Summary
The Claimant was unsuccessful in two claims;
- A claim that the will was invalid as a result of the deceased not having testamentary capacity
- A proprietary estoppel claim
Costs in Contentious Probate Proceedings
The general rule (subject to the discretion of the court) is the same as in all litigation – costs follow the event (CPR 44.2). The successful party’s costs should be paid by the unsuccessful party.
The above is subject to exceptions in contentious probate proceedings where (i) the testator or those interested in residue caused the litigation or (ii) the circumstances reasonably lead to an investigation of the matter, in such cases costs lie where they fall.
Two costs issues arose in this case
- The formalities of a CPR part 36 offer made by the Defendant
- Whether one of the exceptions in contentious probate proceedings applied.
The Part 36 Offer
The Defendants made what was termed a part 36 offer shortly before the trial to settle the claim. As the Claimant had failed to beat that offer the Defendants argued that the costs consequences of CPR 36.17 followed.
The court disagreed. The Defendants’ offer was a defective part 36 offer. Within the offer the Defendant sought payment of its costs up to the end of the Relevant Period or, if later, the date of acceptance of the offer. in contrast CPR 36.13 (1) provides that
“..where a Part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings…up to the date on which the notice of acceptance was served on the offeror”
The effect was that CPR 36.17 was not engaged. [The Defendants’ terms as to costs would, on their face, have potentially required the Claimant to pay for costs post-dating acceptance of the offer]
The offer was therefore one which the court needed to consider in accordance with the general rule and its discretion rather then in relation to the self contained code in CPR 36.
Exceptions in Contentious Probate Proceedings
It was accepted that the Claimant should pay the Defendants’ costs of the failed proprietary estoppel claim.
The Claimant argued that the second limb in Spiers v English [1907] P 122 applied to the failed claim that the will was invalid due to the deceased lacking testamentary capacity. This provides that
“…if the circumstances lead reasonably to an investigation of that matter, then the costs may be left to be borne by those who have incurred them”
This principle was detailed in Davies v Gregory (1873) LR 3 P&D 28 in which it was stated that
“Where the facts show that neither the testator nor the persons interested in the residue have been to blame, but where the opponents of the will have been led reasonably to the bona fide belief that there was good ground for impeaching the will, there will be no order as to costs. Of course the opponents must have taken all proper steps to inform themselves as to the facts of the case, but if, having done so, a bona fide belief in the existence of a state of things which, if it did exist would justify litigation, then, although no blame should attach to the testator or to the executors and persons interested in the residue, each party must bear his own costs”
The court accepted in this case that there was a ‘reasonable belief’ for challenging the will as
- The medical and factual evidence as to the deceased’s capacity was doubtful. The deceased was suffering from Alzheimer’s disease
- Both medical experts (Professor Howard and Professor Jacoby) agreed that this was a case which was close to the line
- The solicitor taking instructions for the will had failed to follow the golden rule in Kenward v Adams as she had failed to obtain a medical opinion at the time of making of the will.
The golden rule is an example of best practice in circumstances in which the testator is ‘aged or has suffered a serious illness’ a medical expert should be consulted to ‘..satisfy himself of the capacity and understanding of the testator and record and preserve his examination and findings’.
HHJ Paul Matthews commenting on the golden rule stated (para 110)
“Instead it is a rule of practice, the following of which generally has a prophylactic effect in that it is much less likely that there will be a long and expensive dispute as to testamentary capacity. Re Key deceased [2010] EWHC 408 (Ch) WTLR 632 [8] per Briggs J. In the light of what has happened subsequently in this case, it is obviously regrettable that a medical opinion was not obtained”
The court made no order as to costs in respect of the will challenge. The costs were therefore borne by the respective parties who had incurred them.
Implications of the Case
It is arguable that the case will give encouragement to those pursuing contentious probate claims.
The facts of James are almost invariably replicated in contentious probate claims in which
- There are real issues of capacity
- Experts carrying out a retrospective analysis of capacity disagree
- The solicitor taking instructions fails to obtain a medical report
In those cases a prospective claimant may take the view that the risks of an adverse costs award are much reduced.
For probate practitioners it is a further example of the importance of adherence to the golden rule with a view to preventing post death claims.
It will be interesting to see if the costs judgment is the final chapter in this litigation.
Two further questions arise about the potential responsibility of the professionals involved for the parties’ costs.
The parties to the litigation may seek to recover their costs from the solicitor who prepared the will. There is a clear line of cases (following Worby v Rosser [1999] Lloyd’s Rep PN 972) that when a will writer’s negligent conduct in the will making process causes the estate to incur unrecovered costs in contentious probate proceedings that the will writer will be liable for those costs1. In Re Key (referenced within the judgment) the court joined the firm who had prepared the will and failed to follow the golden rule to show cause as to why a costs order should not be made against them. Here the Defendant residuary beneficiaries would say that the scope of the will writer’s duty to the testator and to them was to ensure that they benefited as intended under a valid will without having to pay litigation costs for the privilege. The Claimant may have a more difficult task in asserting that the will writer owed him a duty not to prepare a will the validity of which was questionable.
Secondly the Defendants may seek to recover the costs not awarded as a result of the defective part 36 offer made by their litigation solicitor. It of course remains to be seen what loss the Defendants will have suffered as a result of the defective offer.
Adam Draper
Partner
Rothley Law
1. In Worby v Rosser the court held that the actionable clam for loss was by the estate and not by the beneficiaries