Costs Of Contesting A Will (ACT)
Contesting a will in the ACT can be time-consuming and expensive. The Supreme Court has authority under the Court Procedure Rules 2006 to award costs to or against either party in a civil litigation proceeding. In such cases, costs are typically awarded to the successful party, but contested estate cases are treated differently. This article outlines how legal costs are paid in a contested will case in the ACT.
Contesting a Will In The ACT
When an eligible person is dissatisfied with the provisions of a will, they can file a Family Provision Claim with the Supreme Court. A claim will be assessed according to statutory and common-law principles and, if successful, the court will redistribute the estate to provide an appropriate share to the claimant.
What Are Costs of contesting a will?
Costs are the fees and charges that are incurred in the defence or pursuit of civil litigation. Costs are calculated as either a percentage of the total expenditure on legal and court fees, or in a fixed amount that the court determines according to a published scale.
The amount of costs incurred in a legal case differs according to the type of claim, whether there are complications, and whether the parties are willing to compromise. Typically, costs “follow the event” so a successful claimant is awarded costs to cover the fees and expenses of making a claim. In the ACT, the Supreme Court treats costs somewhat differently in the case of Family Provision Claims because decisions are based on what is a “just” outcome. The court will consider the effect of awarding costs and whether either party was responsible for needlessly drawing out the litigation. It will be particularly relevant if the litigation was only necessary because of the unreasonable behaviour of either the testator (in not making provision) or the executor (in not settling a valid claim).
Responsibility for Costs of contesting a will
The estate’s executor or administrator represents the estate in court against challenge or contest, but they are not personally responsible for the legal costs of defending a claim. Instead, the deceased estate is responsible for the upfront legal expenses and the claimant may be ordered to reimburse these costs. While the personal representative is not financially responsible for the legal costs of the estate, they do have a duty to accept valid claims and not unnecessarily engage in court action. An executor or administrator needs to act prudently because otherwise, the beneficiaries of the will may be able to hold them personally responsible for loss that results from their negligence or breach of duty of care.
A claimant, on the other hand, is always responsible for his or her own costs unless the court orders a reimbursement. A claimant must be aware that whether or not they are successful, they may not recoup their entire costs. Indeed, if the court finds a claim to be frivolous, they may make an adverse costs order against the claimant so they are forced to also refund the estate for the legal costs incurred in defending the claim.
Costs of Pre Trial Mediation
Contested estate cases typically must go through mediation before proceeding to trial. The estate usually bears most of the costs of mediation, including the mediator’s fees. Claimants are responsible for the cost of their own legal representation at mediation, and these costs are typically not recouped from the estate if a settlement is reached during mediation.
The costs of contesting a will may be minimal if a settlement can be reached prior to a court hearing. A claimant can negotiate an agreement with the executor of the estate through private negotiation or at a mediation conference. A pragmatic executor will settle a valid claim at this stage rather than waiting for a court hearing that could significantly decrease the estate’s value through legal fees.
Standard And Indemnity Costs
Costs in contested will cases are described as either standard or indemnity costs. The court sometimes orders standard costs when the submitted costs are disproportionate or the party has not cooperated fully with the court’s instructions. Alternatively, the court may order that a party receive indemnity costs because they acted more reasonably during the course of the dispute. Indemnity costs typically cover most legal expenses, in line with a cost agreement, scale of fees or standard legal charges.
In the 2020 case of Talent v Talent (No 2), the testator had two children and appointed her daughter as executor and beneficiary but left no provision for her son. Her son successfully contested the will. The claimant argued that the court should follow the general practice in civil litigation and order costs to follow the event. The executor asked that the claimant bear his own costs and that the estate repay the executor’s costs on an indemnity basis.
The court reiterated that the purpose of a costs order in such cases is to have a fair and just outcome. The court confirmed that it would refuse costs to a successful claimant only where there was delinquency on the claimant’s part, such as rejection of a reasonable pretrial settlement offer. The executor demonstrated that she had made three settlement offers to the plaintiff, including an offer of at least half of the estate. The claimant made no submission on whether he acted reasonably in rejecting the pretrial offers.
The court found that it was “abundantly clear” that the executor made repeated and sensible offers to the claimant in the hope of avoiding the cost of litigation. The executor also kept the claimant apprised of the diminishing value of the estate each time an offer was made. The court found it “staggering” that the claimant did not accept the offer and found the claimant’s conduct unreasonable. Therefore, the court ordered that the claimant bear his own costs. The executor was found to have acted properly in all respects and the court order that the estate reimburse her costs on an indemnity basis.
Armstrong Legal will help you minimise the costs associated with making a claim, including offering a “no win, no fee” cost arrangement. Engaging our solicitors will not only give you the best chance of success, but we will work to give you the best chance of being afforded costs. Please call our contested wills team on 1300 038 223 to talk over the costs of contesting a will in the ACT, or make an appointment without delay to chat with one of our team.