Who pays the legal costs in contentious probate proceedings and can offers to settle make a difference?

Parties in contentious probate proceedings often mistakenly believe that the costs incurred will be payable out of the deceased’s estate; however, this is not always the case. In fact, just as with other types of litigation, in most cases probate claims will follow the usual rule that the loser pays the winner’s costs.

There are three exceptions to this general rule which would result in different cost consequences:

1. If the Will is ambiguous or causes confusion and it is necessary for the Court to step in to determine its meaning and effect; or
2. If the conduct of the person who made the Will or the individuals who are interested in the residue of the estate are the cause of the litigation; or
3. If a defendant gives notice in his defence confirming that he merely insists upon the deceased’s Will being proved in what is called ‘solemn form’ and only intends to cross-examine the witnesses produced in support of the Will and the defendant has reasonable grounds for opposing the Will;

These exceptions are rooted in the fact that the Court in probate claims has a special inquisitorial role which is based on the notion that the Court is concerned to clarify and explain the deceased’s last wishes (in circumstances where the deceased is unable to speak for himself). The parties must therefore strike a balance between taking reasonable steps to establish what the deceased’s last wishes were in order to support their case, and taking an adversarial approach and pursuing the matter at all costs (which could expose them to unnecessary costs risks).

Making an offer to settle can change the usual costs rules but the formalities must be followed

The recent case of James v James and Ors [2018] EWHC 242 (Ch) raised some important issues regarding costs in contentious probate proceedings and offers to settle (Part 36 offers).

The deceased’s son brought two separate claims against his father’s estate following his death. The defendants (the deceased’s wife and daughters) defended the claim and brought a counterclaim of their own. The claimant was ultimately unsuccessful.

During the proceedings, the defendants had made an offer to settle the claims and the counterclaim under Part 36 of the Civil Procedure Rules (‘CPR’). A Part 36 offer, if drafted properly, carries costs benefits for the party making it in the event that their offer is not matched or beaten at trial.

The defendants had made a Part 36 offer which stated that the claimant was to be liable to pay the defendants’ costs of the claims and counterclaim; however, they departed from the wording of Part 36 which concerned the period in which the claimant was to be liable for the defendants’ costs.

The Court held that the offer was not a valid Part 36 offer because it was inconsistent with the wording of Part 36 and there was no evidence of any drafting error or any ambiguity to justify the Court interpreting the letter in line with the requirements of Part 36. Accordingly, whilst it was a letter to which the Court could have regard in the exercise of its discretion on costs, it was not one to which the more advantageous consequences of Part 36 applied.

This case is an important reminder that if parties want an offer to carry the full consequences of Part 36, they must ensure that they are carefully prepared in line with the wording in the CPR.

If you are concerned about the validity of a will or want to find out more please contact our solicitors in the Disputed Wills and Trusts team here.