Costs in Contentious Probate Claims

Charles Dickens in Bleak House admirably and effectively set out the importance of costs in contentious probate claims:

“It’s about a will, and trusts under a will – or it was, once. It’s about nothing but costs now. We are always appearing, and disappearing, and swearing and interrogating, and filing, and cross-filing and arguing, and sealing, and motioning, and referring, and reporting, and revolving about the Lord Chancellor and/or his satellites, and equitably waltzing ourselves off to a dusty death, about costs. That’s the great question. All the rest by some extraordinary means, has melted away”.

I would agree that it is always vitally important to consider costs at the outset of a contentious probate matter and it is not the case that costs will simply be borne by the estate as a matter of course, which is a common misconception.

The starting point is governed by the Civil Procedure Rules, which provide that the unsuccessful party will normally be ordered to pay the successful party’s costs in litigation. However, when making an order for costs, the court will also have regard to the conduct of the parties.

Additionally, the general rule on costs is subject to various modifications in respect of contentious probate matters.

In actions concerning the validity (or otherwise) of a will, personal representatives can expect an indemnity from the estate unless their conduct violates their fiduciary duties. However, this rule will not apply if the personal representative is also a beneficiary and if unsuccessful costs are likely to be ordered against that beneficiary. In addition, the rule will not apply if the personal representatives actually knew the will was invalid but still tried to prove its validity.

Those who unsuccessfully challenge a will are likely to be personally liable for costs, although costs can be ordered from the estate where there were reasonable grounds for questioning the execution of the will and where there were reasonable grounds for questioning the testator’s capacity.

If costs are ordered against an unsuccessful challenger personally, this can have devastating financial consequences. The courts believe that a person challenging a will is participating in a commercial transaction and must accept the risks of litigation. This is demonstrated in the case of Lilleyman v Lilleyman [2012] EWHC 1056 (Ch), in which Briggs J stated that a widow who made an Inheritance Act claim was “engaged in a high risk venture in which she played for high stakes and, in substance, lost”.

On the other hand, there is also a real possibility that even if a challenge to a will is successfully defended, the unsuccessful party’s costs may be borne by the estate. This may substantially erode the estate to the extent that the beneficiaries receive very little, if anything at all, rendering the litigation fruitless. In cases of this nature, the importance of alternative dispute resolution takes on even greater significance.

The moral of the story, which is as relevant now as when Charles Dickens wrote Bleak House in 1853, is to always consider cost consequences at the outset of any contentious probate matter.

Paul Davis is a Solicitor at BHW Solicitors in Leicester and regularly writes on contentious probate matters. Paul can be contacted on 0116 281 6231 or by email at paul@bhwsolicitors.com.