In February 2020, Lockton published a “Red Flag Checklist” for will drafting. This article follows on from that checklist, and covers the areas in which claims arise most commonly and some ways in which these can be avoided.
Who can bring a claim?
In brief, a solicitor owes a general duty to draft a will or trust with reasonable skill and care. If they fail to do so, a claim can arise, provided the claimant can prove what was intended or went wrong and point to the loss caused.
While space does not permit more detailed analysis, it is worth saying that the identity of a claimant is important (and complex) in these types of cases. Case law has identified that claims can be brought by an executor where the loss is suffered by the estate, and by a disappointed beneficiary in certain circumstances i.e. in White v Jones (1995) 2 AC 207, where the solicitor hadn’t prepared a will 59 days after instructions were given, resulting in loss to the intended beneficiaries (but not the estate). The reason for the duty to a beneficiary, per White v Jones is that, '… if such a duty is not recognised, the only persons who might have a valid claim (ie the testator and his estate) have suffered no loss, and the only person who has suffered a loss (ie the disappointed beneficiary) has no claim.' However, Matthews v Hunter & Robertson Ltd  CSOH 88 clearly indicates that a Scottish court will not entertain a claim by a disappointed beneficiary unless the negligence itself arose in relation to the making of a will. The full scope of possible "disappointed beneficiary" claims remains in a state of evolution.
There are three main stages at which claims arise relating to wills, trusts and executries:
- taking instructions from the client
- drafting the documents and having them signed
- management of the trust or executry
Different issues arise at each stage and some remain present throughout. We will address each in turn and provide some helpful examples and cases to illustrate this; which hopefully militate against them arising in the future.
1. Taking Instructions
It is a given that a solicitor must take appropriate instructions which accurately reflect the testator's wishes, but there are several other pitfalls.
File note everything
We see numerous claims where it is alleged that the testator’s instructions were not properly reflected in the final document. These are largely raised by disappointed beneficiaries who were told they would receive something but didn’t. Without proper file notes of discussions with the testator and decisions made, the solicitor is in a considerably more difficult position when arguing that the will or trust reflected the testator’s final wishes. Without proper file notes it often becomes an issue of credibility, involving a lengthier and trickier process.
File notes are not only a key part of taking instructions from the testator, but also a key piece of evidence showing what those instructions were when a claim is raised by a disappointed beneficiary or in the event of an action for rectification.
Who is the client?
It seems obvious that instructions should be taken directly from the testator, and particular care should be taken where there is any suspicion that the instructions are not the testator's. Claims arising from assertions of “undue influence” remain common, and it is important that proper instructions are taken whereby the testator knows what is being disposed of and understands the legal effect of the gifts in their will.
The “golden rule” in will drafting is for the solicitor to be sure of the testator’s mental capacity (solicitors should follow the Law Society of Scotland’s guidance on vulnerable clients). If there are uncertainties, normally the best practice could be to have a will witnessed or approved by a medical practitioner (where they are willing), who should examine the testator and record their examination and findings.
This cannot happen in every situation, though, especially where time is of the essence. Failure to follow the practice is not necessarily negligent, as the court found in <Wharton v Bancroft>  EWHC 3250 (Ch). At para 110 the judge rejected criticisms of the solicitor for failing to follow the rule, saying: “His job was to take the will of a dying man. A solicitor so placed cannot simply conjure up a medical attendant... I do not think Mr Bancroft is to be criticised for deciding to make his own assessment (accepted as correct) and to get on with the job of drawing a will in contemplation of marriage so that Mr Wharton could marry. I certainly do not think that 'the golden rule' has in the present case anything to do with the ease with which I may infer coercion. The simple fact is that Mr Wharton was a terminally ill but capable testator.”
This is obviously a fine line. However, the solicitor should not hesitate or delay in drafting a will due to possible (rather than obvious) doubt as to the testator's capacity, or to obtain medical practitioner input, particularly where time is of the essence, otherwise the solicitor may be liable to the disappointed beneficiaries of the unfinished will.
Points to clarify
It is relatively common for claims to arise where a property is left to a specified person in a will, only for there to be an undischarged survivorship destination in the title, leading to the bequest being ineffective. This can result in a large claim by a disappointed beneficiary for the value of the property. Other examples (largely at lower values) involve bequests for specific items where those have already been disponed; or specific sums of money. Good practice would be to raise the possibility of cash bequests being in the form of a percentage of the estate rather than a specific figure, in case a will is not revisited (a £150,000 bequest in 1990 is very different to the same in 2020).
2. Drafting and signing the documents
It goes without saying that the document must be competently drafted and should reflect the testator’s intentions. Below are some further points which should be considered at this stage to avoid claims.
Delaying meeting to take instructions, or drafting or finalising a will, is risky, and can result in claims from either an executor, say on the basis of increased tax payable, or a disappointed beneficiary where the delay prevents a bequest being made. A solicitor must prepare the testator's will within a reasonable timescale. If urgency is needed (and apparent), even a short delay will likely be deemed unreasonable. Whilst solicitors are generally very busy, claims under this heading are normally relatively sizeable, and they are in the most part avoidable with adequate preparation and good work practices.
Claims arising from a will or trust drafted without the proper care or expertise in relation to tax are also relatively common, resulting in large inheritance or capital gains tax bills being payable, or an available nil rate band being lost. Solicitors should take great care when providing tax advice; usually, it should only be given where such expertise exists within the firm, or has been sought externally. Many solicitors now expressly exclude tax advice in their engagement letters for standard wills, or recommend in writing that the input of an accountant/financial adviser/tax lawyer is sought, thereby spreading the risk profile.
Signing the will/trust
It seems obvious that wills and trust deeds need to be properly signed; however, there are numerous examples of this not being done. Claims have also been successfully raised where a solicitor has failed to provide the testator with full and proper instructions as to signing. To protect against claims, the will should be checked carefully once signed. Whilst that might seem unnecessarily cautious, studies suggest the majority of the population are not familiar with signing formal documents, and a quick check is considerably more efficient than discovering and dealing with errors years later, on the testator’s death. A solicitor cannot compel a testator to return the will to them for safekeeping (and checking), but they may not entirely avoid liability where they don’t ensure that the will is validly executed by asking to see it afterwards.
Issues with drafting and signing are more often caused by failings in a firm’s processes or systems than technical incompetence, and key issues can be allowed to slip under the radar. Having robust systems in place is an important failsafe to prompt good attention to detail and suitable follow-up steps.
3. Managing the trust or executry
Once the executry or trust is underway, in some cases we have seen a tendency to relax a little. Given the size of some trusts and executries, points can easily be overlooked without proper procedures in place.
Claims have arisen where the solicitor fails to arrange basic (and easily missed) points such as collection of rents, payment of utility bills, or even necessary insurances for a property. One such claim involved a fire at a property where the solicitor had not arranged buildings and contents insurance. The beneficiaries looked to the solicitor to compensate the substantial decrease in its value. Insurance had been overlooked following a change of file handlers, something a checklist or similar would likely have caught.
Claims and complaints are relatively common where beneficiaries have been overpaid, or distributions have been made on the basis of an invalid will and later require to be recovered. Making distributions without ensuring the payee's details and identity is too common, and more worrying in these days of online identity fraud. Having appropriate and robust systems for checking where funds should be paid is a vital part of the modern solicitor’s job. These claims are often large, (in the most part) indefensible , and if due to criminal intervention, the funds are often not recovered.
Claims by executors/trustees
It is clear that the executor/trustee may claim against a solicitor for losses to the estate where those losses arise post-death, during the administration and due to the solicitor’s negligence. One example is a delay in obtaining confirmation whereby income is lost. More difficult is whether the executor/trustee can recover post-death losses suffered by the estate resulting from negligent advice given to the testator during their lifetime. In <Fraser v McArthur Stewart>  CSOH 159 the court found that no liability may attach for incorrect advice even where that is relied on by the testator, as long as the will reflects their final intentions. However, in Steven v Hewats  CSOH 60 it was acknowledged that there may be a claim by residuary beneficiaries, if not by the executor, though this case considered the tax payable on an inter vivos gift. This area is largely unclear, but at least at present in the majority of cases it appears that a disappointed beneficiary cannot make any claim where the testator’s final wishes were accurately reflected in the will or trust– further reinforcing the importance of file notes and proper procedures.
Possible risks into the future
In the COVID-19 world there appears to be a greater demand for wills, coupled with new methods of execution and law firms offering online wills. These bring with them further risks and should be approached meticulously and with great care. The Law Society of Scotland released temporary guidance notes on 25 March 2020 setting out best practice in the circumstances (https://www.lawscot.org.uk/news-and-events/law-society-news/coronavirus-updates/). At the outset, firms should have in place a proper method by which to take and note full instructions whilst ensuring that the testator has proper capacity and is not being unduly influenced. When arranging for the wills to be signed and witnessed, the Society guidance should be followed.
Whilst it remains unclear how the courts will view negligence under these circumstances, all efforts should be made to minimise risk by following guidance and fully noting discussions and considerations. We would also say that any wills created, signed and witnessed with COVID-19 restrictions in place should be reconsidered as those restrictions ease. This might simply involve arranging for the will to be re-signed when (for example) a witness is available, but reconsideration will minimise the risk profile more generally.
Finally, in general we urge solicitors to find the time to stop and think about what needs to be done in each executry and trust, however routine those steps may seem. A suitable process, questionnaire or checklist (such as Lockton’s own) should be created and a system adopted which the entire business should be required to follow. Detailed file notes should be taken at all points, given that the testator’s instructions are key to the whole affair. The steps will soon become second nature and the risk of claims can only be reduced.