I have previously blogged about the decision in Marley v Rawlings - the case where a husband mistakenly signed his wife’s will and vice versa. Last week, the Supreme Court published its judgment on who should pay the costs of the case.
The value of the estate was approximately £70,000. This is almost certainly less than the costs of the legal fees for both parties, particularly as both had instructed QCs and Junior Counsel.
The usual rule in litigation is that the loser pays the winner’s costs. Mr Marley argued that the sons should pay all of his costs in addition to their own.
The sons argued that the costs should be paid by the estate, as they had taken a reasonable role in the litigation (as evidenced by the fact that they had won in the High Court and Court of Appeal). This type of order is often made where the litigation has been caused by a mistake in the execution of the will - but this would have used the whole estate which seemed unfair to Mr Marley given that he had won the case.
There was also the question of the solicitor who was responsible for organising the signatures on the wills. There would have been a professional negligence claim against the solicitor (who was insured) by Mr Marley if he had been ordered to pay costs - he had already said that he intended to bring that claim. It is possible to make an order against a third party where they have directed litigation - even if they have not specifically agreed in advance to fund that. In this case, the insurers had agreed to underwrite Mr Marley's costs in the Court of Appeal and Supreme Court, and indeed had required him to bring the proceedings to try to mitigate his loss.
The Supreme Court felt that the decision by the sons to defend the claim was not unreasonable, and so it would be very harsh on them if they had to bear substantial costs as a result. However, they did not want Mr Marley to lose all of his inheritance by ordering the estate to pay, particularly as the mistake was at least as much the fault of the solicitor as the deceased.
The Court ordered that the insurers of the solicitor should bear the costs of both sides for the High Court and Court of Appeal proceedings (they had already agreed to pay Mr Marley’s Supreme Court costs).
The Supreme Court costs for the sons were dealt with separately because the barristers were acting on 'no win no fee' agreements by that stage. These included success fees - an uplift on the basic fee which is payable if the party wins.
The insurers argued that the sons should not recover their costs for the Supreme Court hearing because they were not obliged to pay their lawyers’ costs for that hearing. However, the terms of the CFA between them and their solicitors stated that if they were to lose the case then they 'may' be required to pay disbursements including Counsels' fees. The terms of the CFA between the solicitors and Counsel contained a clause that the solicitors would be liable for Counsels' fees if the other side or estate agreed or was ordered to pay the costs. There was, therefore, a risk that the barristers for the sons would be able to seek payment of their costs from the sons.
The Court ordered that the insurers should pay the sons’ barristers’ costs for the Supreme Court hearing but without the success fee (as there had clearly been no 'success'). Both barristers agreed not to pursue the success fee, no doubt highly relieved that they were being paid anything at all!