When advising on disputed probate claims, our Inheritance Disputes team have frequently heard people talking about costs coming “from the estate” at the end of the case. The reality is markedly different and it is important for anybody intending to go to Court over a Will dispute to be aware that they may be personally committing a significant amount of money to bring their claim. That said, there can be situations which lead to a costs order against an estate, and the recent decision in the case of James v James & Others  EWHC 242 is an example of this.
James v James & Others  EWHC 242
In this case, the testator had Alzheimer’s disease and her capacity was questionable at the time that she made her Will. Crucially, the solicitors dealing with her instructions did not follow “the golden rule”, as it is known in probate circles. The golden rule essentially means that if a client wanting to make a Will is aged or in poor health, the solicitor dealing with the Will should first instruct a doctor to complete a mental capacity report. This report can be done by a GP but ideally it should be completed by a specialist psychiatrist.
In James v James, no report was completed and consequently, the validity of the Will was open to challenge. Court proceedings were issued mainly to find out whether the testator had capacity and two very respected experts in old age psychiatry – Professor Robert Howard and Professor Robyn Jacoby – completed formal reports after closely examining the testator’s medical records. In the end, the Will was found to be valid, although both experts agreed that capacity was “very close to the line”.
The Judge accepted that in this case the parties needed to start proceedings to find out whether the Will was valid, and ordered that both parties’ legal costs would be paid from the estate. Interestingly, the Judge also ordered the solicitors, who prepared the Will, to explain why they should not be ordered to meet these costs. This is a warning to all Will writers – failure to follow the golden rule and a failure to keep detailed records can land you and/or your firm in hot water.
What we can learn from this case is that costs can be paid from an estate, when:
- The litigation has been caused by the actions of the Testator or the estate’s Beneficiaries; and/or
- It is reasonable in the circumstances for the Court to decide whether the Will is valid.
However, the usual rule in litigation is that the loser pays the winner’s costs. If, therefore, you are looking to bring a claim as a disappointed Beneficiary, you certainly have it all to gain if you succeed in your claim and will often recover costs from your opponent. But you need to remember that you also have “something to lose” – if your Will challenge fails, you could end up on the sharp end of an order to pay the costs incurred by the Executor and other Beneficiaries, as well as your own.
You also need to take into account whether it is cost effective for you to pursue a claim. Whilst understandably disappointed Beneficiaries feel strongly about their case, if the estate is not worth very much then going to Court is uneconomical. This is not always necessary though. The pre-action process (steps taken before Court claims start) can make early settlement possible. Mediation or round table settlement discussions could also be the right path for you if you are disputing a modest or small estate.