Legal costs are an essential tactical consideration for any case that goes to court. The general rule in civil litigation in the High Court or County Court is that the losing party is ordered to pay the winner’s costs. The outcome in probate disputes, which is to say court cases about the will of a person who has died, usually follows the ‘loser pays’ principle.
There are however some important exceptions. Two recent High Court cases showcase how these exceptions can be used. In this blog post we will look at them both from a contentious probate and a costs law perspective.
The exception for justifiable investigations
The Facts
The first exception is where the circumstances justify an investigation. This is illustrated in the February 2023 decision of Boult v Rees [2023] EWHC 972 (Ch).
The Boult case was a dispute over the Will of Tilly Clarke, who died in 2019. Tilly’s niece claimed that Tilly’s Will was invalid because she lacked testamentary capacity when she made it. The widow of Tilly’s nephew argued the Will was valid. The burden of proof was on the niece to prove a real doubt as to Tilly’s capacity. The case involved the medical evidence, including evidence from a doctor appointed as the ‘single joint expert’.
The court found that the Will was valid. Normally, this would mean that the losing party (i.e. the niece) would have to pay the costs of the winning party (i.e. the nephew’s widow). The niece tried to get out of paying by arguing it was reasonable for her to investigate Tilly’s capacity.
The Law
The court summarised the first exception as follows:
… the exception can apply where there are circumstances that justify an investigation into the capacity of the testator. In such circumstances the rule is not that the costs are payable out of the estate but that the unsuccessful party will not be “condemned in costs”, ie will not be liable to pay. An example of that exception being applied in modern times, is Perrins v Holland [2009] EWHC 1945 (Ch). […] Even where it applies, the exception is not an all-or-nothing principle. It may be that an investigation was justified at the outset but that as the case progressed the issues became clearer and, from some point later on, the normal rule that costs follow the event should apply.
In addition, the niece argued she shouldn’t have to pay costs because she made many offers of mediation which were rejected. This argument is explored in more detail in the second case discussed in this blog post, below.
Decision
The court found that it was justified to investigate Tilly’s capacity to make a Will given it was clear that she had lost capacity at some point in time, and that she was placed in a care home only a few months after making her Will. There was a lack of medical records, and the solicitor who made the Will did not do a good job of it.
However, the court also felt that investigations were no longer required from the time the single joint expert prepared a report downplaying the significance of a finding of ‘mild cognitive impairment’.
Regarding the argument about mediation, the court felt that on the facts it was reasonable for the nephew’s widow to refuse mediation. She had engaged in alternative dispute resolution (also called “ADR”) by making reasonable settlement offers.
On the grounds of the ‘reasonable investigations’ exception, the court made no order as to costs for the first part of the case. However, the usual ‘loser pays’ costs applied from the date the single joint expert produced their report.
The exception for failing to engage in mediation
The Facts
Another argument that can be used to vary the ‘loser pays’ principle is when the winning party unreasonably refuses to engage in mediation. This was argued in the recent case of Jones v Tracey [2023] EWHC 2256 (Ch).
The Jones case was a claim to have the last Will of David Charles Turner approved by the court, known as an application for a grant in solemn form. The deceased’s sister opposed the application, arguing that because the original will could not be found it should be presumed the deceased had intended to destroy it. The court considered witness evidence about the making of the will and the deceased’s relationship with his friends and sister. It concluded that the deceased had not intended to destroy his Will, and that a copy of the lost Will could be admitted for probate.
The defendant sister tried to get out of paying costs by arguing that the claimant had unreasonably refused mediation.
The Law
The court summarised the defendant sister’s costs argument as follows:
… It is said a failure to respond to an offer to mediate should be treated as a refusal to mediate. The third defendant cites a number of well-known authorities, including Halsey v Milton Keynes NHS Trust [2004] EWCA Civ 576 Dyson LJ at [16] and PGF II SA v OMFS Co 1 Limited [2013] EWCA Civ 1288 Briggs LJ at [30], [42] and [51]. As a consequence, it is said the claimant should be deprived of a proportion of his costs.
Decision
The court found it surprising that the claimant refused ADR without any explanation. However, this conduct was not so serious as to warrant changing the ‘loser pays’ rule. In reaching this conclusion, the court took into account the fact the claimant had a very strong case, the fact ADR had not been proposed until a very late stage, as well as the third defendant’s own poor behaviour throughout the case including filing papers late and failing to comply with proper procedure.
Commentary and analysis
CPR 44.2 (1) explains how the court has discretion to determine whether costs are payable by one party to another, the amount of those costs and when they are to be paid. That is the starting point.
Once the court proceeds to make an order about costs, CPR 44.2 (2) sets out the ‘loser pays’ general rule, but it is acknowledged that the court may make a different rule, as sought by the parties in the above two cases.
It is important to remember that the general rule does not apply for probate matters in the Court of Appeal in accordance with CPR 44.2(3).
Litigation is often heavily contested and the court, when making an order in respect of costs, will have regard to all the circumstances, including the conduct of all the parties, whether a party has succeeded on part of its case (but not necessarily all of its case), and any admissible non-Part 36 offer (CPR 44.2 (4)).
The refusal to engage in mediation is a point of conduct of the parties. The niece in the case of Boult argued that she had made many offers to mediate; however, the fact that the nephew’s widow had engaged in ADR through settlement offers was enough to satisfy the court that the lack of engagement with an offer to mediate did not warrant a costs sanction.
Further, in the case of Jones, whilst the court expressed its surprise at the Claimant’s refusal to mediate, it considered all of the circumstances and found that it was not serious enough to overturn the general rule of costs.
Therefore, a running theme through the two cases is that the court will consider all of the facts of a specific case when deciding what order to make about costs. Whilst case law can be persuasive, each case is different. As practitioners, it is therefore important to monitor what occurs in your cases, however minor at the time, so that you have a complete picture when the issue of costs is being considered. If there is to be an “exception” to the rule, then the arguments put forward will be considered in the context of the case as a whole.
Once the court has determined that a costs order is appropriate, the court has a wide range of discretion in ordering exactly how those costs are to be paid; they can be ordered on a percentage basis, relate to specific steps only, or from a certain date only (as in the case of Boult).
Therefore, it is important to remember when seeking a costs order in your client(s)’ favour that the court has discretion to make a wide range of orders. Advocates must be briefed fully with the facts of the case so as to provide the court with all of the circumstances of the case to enable such discretion to be exercised.
For more information about probate litigation contact our Contentious Private Client team here. For more information about costs, contact our Costs team here.
Nicholas Choiniere is a Senior Associate Solicitor in Clarion’s Contentious Private Client Team and can be contacted on 07388 227 952 or at nicholas.choiniere@clarionsolicitors.com.
Joanne Chase is a Legal Director and Costs Lawyer in Clarion’s Costs and Litigation Team and can be contacted on 07826 166 300 or at joanne.chase@clarionsolicitors.com.