There appears to be much hand-wringing on behalf of professional indemnity insurers following the Supreme Court’s decision on costs in Marley v Rawlings [2014] UKSC 51, in which the court ordered insurers for the solicitor who prepared the wills in question to pay the costs of both sides of the litigation. By this note, however, I argue that insurers for solicitors and other professional will writers are net winners in consequence of the Supreme Court’s decision in the substantive appeal, notwithstanding that insurers in that case were made to pay the Respondents’ costs1.

The Supreme Court’s decision on costs in Marley clearly turned on the particular circumstances of that case, which are very unlikely to recur in the future. But most importantly, it is now, as a result of the Court’s expansive ruling on probate law and procedure in Marley, unrealistic to argue (as in Marley) that insurers should pay the defendants’ costs of a claim for a will to be rectified, or construed, on the ground (accepted in Marley) that such opposition was not unreasonable as a matter of law. Further, insurers may now respond to many more claims against will preparers by insisting that claimants mitigate their alleged losses by seeking remedies based upon construction and rectification.

Before the decision of the Supreme Court in Marley v Rawlings [2014] UKSC 2 the position of insurers for solicitors (and other professionals) who prepared wills was basically as follows. In 1995 the House of Lords decided, in White v Jones [1995] 2 AC 207 that that the duty of care owed to a client by a solicitor who accepts instructions to prepare a will should extend to the intended beneficiaries under the proposed will. A beneficiary who suffers loss as a result of a breach of the solicitor's duty of care will thus have a remedy in damages against the solicitor. When a defective will causes an estate (or part of it) to pass to unintended beneficiaries, the disappointed intended beneficiaries can recover their lost benefits as damages from the will writers, whose liability is underwritten by insurers. The White v Jones principle applied to any lost benefits of any value, and huge sums could thereafter be recoverable as damages for mistakes in the preparation of wills. Indeed, it has often proved to be the case that the larger the estate, the more complicated the will-drafting exercise, with the greater attendant risk of error and exposure to liability.

The liability of will draftsmen (and their insurers) in damages for mistakes in will preparation was tempered in 1999 by the Court of Appeal decision in Walker v Geo. H. Medlicott & Son [1999] 1 WLR 727. There it was held that where an error in a will was prima facie rectifiable under section 20(1) of the Administration of Justice Act 1982, a disappointed beneficiary was under a duty to mitigate his or her loss by seeking rectification. The point was that in order to succeed on a claim against the solicitor who prepared the will, under White v Jones, it was necessary to establish a testamentary intention to benefit the claimant. If the evidence relied upon to prove that the claimant was the intended recipient of the testator’s bounty in a negligence claim would also support a claim for rectification, then there arises a duty to mitigate loss by seeking that remedy. Failure to seek to mitigate deprived the claimant in Medlicott of any remedy against the solicitor.

The result was that wills that could be rectified under the 1982 Act would be rectified, and the solicitor’s liability would be limited to the costs of the rectification proceedings. The same argument for a duty to mitigate clearly applies to an issue of the interpretation of the language of a will. Where ambiguity or dissent can be remedied by an application for the determination of the proper construction of a will, based on evidence of testamentary intention under section 21 of the 1982 Act, a claimant would be under a similar duty to mitigate alleged loss by asking the court to construe the will in his or her favour. The solicitor whose drafting of the will made it necessary to seek such clarification would be exposed to a claim for the costs of the construction claim. There is historical precedent for all parties’ costs of a construction claim to be payable from the estate, but this result is less common in the age when courts are so focussed on discouraging contentious proceedings. In any event, the costs of a construction summons or rectification claim can be further limited by insurers indemnifying the claimant in the proceedings in exchange for control over its conduct.

The tempering effect of Walker v Medlicott was, of course, limited by the constraints on the remedy of rectification under the 1982 Act recognised by the courts prior to Marley v Rawlings, in particular on the court’s narrow interpretation of the idiom ‘clerical error’ in section 20(1)(a) of the Act. It was often successfully argued by claimants in professional negligence cases against solicitors that the duty to mitigate loss by seeking rectification did not arise, as the solicitor’s error fell outside the limited scope of the statutory remedy. Further, it was said that the classic rules for the construction of wills, laid down by courts of construction over centuries, ruled out any prospect of interpreting the will in accordance with the known intentions of the testator.

These arguments have lost most of their force following the Supreme Court’s landmark decision in Marley v Rawlings.

In the substantive appeal (at [2014] UKSC 2) the Supreme Court held that the interpretation of wills should be approached in the same (liberal) way as the interpretation of commercial contracts, that no restriction in principle should be imposed on the extent to which a will can be rectified, that a will need not be formally valid before it can be rectified, and that rectification based upon a ‘clerical error’ is available to remedy any mistake in the mechanics of creating a will, other than misunderstanding testamentary intention or instructions (which is otherwise rectifiable), or making an error of law or other expertise (which remains unrectifiable). The result is that many more cases of construction and/or rectification will succeed. In the short time since Marley v Rawlings was decided we have seen this to be the case: see, for instance, Re Huntley deceased [2014] EWHC 547, Re Bernard deceased [2014] EWHC 340 and Reading v Reading [2015] EWHC 946 (on construction).

The effect of the development of the law relating to professional liability for errors in wills, from White v Jones through Walker v Geo. H Medlicott & Sons to Marley v Rawlings is that the duty to mitigate loss arising from defective will drafting by seeking to construe or rectify the will has been substantially enhanced and will now have much wider application. For this reason, when a claim for construction or rectification of a will succeeds, because the intentions of the testator are clear and the court is essentially unconstrained in its ability to remedy errors, there will no longer be merit in a defendant’s argument that its costs should be borne by the insurers because it was reasonable for the claim to be opposed. Marley v Rawlings has foreclosed most arguments that would otherwise have been available to opponents that a testator’s intended beneficiaries who are disappointed because of a defective will should be left to their claim in damages.

The Supreme Court’s decision in Marley v Rawlings is, I submit, salutary for other reasons as well. Fewer unintended beneficiaries will obtain windfall benefits whilst those intended to benefit are left to bring claims in negligence against those whose defective preparation of wills caused the estate to be misdirected. Moreover, disappointed intended beneficiaries often lose much more than money when an estate passes to those not intended to receive it. In Marley v Rawlings itself the Appellant, who shared a house with his adoptive parents and was intended to receive the whole of his adoptive father’s estate, faced the loss of an estate valued at only £70,000 but which comprised all the personal possessions shared he’d with his adoptive parents, the sentimental value of which was to him immeasurable.