There is no doubt that probate disputes are on the
increase. Recent years have seen a minor explosion in people
challenging the Wills of their late relatives. There is also
no escaping the fact that the legal costs arising out of such
disputes can be disproportionately large compared to the size of
the estate. It is commonly held belief that such costs will
fall to be met out of the estate but is this always the case?
A recent case demonstrates that, in the normal probate dispute, an
unsuccessful claimant may not be heavily penalised in costs but
that one who unrealistically pursues a weak case may come unstuck
and end up 'out of pocket'.
The starting point is contained in the Civil Procedure Rules
("CPR").
It is always in the discretion of the court whether or not one
party is required to make a contribution towards the legal costs
incurred by the other. The CPR however provide that, if the
court decides to make an order about costs, 'the general
rule is that the unsuccessful party will be ordered to pay the
costs of the successful party'.
The extent to which the 'general rule' applies in probate
disputes was recently examined by Mr Justice Norris in the case of
Wharton v Bancroft and Others. In this case, Mr
Wharton ("George") died in 2008 and was survived by his
second wife, Maureen, and by his three adult daughters.
George and Maureen had been living together for 32 years but only
married three days before George's death from terminal
cancer. He had been discharged from hospital earlier that day
so that he could spend his last few days at home. During this
time his solicitor visited him at home and took instructions from
him for a Will. This left his entire £4m estate to
Maureen, in contemplation of their marriage which took place the
same evening. Essentially George made a 'deathbed
Will' and then married his long term partner. The
solicitor who took instructions and prepared the Will was Mr
Bancroft.
Following George's death, his daughters challenged the validity
of his Will. They argued that it should be held to be invalid
either because George did not have the necessary knowledge and
approval at the time he gave instructions and signed the Will or,
alternatively, because the Will had been procured as a result of
undue influence by Maureen. Norris J rejected these arguments
and pronounced in favour of the Will. He then proceeded to
give a robust judgment on the question of the costs incurred by
Maureen and the executors and directed that the daughters should
pay these costs on an indemnity basis. The figures involved
were substantial. The daughters were required to make an
interim payment in respect of Maureen's legal costs in the sum
of £455,000 and a further interim payment in respect of the
executors' costs in the sum of £60,000.
Over the years, the court has disapplied the 'general rule'
in probate cases in two particular circumstances. The first
is when it is recognised that the cause of the litigation had its
origin in the fault of the deceased or of those interested in the
residue. In that situation, the court may properly order that
the costs be paid out of the estate.
In this particular case, the daughters argued that George had
created the difficulties by making the Will when he was in an
enfeebled state. It was also said that he had made a number
of inconsistent statements to various acquaintances about the
provision he had made, or intended to make, by Will.
Criticisms were also made about how Maureen had gone about the
administration of the estate.
Norris J found that there was no basis to attempt to argue that
George had caused the probate action. He quoted an earlier
authority in which it was said:
'Whilst it will not be possible to limit the circumstances
in which a testator is said to have promoted litigation by leaving
his own affairs in confusion, I cannot think it should extent to
cases where a testator by his words...has misled other people and
perhaps inspired false hopes in their bosoms that they may benefit
after his death. It does not seem to me that the judges who,
in the past, have laid down the practice that costs should be
allowed out of the estate where the fault of the testator has led
to the litigation, had in mind such a situation as
that'.
Norris J also found that there was no basis upon which he could
properly conclude that Maureen was the cause of the probate
dispute.
The second set of circumstances that may cause a disapplication of
the 'general rule' is that there is a sufficient and
reasonable ground (looking at the knowledge and means of knowledge
of the parties opposing the Will) to question the validity of the
Will for example for lack of capacity. In that situation, it
is considered that it may be appropriate for each party to pay
their own legal costs and the loser is not penalised.
It is perfectly legitimate for a person who thinks there is a
reasonable cause for inquiry to invite the Court to undertake an
enquiry without fear of being punished in costs and the CPR
contains a specific provision for this. However, Norris J
stressed that one must not confuse the concept of 'reasonable
cause for inquiry' with an assertion of undue influence.
It was necessary for the person mounting the challenge to have a
bona fide belief that there were good grounds for impeaching the
Will for want of knowledge and approval or for undue
influence. Norris J did not accept that the daughters had
such good grounds. Indeed he went so far as to say:
'The impression I have is that this is not a case in which
the available material reasonably led the daughters to the genuine
belief that the Will was invalid, but rather that the daughters
genuinely and passionately believed that the 2008 Will must be
invalid whatever the circumstances reasonably showed and would use
whatever material was available in order to sustain that a priori
position. They and those advising them took a commercial
decision about the strength of that case: and it has turned out to
be wrong'.
Norris J seemed particularly critical of the allegation of undue
influence quoting from an earlier case in which it was stated that,
if somebody unsuccessfully makes a challenge based on undue
influence and that challenge fails, they will be condemned in
costs. A case based on undue influence is one founded upon a
very serious charge which ought not to be pleaded or pursued unless
there was a proper factual foundation from which the necessary
inference of undue influence could be drawn.
The case of Wharton v Bancroft is a salutary tale for
those contemplating the challenge of a Will. This should not
be entered into lightly and it is wise to look at the facts in a
dispassionate way. It is easy to see why George's
daughters thought they had grounds to complain. There is a
duty on those seeking to propound a Will to show that the document
represents the testamentary intentions of the person making the
Will. The court will consider all relevant evidence and draw
such inferences as it can from such evidence. In a situation
such as this where the Will was prepared by a careful solicitor
those mounting the challenge must produce evidence which arouses
the suspicion of the court.
Wharton v Bancroft also contains a useful discussion about
ways in which those facing such a challenge can respond tactically
to deal with such a claim. Maureen made a comparatively
modest offer to pay each daughter £5,000 about 15 months
before the trial. The offer was made in such a way as to mean
that, given the eventual outcome, the daughters should be heavily
penalised in costs.
The contentious trust and estates team at BDB has significant
experience of both advising those contemplating challenging a Will
and those who need to respond to such a challenge.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.