Who has to Pay the Legal Costs?
A challenge to a will inevitably incurs various upfront and ongoing legal fees, court costs and administrative expenses. Begging the question: Who pays for the costs of contesting a will?
There is an assumption in family provision proceedings that the legal costs of the proceedings will be paid out of the deceased’s estate, irrespective of the outcome. Yet, although the estate will usually bear the defendant’s legal costs, there is no guarantee that the applicant’s costs will be treated the same. Costs orders in family provision proceedings are left to the discretion of the court and who pays the costs will depend on both the circumstances and outcome of the case.
Ordinarily, costs are said to “follow the event”, meaning the party who loses the case is responsible for paying both their own legal costs and the legal costs of the winning party. Family provision claims, however, are generally considered to be an exception to this rule. As noted in Singer v Berghouse (1993):
‘Family provision cases stand apart from cases in which costs follow the event…costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate to have his or her costs paid out of the estate’.
Nevertheless, the principle espoused in Singer v Berghouse does not mean that an unsuccessful applicant can expect their legal costs to be paid out of the estate. In some circumstances, the court may determine that the applicant is responsible for paying their own legal costs. Similarly, the court may make an order that the applicant pay both theirs and the other party’s legal costs. Alternatively, the court may cap the costs which the applicant can recover from the estate. Thus, depending on the circumstances, the applicant may be required to pay some or all of their own costs and potentially the other party’s costs.
Factors Which Impact Costs
The court will make any such cost order which it thinks fit. Here. In determining the appropriate order to make the following factors are relevant:
A successful applicant can generally expect that their costs will be paid out of the estate, whereas an unsuccessful applicant will generally be responsible for paying at least some of the costs associated with the proceedings.
The merit of the applicant’s case is relevant. For instance, a party will often be liable for costs where their claim was frivolous or vexatious.
The value of the legal costs and whether they are reasonable and proportionate in the circumstances of the case is a relevant consideration. A party who has incurred extensive and unreasonable legal cost will likely be responsible for at least part of the costs incurred.
Whether or not either party has refused a settlement offer, particularly where the offer was better than the final outcome, is relevant. Here, a party who unreasonably refuses a settlement offer or demonstrates an unwillingness to compromise may be responsible for paying the legal costs.
The value of the estate in relation to the legal expenses incurred will affect the order. Where the estate is not big enough to bear the legal costs or the beneficiaries of the estate will be deprived of their inheritance if the costs are paid out of the estate, an applicant will likely be responsible for their costs.
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DISCLAIMER: The information provided above is published for general informational purposes only and is not intended to be nor should it be relied upon as a substitute for legal or other advice.