Appendix 1
Capacity and Self-Determination (Jersey) Law 2016 (the Law)
Capacity and Self-Determination (Supervision of Delegates etc) (Jersey) Regulations 2018 (the Regulations)
The charging of fees by Delegates Consultation Response
1. Purpose of this paper
This paper discusses the responses received by the Viscount to the Consultation Paper dated 18 May 2018 (the Consultation Paper) on the proposed mechanism for charging of fees by both “lay” and “professional” delegates appointed under the Law. It also confirms the approach that the Minister for Health (the Minister) proposes to take in relation to the charging of fees by delegates.
2. The Minister’s proposed approach
The Minister now proposes to proceed to implement the mechanisms for the charging of fees as set out in the Consultation Paper being, in brief, that:
a. Lay delegates may charge a fee calculated by reference to the amount of P’s gross annual income;
b. Subject to the relevant work being in the best interests of P, and subject to certain criteria, discussed in detail in the Consultation Paper, professional delegates may charge professional fees for the work performed by them in their role as delegate of P; and
c. No statutory mechanism be established for the charging of fees by “health and welfare delegates”. Such a delegate will, however, be able to apply to the Court for a fee charging structure to be formulated where appropriate in the circumstances of the delegate’s role and the level of involvement required by the delegate in health and welfare decisions relating to P.
All delegates will be permitted to recover expenses and disbursements incurred by them in the conduct of their role from the assets or income of P, where the incurring of such expenses and disbursements is in the best interests of P.
The Minister has instructed that law drafting instructions be prepared so that these fee-charging mechanisms are contained in an appropriate order to be issued under the Law.
3. Summary of responses received
Only one written response was received to the consultation paper. The firm submitting the response indicated that, subject to some specific concerns and observations (discussed in paragraph 4), it strongly supported the suggestions set out it in the Consultation Paper.
Two firms have discussed the paper with members of the Project Team and each indicated that they also supported the proposed mechanisms for charging of fees.
No person or firm has notified any member of the Project Team that they oppose or object to the proposed mechanisms for charging of fees.
4. Concerns raised by respondents
One respondent raised the following concerns and observations. The Minister’s response to these concerns is shown below:
Concern
Minister’s response
With regard to the proposal that a Delegate should file an annual plan and report:
(i) The production of further documents will inevitably result in additional cost which we assume will be chargeable to P (in the instance of professional delegates). We would respectfully propose that a standard form plan and/or report be produced which enables a Delegate to comply with this requirement at minimal cost.
The Minister believes that the production of annual plans and reports will provide a simple and cost-effective means of reviewing the activities of delegates and the appropriateness of any fees charged. They will also require the delegate to consider what actions may be needed in any given year, and what the likely fees may be, and then to reflect on actions that were actually required and performed. The Minister accepts that circumstances may change during a year and that action may be needed that was not foreseen at the commencement of the relevant period, with an impact on fees actually charged.
The Minister anticipates that, in the majority of cases, the annual plan and report will not be lengthy or highly detailed documents and, accordingly, that preparation time should not be significant. In complex cases, involving significant or a multitude of assets (expected to be rare), the length and detail of plans and reports may increase but the firm may seek remuneration for time spent in preparing such documents, subject always to acting in P’s best interests throughout.
The Minister agrees that standard templates will be of assistance. Templates are currently in preparation and will be issued by the Judicial Greffe through a dedicated online page.
(ii) Whilst we agree with the proposal for these plans to be implemented, there are some inherent issues in the take-on process that may, at least in the first year, make compliance with this requirement difficult in practice:
• Lack of Information:
It is common for the Curator to have very little information as to the assets/liabilities of an Interdict upon appointment. This is particularly true in the absence of family members or friends who are able to assist with information gathering.
• Lack of asset holder co-operation
We have experienced significant delays with asset holders who are repeatedly failing to deal with registration of the Curatorship on interdicts accounts and consequently do not provide relevant information within a reasonable timeframe.
• H&SS / LTC assessments
There is often a delay of several months from the date an Interdict is placed into care before they are assessed by H&SS for a “care level” to be determined. Alongside this process the Curator must complete an LTC application form, which can only be done once information is available from asset holders and which, once submitted, takes several weeks for an LTC Determining Officer to fully assess the claim. Only once these matters have been addressed are we able to properly consider the costs of the Interdict’s care and formulate an appropriate plan for managing the Interdict’s assets moving forward.
In view of the above matters we suggest that it is necessary for the plan submitted at the commencement of an appointment, to allow a Delegate (a) a minimum of 4 months to file the plan and (b) scope for unknown or unresolved elements to be noted.
The Minister accepts that there may be unavoidable delay in gathering the information that is needed to allow an annual plan to be prepared at the commencement of an appointment.
The Minister proposes that, on commencement of an appointment, an annual plan should be filed within three months of the appointment. By that stage, the delegate should have a reasonable idea of what the extent of the assets are and what actions are likely to be required in the first year. It is not the intention that the annual plan (particularly in the first period) is a “hard and fast” description of what the delegate will actually do and the Minister accepts that changes may occur over the period. It would be acceptable for the plan to reflect that there are matters outstanding that may impact on the actions required.
To the extent that matters are delayed, or come to light after the plan has been submitted, they can be reflected in the Annual Report in respect of the relevant period.
Similarly, any changes in circumstances (e.g. serious and unexpected illness of P after the date of the annual plan, having an impact on care requirements and the costs) can be explained in the annual report.
[We] wish to take this opportunity to note the significant impact which failures and inefficiencies within third party organisations have upon the costs incurred by a Curator. The issues we have encountered with several banks in Jersey over recent years has been a particular burden and we would welcome any assistance which the Minister or the Judicial Greffe could offer to alleviate these issues.
The Minister is disappointed and concerned to note these comments.
The Viscount, on behalf of the Project team, has agreed to write to the major banks in the Island and to the Jersey Bankers Association highlighting these concerns and asking that appropriate training is given to all affected bank staff to avoid these issues.
24th July 2018
Appendix 2
Capacity and Self-Determination (Jersey) Law 2016 (the Law)
Capacity and Self-Determination (Supervision of Delegates etc) (Jersey) Regulations 2018 (the Regulations)
Consultation Paper - The charging of fees by Delegates
- Purpose of this paper
The purpose of this paper is to set out the Minister for Health’s (the Minister) proposals for, and to seek the views of interested parties about, the basis on which a person who is appointed as a delegate for another person (P) under the Law may charge fees for acting as delegate and the way in which any fees should be calculated.
This applies to people who act as a delegate in a lay capacity (for example a spouse, family member or friend of P) and to professional persons acting as a delegate, such as lawyers and accountants.
- Background
When the Law comes into effect, the concept of curatorship, presently established under the Mental Health (Jersey) Law 1969 (the 1969 Law) and the Mental Health Rules 1971 (1971 Rules), will be replaced by the new role of “delegate”, governed by the Law.
Delegates will be appointed by the Royal Court, under Article 24 of the Law, in circumstances where a person lacks capacity to make a decision about a matter concerning his or her health or welfare or his or her property and affairs.
Regulation 18 of the Regulations enables the Minister, by order, to make provision as to professional fees to be charged by delegates in respect of their functions, including in particular the following matters:
(a) the amount of fees, whether by reference to a prescribed scale of fees or by reference to a percentage of P’s assets, or otherwise;
(b) the services in respect of which fees are chargeable;
(c) requirements to provide estimates of fees to the Court, including the matters or services as to which such estimates must be provided;
(d) requirements for agreement by the Court of such estimates and powers of the Court to confirm such estimates;
(e) powers of the Court to impose terms and conditions, in relation to particular estimates of fees or to such estimates generally;
(f) powers of the Viscount to refer any matter or question arising as to such fees or estimates to the Court for the Court’s determination;
(g) powers of the Court and of the Viscount to seek further information as to fees or estimates from the delegate or from any other person concerned;
(h) powers of the Court and of the Viscount exercisable in cases where an estimate of fees is exceeded; and
(i) cases in which exemptions from, or reductions or remissions of fees, may be granted.
- The current law
Paragraph 13 of the Mental Health Rules 1971 sets out the basis on which fees may be charged by curators appointed by the Court under the 1969 Law as follows:
(1) Unless otherwise directed by the Court in any special case, a curator shall be entitled to receive by way of remuneration a percentage of the interdict’s gross annual income, calculated in accordance with the following scale –
Where the gross annual income does not exceed £10,000 | 5% |
Where the gross annual income exceeds £10,000 – | |
on the first £10,000 thereof ... | 5% |
on the balance in excess of £10,000 | 2½% |
(2) Notwithstanding that a curator receives remuneration in accordance with paragraph (1) –
(a) a curator being an advocate, solicitor or other professional person shall be entitled to charge and be paid out of the interdict’s estate usual professional fees for doing, or properly incurred by the curator in employing another professional person to do, in connection with the administration of the interdict’s estate, any work normally requiring professional assistance;
(b) a curator not being an advocate, solicitor or other professional person shall be entitled to repayment out of the interdict’s estate of any expenses properly incurred by the curator in employing an advocate, solicitor or other professional person to do, in connection with the administration of the interdict’s estate, any work normally requiring professional assistance.
Paragraph 13(1) allows all curators to charge a fee calculated by reference to the interdict’s gross annual income in the relevant year and to recover any expenses incurred in engaging a professional person to do work in relation to the administration of the estate, where such work would normally require professional assistance.
It is, however, thought to be rare for lay curators (such as a family member or spouse) to charge fees for themselves for acting as curator.
Paragraph 13(2) is open to some interpretation but one meaning is that a curator who is an advocate, solicitor or other professional person (a professional curator) may charge a fee under paragraph 13(1) and also their usual professional fees for doing “any work normally requiring professional assistance”.
While there may be an argument as to how far a professional curator may charge professional fees and what “any work normally requiring professional assistance” may constitute (examples would be conveyancing of property or conducting court proceedings), it is understood that many professional curators charge fees on the basis of their usual charge-out rates for all work done by them in administering the assets of the interdict, including routine administration of the estate. It is not apparent how far they may also charge fees calculated under Paragraph 13(1).
Professional curators do normally charge fees and their fees can be substantial, depending on the amount of work required in the administration of the assets. All fees are paid from the assets belonging to P. It is feasible, therefore, if fees are large, for P’s assets to be dissipated by professional fees.
Under the 1969 Law, there is no mechanism for the fees charged by a curator to be challenged or set aside, other than by an interested party bringing a representation to Court.
The Minister has concluded, therefore, that the extent to which delegates may charge fees should be clearly set out in the Order, to avoid ambiguity and dispute as to the amount of fees that may be charged and the manner of their calculation. The Minister accepts that delegates should be entitled to charge an appropriate fee for acting as a delegate for another person should it be appropriate and they wish to do so.
- Charging of fees by professional delegates
In the UK, a person may be appointed as a deputy or guardian for another person (P) where P does not have capacity to make decisions about his property and affairs. The basis on which fees may be charged is different in Scotland and England & Wales.
- The basis for charging fees in Scotland:
In Scotland, remuneration payable to guardians (including professional guardians) is determined by the Office of the Public Guardian (Scotland) (OPGS). Specified minimum and maximum awards may be made which take into account the capital value of P’s assets and reflect a sliding scale from 3.75% to 1.5% in the first year. In subsequent years, the fee awards reduce, with a range from 3.25% to 1.25%. The scales are set out below:
Year 1:
Capital Value of Estate | Remuneration as % of Value | Min. Max. Award Award |
£0 to £100,000 | 3.75% | £600 £3,750 |
£100,001 to £250,000 | 3.25% | £3,750 £8,125 |
£250,001 to £500,000 | 2.25% | £8,125 £11,250 |
£500,001 to £750,000 | 2.00% | £11,250 £15,000 |
£750,001 to £1,000,000 | 1.75% | £15,000 £17,500 |
£1,000,001 and above | 1.50% | £17,500 £19,500 |
Year 2 and subsequent years:
Capital Value of Estate | Remuneration as % of Value | Min. Max. Award Award |
£0 to £100,000 | 3.25% | £600 £3,250 |
£100,001 to £250,000 | 2.75% | £3,250 £6,875 |
£250,001 to £500,000 | 2.00% | £6,875 £10,000 |
£500,001 to £750,000 | 1.75% | £10,000 £13,125 |
£750,001 to £1,000,000 | 1.50% | £13,125 £15,000 |
£1,000,001 and above | 1.25% | £15,000 £19,500 |
The capital value of P’s assets excludes immoveable property in which P lives or where P mostly lived.
The fee payable in the first year is higher, to take account of the work required in, among other things:
- Submitting an inventory and management plan;
- Collecting in P’s assets; and
- Obtaining independent financial advice, if required.
Only in exceptional circumstances will the OPGS authorise part or the whole of a guardian’s fee to be paid on a “time and trouble” basis. Fees are payable on an annual basis at the end of the relevant accounting period although outlays and expenses may be recovered in advance of year end accounting.
- The services in respect of which fees are chargeable in Scotland
Under the Scottish system, the remuneration fixed as above is payable for carrying out all routine financial guardianship functions, in line with the powers detailed in the court order under which the guardian is appointed. These include, among others:
- Agreeing the financial management of P’s estate
- Identifying assets and notifying relevant parties of the guardian’s appointment
- Preparing and lodging the inventory of the estate
- Preparing and lodging accounts
- Management of funds
- Purchase of goods for P
- Administration of P’s property or accommodation issues – liaising with utility companies, arranging insurance and property maintenance.
In addition to the remuneration above, fees may be charged for:
- Selling or buying immovable property (on the basis of a taxed legal account, approved by the OPGS in advance)
- Payment to specialist advisers
- Where the guardian has used their professional expertise, e.g. where a court action has been pursued on behalf of P, their normal hourly rate may be charged. In this case, an account of expenses, taxed by an auditor, must be approved by the OPGS before being charged to P’s estate.
- The basis of charging fees in England and Wales
In England, fees are monitored by the Office of the Public Guardian (OPG). The OPG and the Senior Courts Costs Office has issued guidance for professional deputies when submitting estimates of costs and bills for assessment and to explain what can be claimed for in general management bills. It appears that in England and Wales, professionals may charge fees on a time-spent basis and that they are not remunerated by reference only to the value of the estate.
The current English model was introduced following a “Fundamental Review of the Supervision of Court Appointed Deputies by the Public Guardian”, a report on which was published in December 2014. One of the drivers for the review was concerns among Members of Parliament with the charges being levied by professional deputies in specific cases. One of the aims of the implementation of the OPG’s new model was better control of professional deputy charges.
The new model included introduction of “annual plans, with work and cost estimates, which can be scrutinised beforehand and after the fact, and a comparison made”. The model includes:
- The provision of forward-looking annual plans, including details of major decisions that the deputy anticipates making in the coming year, such as the sale of property, major investments or gifts as well as estimates of fees for the period. In considering fee estimates, the OPG’s first consideration will be whether the proposed charges are proportionate with the size of the estate;
- An annual report, to include a “backward” review of the work the deputy has done and confirmation of actual fees; and
- The provision of asset inventories following the appointment, to be updated annually.
Professional deputies are also encouraged to develop greater transparency of costs with P and with their family as a matter of good practice.
At the end of the relevant year, the OPG will compare actual fees incurred, as set out in the annual report with the forecast contained in the annual plan. If the actual fees vary from the estimated fees by more than “reasonable tolerances”, the OPG will discuss the reasons with the deputy; there may be circumstances in which legitimate costs could not have been foreseen. In some cases, the OPG may then engage with the Senior Courts Costs Office (SCCO) as to the level of fees.
The OPG’s Guidance on Professional Deputy Costs highlights that a professional deputy is entitled to general management costs which are:
- Reasonable
- Proportionate to the total value of the client’s estate, the amount of work done and that any work should be done by the appropriate fee earner.
It also emphasises the importance for a professional deputy to demonstrate that they are acting accordingly and always in the client’s best interests, especially but not exclusively, where the assets are being significantly or rapidly depleted. A professional deputy must take a balanced approach and exercise professional judgment in all aspect of their role, particularly where client funds are concerned. The OPG may make an application for the removal of a deputy where there is a concern that they are not acting in their client’s best interests.
- The Minister’s proposals on remuneration for delegates
Health and Welfare delegates
The Minister does not propose at present to establish a fee-charging structure for delegates who are appointed only with health and welfare responsibilities. The Minister expects that those appointments are likely to be made predominantly in favour of family members and that it is very unlikely that a lawyer or accountant would assume responsibility for such decisions on a professional basis. As a result, the Minister considers it is unlikely to be necessary to establish a mechanism for the charging of fees by delegates having only these responsibilities at this stage. This will, of course, be kept under close review.
Where a person assumes health and welfare responsibilities, however, and it appears that the work involved in fulfilling these responsibilities may be substantial and/or the delegate believes that a fee is appropriate, the Minister envisages that the Court would be amenable to formulating and agreeing a fee structure, on an application by the delegate to the Court, at the time of their appointment or on an ad hoc basis thereafter. The Court will also, in these circumstances, have to consider the mechanics of payment of any such fee, the delegate in this case having no direct responsibility or access to P’s assets. In this event, the Minister would expect that similar principles will apply as apply to the charging of fees by a property and affairs delegate (see below).
Property and Affairs delegates
The Minister proposes a dual approach to fees for delegates having responsibility for P’s property and affairs, depending on whether the delegate is a lay person, acting in their personal capacity, or the delegate is a professionally qualified person, acting in their professional capacity.
If any delegate charges fees for acting as a delegate, it must always be subject to the paramount consideration that any action they take, and consequently the amount of any fees charged to P’s estate, must be taken in the best interests of P. It will be a matter for the delegate to keep appropriate (and proportionate) records to evidence this.
Lay delegates
(i) Fees
It is thought to be unusual for a lay person to charge a fee for acting as a curator under the 1969 Law. A mechanism exists, however, for a lay curator to charge a fee, as set out in Paragraph 13(1) of the 1971 Rules.
The Minister believes that there may be cases where it is appropriate for a lay person to be able to charge a fee for acting as a delegate of P’s property and affairs. It is also appropriate that a lay curator should be able to seek reimbursement, from P’s estate, of any costs and expenses they incur, including professional fees, as a consequence of managing P’s property.
The Minister proposes, therefore, that for lay delegates, the model that exists for curators should be retained in principle, so that a lay delegate may charge a fee that is no more than a percentage of the income earned by/accrued to P during the relevant accounting year. A sliding scale will be retained, to take account of the fact that a bigger estate may not necessarily involve more work than a small one, depending on the nature of the property management required. An example of a scale is:
Income of P | Percentage fee that may be charged |
Gross annual income does not exceed £10,000 | 5% |
Gross annual income exceeds £10,000 but does not exceed £25,000: On first £10,000 On the balance between £10,001 and £25,000 | 5% 3% |
Gross annual income exceeds £25,000: On first £10,000 On the amount between £10,000 and £25,000 On the excess over £25,000 | 5% 3% 2.5% |
The Minister proposes to retain the current Jersey model under the 1971 Rules of charging fees by reference to income of P rather than assets.
The Minister also proposes that it will be open to a lay delegate, in exceptional circumstances, to bring a representation to Court to seek the payment of fees in excess of the fixed rates set out above. In this case, the delegate would have to satisfy the Court that an exceptional volume of work was required in the management of P’s estate and that the relevant work was required in P’s best interests. The Court would be able to make an order as to the payment of fees, with time limitations and other terms and conditions, as it thinks fit.
Fees based on P’s annual income will be calculated and paid at the end of the relevant accounting period. The fees payable at the end of an appointment will be paid on a pro-rata basis, depending on the length of the relevant accounting period that the delegate acted. Such fees may be claimed against P’s new delegate, P or P’s executor or personal representative, as applicable.
The amount of the proposed fee must be included in the annual report submitted by the Delegate to the Judicial Greffe annually. The Judicial Greffe may question the calculation of the fee, if it considers it to be incorrect. Any dispute as to the amount of the fee will be referred to the Viscount for investigation and resolution.
(ii) Recovery of expenses
The Minister also accepts that it is appropriate that if a delegate incurs expenses in the management of P’s estate, they should be able to seek reimbursement of the expenses from P’s assets. All expenses should be incurred only in managing P’s assets in the best interests of P and must be reasonable. This includes legal and other professional fees, for example, incurred in pursuing claims
on behalf of P, selling property belonging to P and preparing complex accounts or tax returns (if P’s assets justify that expense).
Lay delegates will be expected to provide an annual plan (see below) to the Judicial Greffe at the start of their appointment, and annually while the appointment continues, setting out their anticipated expenses and costs for the year. Expenses that were not foreseen at the start of the year may still be claimed but the delegate will have to be able to explain in their annual report (see below) the reason why the actual expenses and costs at the end of the year are greater than the estimate and confirm that they were incurred in P’s best interests.
Expenses may be recovered during the course of the relevant accounting period. If the amount of expenses is challenged after being recovered from P’s estate, if agreement is not reached between the delegate and the Judicial Greffe, the matter will be referred to the Viscount for resolution.
Professional delegates
The Minister proposes to adopt a similar scheme for the charging of fees by professional delegates (lawyers and accountants) as exists in England and Wales.
The OPGS in Scotland and the OPG in England and Wales supervises guardians and deputies and deals with complaints against them. In Jersey, the Viscount will regulate and supervise delegates, which will include dealing with complaints and concerns as to fees. The Judicial Greffe will also have a role in receiving accounts from delegates and providing guidance to them.
Neither the Viscount’s nor the Judicial Greffe’s role is exactly the same as that of the OPGS or OPG and the Minister proposes that neither the Viscount nor the Judicial Greffe should be responsible for determining fees payable to professional delegates.
The Minister proposes, therefore, that professional delegates should not be able to charge a fixed income-based fee for acting as a delegate but that they should be able to charge reasonable professional fees.
Similar criteria as apply to deputies in England and Wales will apply in Jersey, in that such fees must be:
- Incurred only in P’s best interest
- Reasonable
- Proportionate to the total value of P’s assets and the amount of work done
- Any work should be done by an appropriate fee earner (i.e. if a partner of a firm is appointed as delegate, they should arrange for work to be performed by junior lawyers or administrative staff where appropriate and not deal with routine tasks personally)
- Delegates should consider carefully whether the charge-out rates that they may apply in commercial or corporate matters are appropriate or suitable when acting as a delegate (i.e. the amount of charge-out rate must be proportionate).
A professional delegate must be able to demonstrate that they are acting appropriately and always considering P’s best interests, in particular, where the assets are being significantly or rapidly depleted. A professional delegate must exercise professional judgment in all aspect of the performance of their role, particularly where client funds are concerned. At all times, the interests of P must come first.
Following the OPG model, the Minister proposes that all delegates must file with the Judicial Greffe:
- An annual plan at the commencement of the appointment and each year thereafter, to include details of any major decisions that the delegate anticipates will be required in the coming year (to include the sale of property, major investments or gifts) and estimates of fees and expenses for the period; as well as routine spend for the maintenance and benefit of P;
- An annual report at the end of the relevant accounting period, to include a review of the work the delegate has done and confirmation of actual fees and other expenses; and
- The provision of asset inventories following the appointment, to be updated annually.
These requirements will apply both to lay delegates, who will also set out any major decisions they expect and the likely costs and expenses, and to professional delegates, who will be expected to set out a clear estimate of their own fees and charges and any other expenses. Both will then have to explain any discrepancies between estimated fees and charges and the actual amounts in their annual reports at the end of the relevant accounting period. The extent of the information to be provided will depend on the extent and complexity of P’s financial affairs and assets. It must also be reasonable and proportionate to the work involved in managing P’s property and affairs.
Where the actual fees charged are significantly different from the estimate, the delegate will be expected to be able to explain why the difference has arisen. If the Judicial Greffe is not satisfied with the explanation, it may notify the Viscount of the discrepancy. The Viscount may investigate and seek to resolve any dispute applying his or her Regulatory powers. If necessary, the Viscount shall be entitled to ask for any fees to be taxed by the taxation personnel in the Judicial Greffe. Where the Viscount considers it appropriate, the question of the fees charged may be referred to the Court for approval retrospectively or for an order that the fees be reduced and a repayment be made to P’s estate.
The Minister, with the assistance of the Judicial Greffe and the Viscount will issue guidance to professional delegates about the estimating and charging of fees to P’s estate, clarifying expectations, in due course.
Comments
If you have any comments or observations on the proposals regarding the charging of fees by delegates, please send them by post or email, by no later than 8 June 2018, to:
Alison Reddyhoff
Regulatory Officer, Delegates
Viscount’s Department
Morier House
St Helier
Jersey JE1 1DD
Email: A.reddyhoff3@gov.je
18 May 2018
gov.je