Will Writers beware – Court Orders Firm To Pay 60% Of Legal Costs in Rectification & Construction Claim
In a recent decision of the High Court, a firm of solicitors was ordered to pay 60% of the parties’ legal costs in relation to a claim for rectification and the construction of a will, due to their acts and omissions in relation to the preparation of the will.
James McKay died leaving a will dated 3 August 2016 (“the Will”). The Will was prepared by BBMW Limited, which later merged with GWCA Solicitors, which was its successor practice.
The Will provided for numerous monetary gifts to various family members and charities in differing amounts. The Will provided for 50% of Mr McKay’s property to pass to the Claimant and his brother (who were Mr McKay’s stepsons) and the remaining 50% to be added to the residuary estate.
The clause at the centre of the dispute was clause 11, relating to the distribution of the residuary estate, which stated: “Subject as above my Trustees shall hold my Residuary Estate upon trust for such of the beneficiaries named in Clauses 4.1 to 4.8 inclusive absolutely as shall survive me and in accordance with the provisions relating to each gift.” Clauses 4.1 to 4.8 included the family members and the charities.
The Claimant issued a claim in the High Court for the rectification of the above clause to provide for the residuary estate to pass to the family members only, not the charities, arguing that this was Mr McKay’s intention. The Claimant also sought directions for the construction (i.e. interpretation) of the clause in relation to who the residuary estate should be divided between and what was meant by the words: “in accordance with the provisions relating to each gift” in terms of whether this meant to be divided pro rata between the beneficiaries as per their pecuniary gifts or equally.
The charities argued that the residuary estate was to be divided equally between the family members and charities and sought to rely on the Will writer’s manuscript annotations to a draft of the Will which said: “÷ between all those mentioned in Clauses 4.1-4.8” and her typed attendance note which said: “The Residue is to be divided between those people mention [sic] in clauses 4.1 to 4.8 in equal shares.” However, the Claimant also relied on the typed attendance note as he claimed that the reference to “people” was clearly meant to include the family members, not the charities.
As set out in the main judgment, there were numerous shortcomings in the Will writer’s actions in taking Mr McKay’s instructions, drafting an ambiguous clause and failing to clarify Mr McKay’s intentions in respect of the residuary estate.
The Claimant’s primary claim for rectification of the clause was unsuccessful, with the judge stating that on the balance of probabilities, and in light of the evidence and all of the circumstances, he was not satisfied that Mr McKay intended that his residuary estate be divided only between the family members.
In relation to the construction of the clause, the judge held that he was satisfied that Mr McKay did not intend all of the family members and charities to benefit from the residuary estate in equal shares, but instead, the residue should be divided between each beneficiary pro rata according to the proportion of the gift that they receive under the Will.
The court then had to decide on the costs of the claim and which party should bear the costs of the proceedings, with the usual rule being that the unsuccessful party pays the successful party’s legal costs (although the court has wide discretion when it comes to cost orders). However, in this case, the Claimant was unsuccessful in his rectification claim, but the charities’ lost on their argument relating to construction (i.e. that the residuary estate should be divided equally between all of the beneficiaries). Despite GWCA not being a party to the main claim, the Claimant applied for a non-party cost order against them, which the court has the power to order. GWCA were therefore added to the cost proceedings for this purpose.
Prior to the costs hearing, the parties had agreed between themselves that the charities’ costs in relation to the construction of the clause would be paid by GWCA’s insurers, the charities’ costs in relation to the rectification claim would be paid either by GWCA’s insurers or by the Claimant and his family, and the charities’ share of the estate would be ringfenced so that they would not bear any part of the other parties’ costs.
In relation to the rectification claim, the family members agreed that if the Claimant’s costs were not recovered in whole or in part from GWCA and/or its insurers, the costs would be borne by their combined shares of the estate.
GWCA accepted that it should bear all parties’ costs in relation to the construction claim as they accepted they were responsible for the ambiguous drafting of the clause.
The dispute in respect of costs arose in respect of whether GWCA should bear the Claimant’s costs (either in whole or part) for the unsuccessful rectification claim. GWCA argued that, unlike the construction claim, the rectification claim did not need to be brought in the interests of the estate, but rather the Claimant brought this claim to benefit himself and his family members. GWCA argued that the Claimant should bear his own costs of the rectification claim that he lost (to be shared by the family members if they agreed with that). On the other hand, the Claimant argued that GWCA should pay for all of the costs as the claim was as a result of the Will writer’s poor drafting.
The judge found that the acts and omissions of the Will writer significantly contributed to the circumstances giving rise to the rectification claim. The judge therefore held that whilst the Claimant’s rectification claim failed, the claim was a “reasonable one to bring” and to pursue to trial.
However, the judge did not consider it to be just to order GWCA to pay all of the Claimant’s costs; he did not consider it fair to state that the Will writer was solely responsible for the whole problem, but that they lost the opportunity to confirm and clarify Mr McKay’s instructions in relation to the distribution of his residuary estate. Despite the ambiguous drafting and missed opportunities to clarify Mr McKay’s intentions, the judge held that the Claimant must be taken to have assumed the risk that if the claim failed, then his costs would be payable from his own share of the estate (and his family member’s shares with their agreement).
Taking into account all of the circumstances, the judge ordered GWCA to pay 60% of all parties’ costs for all of the claims. The judge set out a summary of his reasonings at paragraph 39 of the judgment, and in particular, noted that there were “serious shortcomings in the way that the deceased’s instructions were taken and recorded and confirmed by BBMW which may fairly be said to have given rise to the claims.”
This case highlights the importance of correct and precise will drafting, avoiding the use of ambiguous statements and ensuring accuracy and understanding when recording the testator’s instructions and intentions. It also highlights that it is critical for will writers to ensure that the testator understands the effect and meaning of their will and to clarify with them any clauses and intentions which may not be entirely clear.
As this case demonstrates, there can be serious cost consequences for will writing firms which, due to their acts and/or omissions, can leave the parties with no choice but to pursue matters through the court.
The judgment for the underlying claim can be found here: Pead v Prostate Cancer UK & Ors [2023] EWHC 642 (Ch) (22 March 2023) (bailii.org).
The costs judgment can be found here: Pead v Prostate Cancer UK & Ors [2023] EWHC 3224 (Ch) (15 December 2023) (bailii.org).
