It seems to be a common misconception that in contentious probate claims, all parties have their costs paid from the estate. This simply isn't correct. The matter of whose costs are paid and from where is a complex one, and will often vary case to case.

Executors

Executors should generally remain neutral in contentious probate cases. In circumstances where executors are also beneficiaries or otherwise have vested personal interests in the outcome of the claim, it is often the case that they are removed as executors by virtue of an application under section 50 of the Administration of Justice Act, and replaced in favour of independent professionals.

However as a general rule executors are entitled to a full indemnity for all their costs from the estate by virtue of section 31 of the Trustee Act 2000. The executor has a statutory right to be reimbursed for the costs incurred in carrying out the administration of the estate. However this will not apply if they have breached their duties or acted unreasonably.

Litigation is not strictly an administration expense but under Rule 46 of the Civil Procedure Rules, an executor is also entitled to be indemnified for their costs for court proceedings where they are a party to those proceedings. However this only applies if they are party in their capacity as a personal representative.  It would not entitle the executors to have their costs paid if, for example, they brought a claim themselves disputing the will.

Other parties

Generally a party to litigation is responsible for his or her own costs during the course of the litigation. At the end of the case, usually at the end of or after trial, the judge will say who should have their costs paid, and by whom. In most cases, the general rule on costs is that the successful party has their costs paid by the unsuccessful party. However this is always subject to assessment, and it is generally understood that you will never get 100% of your costs back. There are some circumstances (such as beating a good part 36 offer) where the rules on costs are amended or reversed.

In contentious probate cases, it is commonly the case that the only real pot of money is the estate itself. Costs in contentious probate claims can be high. Often the parties to litigation do not have cash available to pay the costs.  In those cases, varying the losing party’s estate entitlement to have the costs paid from their share of the estate or having costs paid out of the estate generally is a quick and convenient way of dealing with the matter.

There are also exceptions to the usual on costs. For example, in many cases where there is a claim for will validity no party is at fault per se. The costs incurred in establishing whether a will is valid can be high. For example, in the case of a dispute over whether the deceased signed the will, the deceased is not around to say whether they did or did not. There would therefore be substantial costs incurred in carrying out forensic handwriting investigations. Therefore, in probate cases there are two ways in which the judge can make exceptions to the general rule on costs. Firstly, where the claim is the fault of the deceased, for example where the deceased’s will is not clear and has caused confusion, and secondly, where there were reasonable grounds for investigation.

In those cases the judge has a very wide discretion on costs orders that can be made, and may choose to award everyone's costs (sometimes, but not often, in full) from the estate itself.

Settlement

It is also true that many cases never actually reach trial. The costs of attending trial, and the risk to the parties are sufficiently high that I would conservatively estimate that a majority of cases settle before they reach the courts. The courts also encourage parties to engage in alternative dispute resolution to avoid trial if at all possible. In those cases, the parties may agree the position in relation to costs (sometimes settlements must be approved by the court) and parties can either agree that one party will pay the costs of another, or alternatively as is often the case, that parties’ costs are to be paid from the estate.

If you have any queries regarding contentious probate claims, and litigation costs, please do not hesitate to contact Toby Walker by email or on 01494 893512 or Kezia Brown by email or on 01494 893504.