The Personal Representative in Probate Claims

 In Probate

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probate representative

The position of the personal representative is a difficult and dangerous one – dangerous in that getting it wrong involves an adverse costs order, sometimes personally against the PR (see Shovelar v Lane [2011] 4 All ER 669).

This article briefly identifies the kinds of claims and the position the PR should take. If there is only one Golden Rule in this area it is “stay neutral”. Wherever, the PR has no personal stake in the litigation the only correct answer can be to leave the protagonists to sort it out or else to ask the Court to take a view. To do anything else is to risk an adverse order.

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The Types of Claims

There are broadly three kinds of claims that can be described broadly as a probate claim. These are (note Alsop Wilkinson (a Firm) v Neary [1996] 1 WLR 1220):

  1. A dispute regarding the terms on which the estate is held.
  1. A claim by or against the estate.
  1. A claim against the personal representatives themselves. This includes claims for an account, to substitute the PRs, or for damages for wrongful administration.

1.  Claims regarding beneficial interests

The most frequently encountered claims are:

  • Those regarding the validity of Wills. These may involve allegations regarding the formalities of the execution of the Will, the capacity of the testator to make a Will, his knowledge and approval of it or (occasionally) of undue influence.
  • A claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975.
  • A claim for rectification of the Will under section 20 of the Administration of Estates Act 1982.
  • A dispute regarding the meaning or interpretation of the Will.

All these claims are essentially claims as to how the estate should be distributed once it has been administered. The PRs have no stake in the outcome of this dispute. Therefore, aside from the burdens imposed by the Civil Procedure Rules (e.g. CPR 57.16), the only correct role for them to take is a neutral one.

2.  Claims by or against the Estate

A claim by an estate can include just about any claim that an individual might make. Thus, they can include claims to recover debts owed to the deceased, damages for personal injury (perhaps arising out of the death) and so on.

As these are adverse to the estate the role of the PR is to defend or compromise them. Normally there is no scope for neutrality.

However, a PR (or a trustee) will frequently experience a claim that all the estate, or the whole of some property in the name of the estate, is held by the estate on constructive trust, or subject to a proprietary estoppel, in favour of that person.

 

Claims of this kind are made by or against the PR because they are against assets held by them as such. Strictly analysed they are claims that are adverse to the estate. However, the reality of them is that they are disputes as to how the beneficial interest in the estate is held. Moreover, if the claim succeeds there will be no fund to pay the PR’s costs of their defence (or any adverse costs orders).

In almost all circumstances, these are claims where the PR should remain neutral or, if not, to obtain the direction of the court to do otherwise (see Lewin at para 21-111). That this is the case is often not appreciated, occasionally to disastrous effect (see Shovelar v Lane [2011] EWCA 802).

The problems created by such cases can in some circumstances be avoided by obtaining indemnities (not just consent) from beneficiaries or from the court. However, if the dispute is truly as to beneficial ownership and if there are beneficiaries ready and able to participate in that dispute then the court may well not indemnify a PR for taking a positive stance (see Alsop Wilkinson v Neary).

3.  Claims adverse to the Personal Representative

Claims against PR’s themselves include claims for an account, claims criticising their fees and claims seeking to remove them as PR.

Claims of this kind are adverse to the PR personally. The PR has no choice but to defend (or compromise) and should they lose they will risk an order for and for costs against them, with no recourse to the estate. Whilst a successful PR may be ordered  costs from the estate or from the litigant personally he usually has no right, prior to the conclusion of the claim, to seek approval or protection from the court for the stance he is taking.

Neutrality is itself often misunderstood. It certainly does not involve advancing a case in favour of one side or another or providing witness evidence (although a PR may be asked to give evidence for one side or another). It also does not involve, other than at the invitation of the Court or with the agreement of all the parties, assisting the Court since ultimately doing that will favour one party over another. In almost all cases staying neutral means simply doing nothing, thereby not incurring any costs – or any risks – in the litigation.

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