The Public Guardian v Matrix Deputies Limited and London Borough of Enfield  EWCOP 14
Where the substandard conduct of a Deputy results in a costs order against them on the indemnity basis.
Matrix Deputies Ltd was a company whose core operation was supporting people who were not able to manage their own financial affairs. I.e. Matrix or persons who worked for them, were the deputies representing the interests of persons without capacity of one sort or another.
A number of concerns were raised by the Public Guardian as to the service offered by Matrix. The Public Guardian therefore made Applications seeking to discharge Matrix from the management of some 44 individuals’ finances.
These Applications were contested by Matrix until very shortly before Trial, when an agreement was reached whereby Matrix conceded the Applications on the basis of no admission. The issue of costs remained outstanding.
The Offending Conduct
The Public Guardian summarised their grounds for the Applications as follows:
“Matrix has failed in its duty of care… Further the general conduct of Matrix and pattern of behaviour gives rise to serious concern in relation to its management practices.”
London Borough of Enfield were bought in as interim Deputies and were ordered to investigate the dealings of Matrix. They did so, and as part of these investigations PWC were instructed to undertaken investigations and prepare reports on their findings. It was alleged that Matrix’s failings could be broadly categorised as follows:
- Excessive fee charging
- Inappropriate/inadequate arrangements for holding/recording client funds and transactions
- Conflicts of interest arising from inappropriate relations with other bodies
- Failure to provide information requested/comply with orders for disclosure
Of particular importance and concern was that Matrix Deputies Limited had entered an arrangement whereby upon the sale of protected parties’ properties, a commission was paid to Matrix by the selling estate agents, in clear breach of 8.58 of the Code of Practice.
Ultimately, the Court found:
“Matrix Deputies Limited is not a suitable organisation for either continued or new appointment of its authorised officers as property and affairs deputy…”
The Cost Consequence
While the Public Guardian had agreed to bear their own costs as part of the agreement, the London Borough of Enfield had not agreed to do the same. Their costs for investigations against Matrix Deputies Limited amounted to £250,000, the majority of which comprised the PWC fees.
Matrix Deputies argued that the London Borough should also bear their own costs of the action, highlighting that their conduct in the investigations had never been obstructive. They drew a distinction between financial abuse and fraud and highlighted that the case against them had ‘only’ identified failures in administration, rather than anything more serious.
For reasons best explained in the Court’s own words, Matrix were ordered to pay London Borough of Enfield’s costs on the indemnity basis.
“I am wholly unimpressed by the arguments made on behalf of Matrix Deputies Ltd. They fail to take account of the fact that these proceedings were bought by the Public Guardian, not by London Borough of Enfield. They overlook the fact that full disclosure was only obtained after an application for an enforcement type order. They fail to grasp the importance of “failures of administration” by a court-appointed deputy who bears significant legal obligations to get such administration right precisely because they are doing it on behalf of a person who is unable to do it for themselves and therefore vulnerable.
It is difficult to have sympathy for any organisation which exploits a position of trust for gain. In awarding the more onerous indemnity costs against Matrix, the Court provided the London Borough of Enfield with a more generous measure of recoverable costs.
While the vast majority of practices would not partake in the type of conduct that resulted in Matrix Deputies Limited being discharged, and having costs awarded against them, it is still a timely reminder of the standards expected when acting as Deputy. All conduct, including how fees/costs are dealt with, must be accurate and compliant or the consequences can potentially be severe, costly and professionally embarrassing.
Instructing a reputable costs firm such as MRN, who have experience in dealing with Court of Protection cases, ensures you are appropriately charging for what can be time consuming and challenging work; whilst satisfying your obligations to clients and the Public Guardian as well.