptional circumstances. No other guardian, including those who had been "statutory" or "transitional" guardians, had considered it apparently as other than routine, and none had applied for separate payment for doing it.
  • Having set aside the "time and trouble" method of calculation as irrelevant, the Public Guardian then proceeded to use an average cost of applications method, because this could be applied generally. In a case of a new application of course, there is no guardian actually already in place, so there is no remuneration payable to that person. She then took the average new application figure and rounded it up to £3000, so that there would be some element in that left over to a guardian after the solicitor had been paid, and so that it gave a figure which could be replicated. The actual figure she was prepared to authorise in these two cases was then increased again to £3500 (including solicitor's fees), which is 40% higher than the average cost of a new application.
  • She accepted that if Mr Frame, or any other similar guardian, had decided that it was not financially viable to continue to act without proper remuneration, such a guardian may have decided simply not to seek renewal at all, which would have left the adult's estate unrepresented, leaving the local authority with its statutory duty to intervene to seek appointment of a suitable person (section 57(2)) and that would almost certainly be a professional person.
  • It was agreed that there was a legitimate expectation that the guidance would be taken into account in deciding on claims for remuneration by a guardian. It was explicitly accepted that the work done and claimed for did not form part of Mr Frame's normal duties.
  • In a brief response, Mr Ward questioned the appropriateness of using average costs figures, since there would be a large range of figures and some would undoubtedly be over-compensated and some under-compensated. The overall philosophy of the legislation was to get away from older ideas that these could be a general approach to all cases. Just as the issue of capacity is decision specific, so each case is supposed to result in the tailoring of specific powers and provisions appropriate to each adult, subject to the basic principles.

Resolution of the Appeal

  • This is an appeal from a decision of the Public Guardian, and not a judicial review. Further, the statute, wisely, does not attempt to proscribe how it should be approached or set forth the basis on which it must be considered and determined. That means that if I decide that a decision which was reached was not one which I would have reached, and that I would have reached a different decision on the same factual basis as was before the decision maker, it is open to me to substitute my view of the appropriate decision for that of the decision maker, unlike the situation which pertains in judicial review of administrative action.
  • That takes me straight to the critical point. Were the circumstances here exceptional ? The Public Guardian says they were not, so that the "time and trouble" method of authorising payment does not apply. But it is clear that it is possible for a claimant to satisfy the requirement that exceptional circumstances exist, and if that claim is accepted, the Public Guardian may be able to authorise payment on that basis.
  • So, what was it that led to the making of this claim ? If the law had not changed, it would not have been made at all, because no application for renewal would have been necessary and none of this work would have been done at all. It formed no part of the normal administration of the adult's estate. Not only is that explicitly accepted by the Public Guardian, but it is clear from the description already quoted as to what work is included in the annual block fee, that this work forms no part of that whatsoever.
  • For 18 years in one case and over 20 years in the other, the guardian has administered the estates of these individuals without the need to contemplate renewal of his appointment. Such was not required under the old law, and even under the new law as enacted in 2000. It could not have been contemplated when these appointments commenced that the law would change so as to require a whole new process of renewal, with substantial work requiring to be done to bring them within a new statutory scheme. It would not have been possible 20 years ago to compute the expected cost of administration in the future as including renewal costs. It can now.
  • In the vast majority of these cases which have required renewal applications, the guardianship has been renewed indefinitely. The renewal costs have therefore never previously had to be incurred, and will never be incurred again. As it so happens, in both of the present cases, the guardianships did have a time limit applied to them, of 10 years in both cases. By the time that elapses, of course, Mr Frame will be 85 years old. It may be appropriate then for someone else to take over the responsibility, but even though that means that in fact both of these cases will have renewal costs associated with them, such a need is now foreseeable, and the level of costs is capable of calculation and factoring into the overall cost of administration.
  • While I accept that no other guardian has made a claim similar to here, that does not mean that no other such guardian regarded the matter as exceptional. It may simply not have occurred to some of them, and others may have thought that the block fee they would receive for their annual duties was quite adequate to compensate them for any additional work they had to undertake in connection with a renewal application. The fact that no one else attempted to establish exceptional circumstances does not mean that no one else regarded them as exceptional circumstances or that they are not in fact exceptional.
  • The obligation to consider renewal, and then if the circumstances as outlined in the general principles of the Act justified it, to gather the information required by the Act and then instruct the bringing of a renewal application was imposed on persons such as Mr Frame by Parliament, in a change to the law which was not thought necessary even when the whole new scheme for dealing with the affairs of adults with incapacity was enacted in 2000.
  • It is explicitly accepted that the work done formed no part of the normal administration of these estates, and that Mr Frame is entitled to payment of remuneration for that in addition to the block fee he will receive for the accounting period during which the obligation to renew arose.
  • In all these circumstances, it seems to me with respect that the position into which Mr Frame was put was an exceptional one, and I have the misfortune to differ from the opinion of the Public Guardian in that respect. But since it is open to me on the same factual basis as was before her to substitute my view on that matter for hers, it is open to me to hold, and I do so, that these were exceptional circumstances such as entitled the Public Guardian to be able to authorise payment of remuneration based on a "time and trouble" account.
  • No issue is taken with the computation of the account submitted, and therefore it is a short step to say that if the circumstances are to be regarded as exceptional, which I hold they are, and the account has been calculated in accordance with the prescribed method contained in the guidance, albeit reduced to a claim of just over one-half of the hourly rate to which he would have been entitled, then the account submitted in each case ought to have been approved and authorised for payment.
  • Of course, it may well follow that since the basis for reaching my decision is that the need to do this work was unprecedented and unforeseeable, then in respect of those appointments which have been made subject to a time limit, it might well be that the need subsequently to renew them might not at that time constitute exceptional circumstances. It would not be wise for me to say now that they will definitely not do so, but it must be that the argument will be more difficult to justify. The guardian who knows he or she is under obligation to renew (assuming the conditions justify it) now knows to plan for the associated costs, and if a litigation is proceeding now which involves the appointment of a financial guardian, those responsible for assessing the costs of administration may want to consider factoring in the expected costs of any renewals.
  • At least the published test does state that one has to demonstrate exceptional circumstances, but no claimant can know what the decision maker will hold to constitute such unless and until there are some published decisions.
  • As to the reasonable expectation argument, it is clear that this applies to the principal way in which a financial guardian is remunerated, because such a person knows that payment will be made on the basis of a percentage commission, and will therefore know the probable amount actually to be paid.
  • I think the point is a little more difficult when considering the only published alternative method of payment, the "time and Trouble" method, because to qualify, one has first to establish exceptional circumstances, and they will be determined on a case by case basis. However, I suppose it can be said that if one does manage to persuade the Public Guardian that exceptional circumstances exist, then at least there will be a legitimate expectation that the basis for payment is on an hourly rate calculated by one prescribed method, and by no other.
  • That leads me onto a consideration of the actual method adopted by the Public Guardian to value the remuneration due to Mr Frame in these two cases, once it had been decided in principle that he was due payment of some remuneration.
  • Unhappily, I cannot agree that the chosen method was an appropriate one, albeit I appreciate completely that it was chosen with a view to its subsequent general application. Using an average cost of application as the starting point, and then increasing it and in fact doing so twice does not seem to me to create the necessary desirable degree of certainty. In any event, such a method of calculation does not feature in the published guidance. Further, if one is using the average figure for new applications as the guide, that will be composed entirely of legal fees and outlays, since until the application is granted, there is no guardian in place, and no costs incurred by such a person.
  • If one takes the average cost of renewals as the guide, that figure does not provide a reliable comparator either in my opinion, since it would not be comparing like with like. That figure is derived from the renewal applications made under the terms of the 2000 Act, where the guardian was first appointed under that Act. Many of those guardians were appointed for the default period of 3 years, which is relatively short, and some for even shorter periods than that. In those cases, much of the basic information which required to be gathered for the original application has not changed in the relatively short period of time which has elapsed.
  • That is not the situation here. A guardian who has been in post for 20 years, and who has never before required to collate the wealth of information required to comply with the whole 2000 Act statutory scheme, is in a very different position from the guardian renewing his or her 2000 Act appointment, but for the reason I pointed out earlier, that consideration may well not apply in the future to those who have now become guardians appointed under the full provisions of the Act. They will be expected in the future to have acquired that information and to have kept it current.
  • It therefore seems to me that in the circumstances which necessitated these applications, the guardian was entitled to take the view that his costs in connection with the renewal process arose in exceptional circumstances, and that the Public Guardian was wrong to hold that they did not and to hold that that the "Time and Trouble" aspect of the published guidance therefore did not apply.
  • I hold that the circumstances were exceptional, and that the decision ought to have been that they were and that Mr Frame was entitled to have an account approved on the "Time and Trouble" basis. Since there is no dispute with the composition of his account, or of the basis of calculation, being in fact lower than the published guidance, and since all the other qualifications attached to the guidance are satisfied, it follows that I will allow these appeals and determine that there be fixed as payable to Mr Frame the sum of £1487.50 as additional remuneration for his work in connection with the renewal application for the guardianship of HP, and the sum of £1105 as additional remuneration for his work in connection with the renewal application for the guardianship of LG, both sums to be paid during the accounting period during which the work was done.
  • It follows that since this matter required a full contested hearing in which the appellant was successful, he should be awarded his expenses against the Public Guardian.

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