When Is An Executor Personally Liable For Their Legal Costs?

The recent case of Perry v Neupert addresses the complicated issue of who pays in a contentious probate dispute.

Perry v Neupert – Case background

The Deceased was an Israeli citizen who lived in England with his wife, Perry. Neupert was a Swiss lawyer who was appointed as executor under the Deceased’s Will to deal with the English assets.

Perry was the sole beneficiary of the English estate. The Deceased’s estate was complicated and there was some disagreement between Neupert and Perry. As a result of the poor relationship between Neupert and Perry, Perry issued proceedings to appoint herself as the executor and have Neupert removed. Neupert defended the claim and filed a defence and counter claim. In addition he made an application for a summary judgment against Perry which was successful. Perry appealed this decision and the summary judgment was reversed.

Neupert argued that his costs should come out of the estate in accordance with Civil Procedure Rules (CPR) r. 46.3. Perry’s stance as the successful party was that Neupert had not remained neutral as an executor should and as such Neupert should be personally liable for his own costs together with Perry’s.

Relevant law and the outcome

CPR r. 46.3 confirms that where a person is a party to any proceedings as an executor they are entitled to have their costs paid out of the estate, provided that the costs have been properly incurred. However, in some circumstances the executor may be personally liable for their costs.

In this case, it was decided Neupert would be personally liable for his costs on the basis that he had resisted the claim made against him and the actions taken by him during the proceedings were particularly hostile.

What does this mean for executors?

The outcome in this case illustrates that as an executor you need to be careful of your actions, as if you do not remain neutral in your conduct there are likely to be consequences in terms of costs. Whether the costs are payable from the estate or by you personally as an executor will depend upon your conduct and whether you have acted reasonably.

In any case, if you are acting as an executor you should take legal advice with a view to ensuring that you are taking the correct approach.

Executor Personally Liable CostsHow Nelsons can help

Ruby Ashby is a Solicitor in our expert Inheritance Disputes team.

For advice on any queries relating to inheritance disputes, please call Ruby or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or contact us via our online form.