What are the Costs of Avoiding Mediation?

4th November 2019 Will Disputes

The recent case of Christopher Burgess v Jennifer Penny & Anr [2019] has emphasised the importance of engaging in mediation in contentious probate matters and the serious cost consequences if mediation is not considered.

The general rule in relation to costs in litigation proceedings is that the unsuccessful party pays the costs of the successful party. However, case law has established potential costs orders that are specific to contentious probate matters. Principally that:

(1) The court may order the unsuccessful party’s costs to be paid out of the estate if the litigation has been caused by the testator; and

(2) If the circumstances reasonably lead to an investigation of the matter, the court may make no order as to costs.

However, ultimately, the court has discretion when deciding what cost order to make.

The case above involved three siblings. There were two sisters who contested the will of their late mother on the grounds that she did not knowingly approve her final will, which dictated that her assets should be split equally between the sisters and their brother. Their brother sought that the will be accepted as valid by the court. There was a previous will that left a lesser amount to the brother due to the fact that he was wealthier than his sisters and the two sisters sought that the distribution should be in accordance with that previous will, even though it had been destroyed at their mother’s direction. The Court found the final will invalid on the grounds it had not been properly executed, however, they also found that the previous will had been revoked by the mother, meaning the estate was still split equally between the siblings.

In the Judge’s decision concerning costs, she stated that the two sisters had been unreasonable in their refusal to mediate on the basis that they wanted their brother to admit to wrongdoing. She stated that the purpose of mediation was to avoid unnecessary litigation and reach a solution where both parties may have to make compromises, but ultimately the solution reached was better than continuing litigation. Whilst the Judge acknowledged that the initial enquiries into the validity of the will were reasonable, the onward conduct of the litigation and the refusal to engage in mediation was not reasonable. It was therefore ordered that the parties bear their own costs.

This case is an excellent example of how even if a party is successful in bringing a challenge to the validity of a will, that does not necessarily mean that they will be awarded their costs to be paid by the losing party if the successful party acted unreasonably in refusing to mediate.

Mediation can be a useful exercise that can assist with the resolution of a dispute, saving time and legal expense. Probate matters in particular can be influenced by emotion and grief and mediation can provide an opportunity to air any grievances and facilitate agreement between the parties. Mediation can provide an opportunity for both parties to fully understand each other’s aims and objectives, and assist with reaching a resolution that is acceptable to all the parties involved. Although it is open to the court to decide to make one of the two orders set out at the beginning of this blog, they are by no means bound to do so and parties should be wary that they run the risk of a potentially adverse costs order resulting from an unreasonable refusal to mediate.

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Alison Parry is a Partner located in Manchester in our Will and Trust Disputes department

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