UK: Costs And Probate Disputes

Last Updated: 7 March 2012
Article by John Darnton

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.

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