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. This begs the question: Who pays for the costs of contesting a will?
Pursuant to section 99 of the Succession Act the Court has discretion to order that the costs of the proceedings be paid out of the estate and there, is an assumption that the Court will order costs be paid out of the 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. However, this rule has been doubted in the case of family provision claims. 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, despite the principle espoused in Singer v Berghouse the default rule, contained in rule 42.1 of the Uniform Civil Procedure Rules, that costs "follow the event" is still applicable to family provision proceedings. Yet, as noted in Haertsch v Whiteway, the application of that rule is subject to the Court exercising greater than usual liberality and discrimination in deciding whether to depart from it.
Factors Which Impact Costs
The Court will make any such cost order which it thinks fit. 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 costs 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.