The Court recently heard a case concerning the validity of a will: Jones v Tracey & Ors [2023] EWHC 2242 (Ch) (14 July 2023)
Such cases are sadly on the increase. The deceased sister was arguing that her brother’s will had been revoked in which case he would have died intestate and she would have inherited his estate. The Court decided the deceased had not revoked his will. The sister therefore lost.
The case is interesting because of a further decision on the costs of the case and it was argued that a party had ignored an invitation to mediate and therefore they should pay a costs penalty. (Jones v Tracey & Ors (Re Costs) [2023] EWHC 2256 (Ch) (12 September 2023)
The Claimant had, pre proceedings made a part 36 offer to pay the sister £5,000 in return for her removing her caveat.
The judge decided that there had not been an unreasonable refusal to mediate but that the part 36 offer was effective.
The case highlights the importance of considering offers to mediate and settlement offers before starting proceedings.
The reasons given in respect to the offer to mediate were as follows:
The sister’s solicitors had sent a letter dated 7 June 2023 which said:
We refer to your letter dated 27 April 2023 with regard to your client offering to engage with alternative dispute resolution without moving the trial date. We sent an email on 3 ;May 2023 that our client was in agreement to attending alternative dispute resolution.
We understand there are several forms resolving issues before a final hearing but would invite you clarify why your client was unwilling to attend mediation given that we agreed not to move the trial date. Further the offer was some two months before the final hearing.” [sic]
The sister’s solicitors had sent a letter dated 7 June 2023 which said:
“We refer to your letter dated 27th April 2023 with regard to your client offering to engage with alternative dispute resolution without moving the trial date. We sent an email on 3rd May 2023 that our client was in agreement to attending alternative dispute resolution.
We understand there are several forms resolving issues before a final hearing but would invite you clarify why your client was unwilling to attend mediation given that we agreed not to move the trial date. Further the offer was some two months before the final hearing.” [sic]
The claimant submits that having been wholly successful at trial an order for costs should be made in his favour. Furthermore, the claimant relies upon the Part 36 offer made well before the claim was issued and submits that the outcome of the claim is at least as advantageous to him as the proposal in the Part 36 offer. Consequently it is said that the court, if it considers it is just to do so, should award (i) costs for the period after the relevant period expired on the indemnity basis, (ii) interest on costs at a rate not exceeding 10% above base rate and (iii) an additional sum up to a maximum of £75,000 applying the prescribed percentage of 10% of the costs awarded by the court.
The third defendant relies heavily upon what is said to be a material conduct issue namely the apparent refusal by the claimant to mediate. 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.
(1) CPR 36.14(1) provides that if a Part 36 offer is accepted the claim will be stayed. It is said that prior to the issue of the claim there was no claim to stay and an essential step was an application to the Probate Registry to deal with the application for a grant.
In the period after issue of the claim the third defendant third defendant relies upon paragraph 6 of Practice Direction 57 which deals with the ways in which a probate claim may be disposed of after the parties have agreed to settle the claim. Notably neither Part 57 nor PD 57 state that the parties may not rely upon offers made under Part 36 despite explicit disapplication of other provisions of the CPR such as the provisions of Part 38 (see CPR rule 57.11).
The third defendant relies heavily on the letter dated 7 June 2023 and the previous communications about ADR. It seems to me there are a number of factors in play with regards to conduct including:
The claimant had made offers to settle well before the claim was issued to which there was no substantive response.
It was essential there was a grant in respect of the estate either under an intestacy or under the 2013 will. The claim was not entirely on all fours with a claim for a money sum or damages. The options for settlement were rather more limited than in such a case.
The third defendant’s conduct of the claim was very unsatisfactory including (1) filing her acknowledgement of service and defence and counterclaim late, (2) failed to provide a Disclosure Review Document or a certificate of compliance for disclosure, (3) failed to provide signed witness statements until the trial (4) made a very late application to adjourn the trial based upon unsatisfactory medical evidence, (5) made the application for third party disclosure very late (6) applied to serve witness summaries in a manner that was poorly framed and misguided. I have in mind however that the production of the Verisona Law file, albeit very late was of assistance to the claimant despite the application being pressed by the third defendant.
It was the claimant who raised first the question of ADR on 27 April 2023. This was followed by a further offer that would have had significant benefits to the third defendant had it been accepted. Critically the third defendant chose not to engage with the offer and was unspecific about the form of ADR she proposed. The letter of 7 June 2023 adds little because the third defendant decided to refer back to ADR on the day the offer made on 24 May 2023 expired without having responded to the offer. The claimant was entitled to know what view the third defendant took of the offer before committing himself to a form of ADR.
The merits of the claim were weighted heavily in favour of the claimant. The third defendant knew of the basis upon which the claim was made from the claimant’s letter before claim and the follow-up letter from Russell Cooke and had a clear idea of the evidence that was relied upon from the first defendant’s letter to the Probate Registry dated 30 December 2018. The third defendant had no positive evidence to rely upon of any weight or value. Instead of leaving it to the claimant to prove his claim, she actively opposed it and by doing so took her chances albeit she had no positive case.
Nevertheless, the claimant’s failure to engage more positively with ADR and in particular mediation ENE or Chancery FDR in April 2023 without providing any explanation is surprising.
“I have concluded that the claimant’s conduct was not such as to warrant a deduction from his costs. In reaching that conclusion I have in mind in particular (a) the fact that the claimant made most of the running in relation to settlement (b) the third defendant’s behaviour in her conduct of the claim and (c) the strong merits of the claim which either were known or should have been known to the third defendant and (d) the late stage at which the third defendant expressed a willingness to engage in ADR. Although the claimant did not explain his position in April and May 2023 it would not have been unreasonable to have concluded that the additional cost of mediation was not warranted. I do not consider that on the facts of this case it can be said that silence on the part of the claimant amounted to a refusal to undertake mediation (or some other form of ADR).”
Part 36
I turn to the effects of the Part 36 offer. I must first consider whether it is unjust to make the orders referred to at CPR rule 36.17(4) by considering all the circumstances of the case including the factors mentioned in CPR rule 36.17(5). The burden is on the third defendant to show that it is unjust
Taking the factors in turn:
The terms of the Part 36 offer were realistic and accorded with the merits of the claim. The claim was strong. The third defendant would have been better off had she accepted the offer.
The offer was made well before the claim was issued. As I have pointed out the third defendant had various options open to her. She chose to actively oppose the claim and counterclaim for a grant based upon an intestacy.
The third defendant had sufficient information when the offer was made to decide what course of action to adopt. The third defendant had seen the letter from the first defendant (who did not benefit under thew will_ to the Probate Registry and was aware of the case he made and the claimant’s case. Interestingly the third defendant was slow to follow up enquiries and made her application for a third party disclosure order very late on. The Verisona Law file when it was produced strongly supported the claimant’s case.
The claimant provided a response to EA Neary’s reply to the offer. There is no sense in which the claimant withheld information. He was not an executor under the will and in no better position than the claimant to obtain documents.
The offer was a genuine attempt to settle the claim without proceedings being issued.
I do not consider it is unjust to apply the effects of CPR rule 36.17.I accept the claimant’s submissions that the appropriate order is that the third defendant should pay: the claimant’s costs of and incidental to the claim on the standard basis until the expiry of the Relevant Period and on the indemnity basis to the date of the court’s order consequent upon this judgment;
interest on those costs at 4% above base rate from the date they were incurred to the date of payment;
Am additional sum of 10% of the assessed costs.
The sister who was the third defendant ended up paying indemnity costs following the Part 36 offer, interest and 10% extra on top. For Claimants the case highlights the benefits of making part 36 offers before starting proceedIngs as the Claimant in this case will have recovered a large proportion of his costs of the litigation.
In relation to the offer to mediate the Court felt it was too late in the day and the cost would not have been warranted. This highlights the importance of offering to mediate early on in proceedings and reiterates the Halsey case as regards to whether a refusal to mediate is reasonable. The judge felt that the merits of the Claimant’s case were strong and so the Claimant was justified in refusing to mediate. Until the Halsey case is revisited it is reasonable for a party to refuse to mediate when they have a strong case.
As costs in wills and probate cases can be high, we do recommend mediating at an early stage. To instruct a mediator please get in touch.
Costs
The judge said that:
The third defendant relies heavily upon what is said to be a material conduct issue namely the apparent refusal by the claimant to mediate. 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.
(1) CPR 36.14(1) provides that if a Part 36 offer is accepted the claim will be stayed. It is said that prior to the issue of the claim there was no claim to stay and an essential step was an application to the Probate Registry to deal with the application for a grant.
(2) In the period after issue of the claim the third defendant third defendant relies upon paragraph 6 of Practice Direction 57 which deals with the ways in which a probate claim may be disposed of after the parties have agreed to settle the claim. Notably neither Part 57 nor PD 57 state that the parties may not rely upon offers made under Part 36 despite explicit disapplication of other provisions of the CPR such as the provisions of Part 38 (see CPR rule 57.11).
(1) The claimant had made offers to settle well before the claim was issued to which there was no substantive response.
(2) It was essential there was a grant in respect of the estate either under an intestacy or under the 2013 will. The claim was not entirely on all fours with a claim for a money sum or damages. The options for settlement were rather more limited than in such a case.
(3) The third defendant’s conduct of the claim was very unsatisfactory including (1) filing her acknowledgement of service and defence and counterclaim late, (2) failed to provide a Disclosure Review Document or a certificate of compliance for disclosure, (3) failed to provide signed witness statements until the trial (4) made a very late application to adjourn the trial based upon unsatisfactory medical evidence, (5) made the application for third party disclosure very late (6) applied to serve witness summaries in a manner that was poorly framed and misguided. I have in mind however that the production of the Verisona Law file, albeit very late was of assistance to the claimant despite the application being pressed by the third defendant.
(4) It was the claimant who raised first the question of ADR on 27 April 2023. This was followed by a further offer that would have had significant benefits to the third defendant had it been accepted. Critically the third defendant chose not to engage with the offer and was unspecific about the form of ADR she proposed. The letter of 7 June 2023 adds little because the third defendant decided to refer back to ADR on the day the offer made on 24 May 2023 expired without having responded to the offer. The claimant was entitled to know what view the third defendant took of the offer before committing himself to a form of ADR.
(5) The merits of the claim were weighted heavily in favour of the claimant. The third defendant knew of the basis upon which the claim was made from the claimant’s letter before claim and the follow-up letter from Russell Cooke and had a clear idea of the evidence that was relied upon from the first defendant’s letter to the Probate Registry dated 30 December 2018. The third defendant had no positive evidence to rely upon of any weight or value. Instead of leaving it to the claimant to prove his claim, she actively opposed it and by doing so took her chances albeit she had no positive case.
Nevertheless, the claimant’s failure to engage more positively with ADR and in particular mediation ENE or Chancery FDR in April 2023 without providing any explanation is surprising.
“I have concluded that the claimant’s conduct was not such as to warrant a deduction from his costs. In reaching that conclusion I have in mind in particular (a) the fact that the claimant made most of the running in relation to settlement (b) the third defendant’s behaviour in her conduct of the claim and (c) the strong merits of the claim which either were known or should have been known to the third defendant and (d) the late stage at which the third defendant expressed a willingness to engage in ADR. Although the claimant did not explain his position in April and May 2023 it would not have been unreasonable to have concluded that the additional cost of mediation was not warranted. I do not consider that on the facts of this case it can be said that silence on the part of the claimant amounted to a refusal to undertake mediation (or some other form of ADR).”
Part 36
(1) The terms of the Part 36 offer were realistic and accorded with the merits of the claim. The claim was strong. The third defendant would have been better off had she accepted the offer.
(2) The offer was made well before the claim was issued. As I have pointed out the third defendant had various options open to her. She chose to actively oppose the claim and counterclaim for a grant based upon an intestacy.
(3) The third defendant had sufficient information when the offer was made to decide what course of action to adopt. The third defendant had seen the letter from the first defendant (who did not benefit under thew will_ to the Probate Registry and was aware of the case he made and the claimant’s case. Interestingly the third defendant was slow to follow up enquiries and made her application for a third party disclosure order very late on. The Verisona Law file when it was produced strongly supported the claimant’s case.
(4) The claimant provided a response to EA Neary’s reply to the offer. There is no sense in which the claimant withheld information. He was not an executor under the will and in no better position than the claimant to obtain documents.
(5) The offer was a genuine attempt to settle the claim without proceedings being issued.
I do not consider it is unjust to apply the effects of CPR rule 36.17.
(1) the claimant’s costs of and incidental to the claim on the standard basis until the expiry of the Relevant Period and on the indemnity basis to the date of the court’s order consequent upon this judgment;
(2) interest on those costs at 4% above base rate from the date they were incurred to the date of payment;
(3) an additional sum of 10% of the assessed costs.
The sister who was the third defendant ended up paying indemnity costs following the Part 36 offer, interest and 10% extra on top. For Claimants the case highlights the benefits of making part 36 offers before starting proceedIngs as the Claimant in this case will have recovered a large proportion of his costs of the litigation.
In relation to the offer to mediate the Court felt it was too late in the day and the cost would not have been warranted. This highlights the importance of offering to mediate early on in proceedings and reiterates the Halsey case as regards to whether a refusal to mediate is reasonable. The judge felt that the merits of the Claimant’s case were strong and so the Claimant was justified in refusing to mediate. Until the Halsey case is revisited it is reasonable for a party to refuse to mediate when they have a strong case.
As costs in wills and probate cases can be high, we do recommend mediating at an early stage. To instruct a mediator please get in touch.
