Who pays the legal costs when a will is challenged in the UK?
The cost of any legal action is always an important consideration and it is thought that many people are put off seeking justice through fear of incurring substantial legal costs. These considerations are particularly important when it comes to the legal costs of challenging a will.
It is sometimes assumed that if court proceedings are required in an inheritance dispute then whatever the outcome of the case the legal fees will be paid by the estate, but this is incorrect.
So, who does pay the legal costs of challenging a will?
A case that recently came before the court (involving an inheritance dispute between three children – two daughters and a son) concerning the will of their late mother gives us some helpful guidelines.
In that case the daughters alleged that a will which left their mother’s estate equally between the three children was invalid. The legal basis of their challenge was that their mother did not have ‘knowledge or approval’ of the contents of the will.
The court dismissed their challenge and declared that the will was valid. The judge then had to decide who should pay the legal costs.
The court’s starting point was that it has full discretion on cost under Part 44.2 of the Civil Procedure Rules.
The judge then considered some specific principles dealing with costs in contentious probate cases:
- the court may order the unsuccessful party’s costs to be paid out of the estate if the litigation is considered to have been caused by the testator; and
- if the circumstances of the case lead reasonably to an investigation of the matter, then the court may make ‘no order as to costs’.
Additional principles, or factors to be considered include:
- Do the facts warrant an order different from the general rule in Part 44.2(2)?
- Does the losing party deserve leniency because they did nothing more than fail in a suit which was justified by good and sufficient grounds for doubt?
- Were one or more of the parties led reasonably to the genuine belief that there were good grounds for impeaching the will? and
- Would departing from the general rule encourage fruitless litigation spurred on by a belief that all of the costs will come out of the estate?
The courts are increasingly alert to the risks of encouraging litigation and discouraging settlement of doubtful claims if costs are allowed out of the estate to the unsuccessful party.
In this particular case, while there was clearly uncertainty as to whether the will had been “done properly”, in circumstances where the daughters openly accepted that they were content with an equal division of the estate, was it reasonable for them to initiate court proceedings?
The judge also criticised the daughters’ complete and unreasonable refusal to mediate. They refused mediation on the basis that they wanted an admission from their brother that what he had done was wrong and did not consider that this would be obtained at a mediation. But the court said:
“Mediation is not just about one side getting what they want. That is a misconception of the purpose of mediation. Mediation should be about attempting to reach a solution which both parties can live with as better alternative to litigation.”
After considering all these factors, the judge concluded that while the initial enquiries into the circumstances surrounding the making of the will were reasonable, the onward pursuit of the litigation and the refusal to mediate was not. Accordingly, the order made was that the parties should pay their own legal costs.
The case is a helpful reminder that parties should not assume that the estate will always pay the legal costs. It also underlines the court’s encouragement of parties engaging in Alternative Dispute Resolution, especially mediation, at an early stage, to try and avoid unnecessary litigation.