The end is nigh

Probate claims are notoriously difficult. It is not uncommon for evidence that may severely affect the prospects of success in a case to emerge late in the day, after significant costs on all sides have been accrued. The horror then dawns that your client might be made liable for the other side's significant costs - a sobering proposition.

Probate claims are however a different species altogether from other types of court proceedings; enter CPR rule part 57.11. This rule provides that the normal step, whereby the discontinuing party can elect to discontinue by filing a 'notice of discontinuance' (which normally triggers their liability to pay the other side's costs) does not apply to probate claims. In substance either party in the situation where a probate claim is to
be discontinued must apply to the
court for an order to discontinue,
or dismiss the proceedings on terms
as to costs. The situation, then, is not
all doom and gloom.

The exception for costs in probate claims is founded on two principles. Firstly, that the court is akin to an inquiry as to how the deceased's will came into existence, and before the case is discontinued, the court will wish to satisfy itself that there is no doubt over the validity of the will. Secondly, that the normal rule in litigation of 'loser pays' is subject to two well-known exceptions that survive the CPR.

The two exceptions first stated in Spiers v English [1907] P 122 maintain:

1. That the claimant's and defendant's costs may be paid out of the estate where it was deemed reasonable to oppose the will, and run the case because the dispute had been triggered as a result of the testator's fault, or had been caused by the residuary beneficiaries' fault. The deceased's conduct must be causative of the claim - which may arise for example where the testator left their affairs in a disordered state or was incapable when the will was made.

2. That the claimants and defendants should each bear their own costs if the dispute has been triggered through no fault of the testator or those interested in the residue, and where the circumstances reasonably lead to an investigation. This may be so even if a case is discontinued after evidence establishes there is no case.

These exceptions are applied in disputed capacity and knowledge and approval claims - where the facts surrounding the execution of the will reasonably require investigation. The unsuccessful party will most likely have to bear their own costs, but not those of any other party.

Accordingly, there is an opportunity for the discontinuing party to argue that it should not be liable for the other side's costs or, indeed, that their costs be borne by the estate. Any such application to the court to apply the exceptions depend upon how the dispute was triggered, and will turn on how reasonably the parties had advanced their cases.

In Smith & Anr v Springford & Anr [2009] WTLR 705 the court noted that when probate proceedings were discontinued, the discretion to make an award of costs had to be exercised on the basis of "uncontentious fact or sound conclusions based on the available material". In this case, the claimants were required to pay the defendant's costs from the point an expert's report should have been obtained. The claimants had unreasonably resisted the joint instruction of the expert for a lengthy period of time.

Having then accepted the request, they failed to discontinue (following receipt of the opinion showing that the deceased had capacity). By the time the report was available they would have known both the issues in the action and the costs of resolving them. It is unlikely that a party acting in defiance of the evidence to pursue an unmeritorious claim, would then succeed in persuading the court to say that it should not have to bear the other parties' costs.

In Re Jean Wylde decd Wylde v Culvert (2006) LTL 21/4/2006, no order as to costs was successfully obtained because there was no evidence to show that the claimant had acted unreasonably or in bad faith in challenging the will.

Consequently the importance of running a claim on reasonably cogent evidence, and withdrawing the claim at the appropriate stage if the claim falters cannot be overstated, as it may afford your client the opportunity to avoid a significant costs liability.

Lloyd Junor is a senior associate at Thomas Eggar

He writes the regular in-practice article on wealth structuring for Private Client Adviser