Refusal to Mediate and Cost Consequences in Inheritance Disputes: Lessons from Stoney-Andersen v Abbas & Ors [2023] EWHC 2964 (Ch)”
Title: “Refusal to Mediate and Cost Consequences in Inheritance Disputes: Lessons from Stoney-Andersen v Abbas & Ors [2023] EWHC 2964 (Ch)”
In the recent case of Stoney-Andersen v Abbas & Ors [2023] EWHC 2964 (Ch) on November 24, 2023, the court shed light on the repercussions of refusing mediation in inheritance disputes. This case, revolving around the estate of Vincent William Cashinella, emphasizes the court’s renewed emphasis on seeking alternative dispute resolution (ADR) in inheritance matters.
Background:
The dispute arose from a relatively modest estate, valued at £491,154, where familial disagreements over inheritance led to legal proceedings. The deceased, Vincent William Cashinella, left a will dated May 30, 1995, appointing his wife, Olwen, and the first defendant as executors. The intricacies of the case unfolded as probate was granted to the first defendant alone, leading to a contentious legal battle.
Mediation Offer and Refusal:
The claimant’s solicitors initially proposed mediation in a letter dated March 19, 2021. Despite subsequent acceptance by the first defendant, the claimant withdrew the offer in August 2021, citing clear liability. This refusal set the stage for protracted litigation.
Court’s Emphasis on ADR:
The court highlighted the importance of considering mediation and ADR in such cases, referring to the claimant’s initial willingness to engage in alternative dispute resolution. The court referenced the legal landscape, including PGF II SA v OMFS Company 1 Ltd [2014] 1 WLR 1386 and Thakkar v Patel [2017] EWCA Civ 117, stressing that silence or refusal to mediate can have cost consequences.
Costs Consideration:
The judge examined the costs issue, applying the general rule that the unsuccessful party pays the successful party’s costs. However, the court acknowledged the complexity of the case, with various factors influencing the costs order.
Special Rules for Trusts and Estates:
In addition to general cost considerations, the court explored special rules regarding trustees and personal representatives. CPR rule 46.3 and Trustee Act 2000 provisions were invoked, addressing entitlement to costs and indemnity for expenses properly incurred.
Court’s Ruling:
The court ruled in favor of the claimant as the “successful party” but recognized the nuances of the case. While awarding costs on the standard basis, the court also expressed disapproval of the claimant’s initial refusal to mediate. The first defendant, having acted unreasonably in defending certain aspects, was denied an indemnity from the estate for those costs.
The judge said that:
1 I am satisfied that the first and second defendants were right to pursue the possibility of mediation, and that the claimant was wrong, no matter how much she was being told that she would be likely to win, to ignore it. It is a commonplace that both sides are told by their lawyers that they will win. But they cannot both be right. Indeed, sometimes, both sides are wrong. The combination of litigation risk and irrecoverable costs almost always makes it worthwhile considering mediation and other ADR. On the (admittedly limited) material before me, the claimant did not give enough thought to this. In accordance with the caselaw, I consider it appropriate to mark the court’s disapproval of the claimant’s failure to take up the mediation/ADR suggestions of the first and second defendants. However, in my judgment, it would not be right to deprive the claimant of all her costs. I shall therefore award her 50% of her costs. As between the first three defendants, the second and third defendants will be liable jointly and severally for 50%. However, because the first defendant was neutral on the “probate” issue he will be jointly and severally liable for 35%.
2
3 The claimant seeks costs against the defendants on the indemnity rather than standard basis. This requires that the conduct of the unsuccessful party or parties should have been, not just unsuccessful, but “out of the norm”: Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hamer Aspden & Johnson [2002] EWCA Civ 879 (https://www.bailii.org/ew/cases/EWCA/Civ/2002/879.html), [39]. Here the claimant relies on the allegations of fraud, the “hopeless” quality of the defence, the failure to engage in settlement proposals, and the decision to give in shortly before the disposal hearing. However, on this material, and certainly without cross-examination, I am not in a position to find any fraud, and, even if the defence were “hopeless” – which I do not need to, and do not decide – it would (I regret to say) not be out of today’s norm. Nor is a decision to capitulate shortly before the hearing, annoying though that undoubtedly is. As for the failure to engage in settlement proposals, I rather think that here the boot is on the other foot, because of the failure of the claimant to take mediation or ADR seriously. So I do not consi
der that this is a case for costs on the indemnity basis.
Conclusion:
Stoney-Andersen v Abbas & Ors serves as a stark reminder of the court’s inclination towards ADR in inheritance disputes. The refusal to mediate can carry substantial cost consequences, and parties are urged to consider alternative avenues for resolution to avoid protracted and costly litigation.