Contentious Probate

When a family member passes away, the last situation anyone wants to find themselves in is being embroiled in a family feud.  Sadly, however, disputes can easily arise.  This is sometimes due to poor planning by the deceased who may not have made a Will or their Will may simply be open to challenge by people who consider they should have received a benefit. 

Contentious Probate disputes have been on the rise in recent years.  Looking back over the last 25 years provides the answers as to why.  There has been a steady rise in asset values, people are leading more complex family lives and more recently the recession has also become a contributing factor as money has become tight for many.  People are also living longer and there has been a rise in diseases such as dementia, which has caused an increase in the number of cases based on the argument of lack of mental capacity to make a valid Will.  The end result is larger estates to fight over with more people who think there is a reason to litigate.

If such a dispute does arise, an amicable resolution between the parties (without lawyers being involved) is normally the best initial approach.  If the differences cannot be resolved, then it is important to take advice from specialists.  It may be that an amicable resolution can still be facilitated by skilled professionals who are able to bring specialist knowledge and some distance between the parties, which may be the missing ingredient to a successful settlement.  If settlement is not possible or appropriate, then litigation should be seen as a last resort.  Litigating a Contentious Probate dispute can be very expensive as extensive investigations need to be carried out and emotions run very high.

Who Should Bear the Costs?

The advice of a lawyer comes at a price but often the fees associated with the dispute may be paid out of the estate of the deceased.  Parties to a dispute must however not fall into the common trap of making the assumption that all fees will always be met by the deceased's estate.  Many practitioners who are not specialists in Contentious Probate believe that legal fees will always be paid out of the deceased's estate.  This is a myth and anybody who believes in it or receives such advice from a practitioner may find themselves on the receiving end of an unexpected costs order which they had not budgeted for.  The best approach is for your solicitor to agree, in writing, with the other side that all costs will be borne by the estate which is at the heart of the dispute.  This should help to deal with the costs position in an out of court settlement situation but such an agreement will not necessarily guarantee protection if the dispute reaches Court. 

The General Costs Rules

The reality is as follows.  In litigation there is a general rule that the unsuccessful party will be ordered to pay the successful party's reasonable costs.  However, the trial Judge will always have a discretion in relation to costs awards.  Various factors may be taken into account by the Judge including the conduct of the parties and their legal advisers.  Those factors can influence the outcome in relation to costs to a great extent and the Judges are mindful of the fact that if costs were always paid from the estate, this would open the floodgates to a barrage of litigation and could also encourage spurious claims.  One Judge once described the careful balance to be struck as "parties should not be tempted into a fruitless litigation by the knowledge that their costs will be defrayed by others" but "doubtful wills should not pass easily into proof by reason of the cost of opposing them."  

Exceptions for Probate Disputes

The general costs rules allow Judges to make a different order to the usual "costs follow the event" rule.  The legal system acknowledges the fact that often the dispute is in no way the fault of the any of the parties and a large proportion of the costs may be incurred carrying out investigations due to the fact that the principal witness has died.  Therefore, in probate cases there are two long-established principles which allow Judges to make exceptions to the general costs rules and make a different order. 

These are as follows:

1. Where the claim is the fault of the deceased or a beneficiary ie. there is confusion or uncertainty surrounding the deceased's will; and
2. Where the circumstances of the particular case raise reasonable grounds for investigation.

It should also be noted that costs orders in probate can often be multifaceted and the above exceptions are not always applied rigidly.  In the landmark case Kostic v Chaplin in 2007, the High Court examined the application of costs rules in probate cases.  In this case it was found that the deceased, who had left £8.2 million to the Conservative Party and accordingly disinherited his only son, had lacked capacity to make a valid Will.  The collective costs of the parties were £900,000 which is unusually high for a Contentious Probate dispute.  The Court took a very detailed approach which looked at the various steps which were taken by both parties throughout the litigation. 

The Judge's decision can be summarised as follows:

1. Both parties' costs for the initial stage of the litigation would be funded by the estate.
2. For the second stage of the litigation, the Judge awarded no order as to costs, which means that each party bears its own costs.
3. For the final stage of the litigation, the Defendants were ordered to pay the Claimant's costs.

The Judge's reasoning was that by the end of the first stage of the litigation, the Defendants had had an adequate opportunity to consider their position based on the available evidence and the strength of the Claimant's case was obvious.

Conclusion

Every litigation client should be prepared at the outset to cope with the worst case scenario of losing and having to pay both their own costs and the costs of the other side.  Contentious Probate clients need to heed the same advice.  The main purpose of this article is to convey the importance of having an adviser who knows how to conduct the litigation at every step of the way, not just from a tactical and legal point of view, but also mindful of the potential costs consequences.

Article written by Julia Pearson of Clarion Solicitors, Leeds