1975 Act Claim Costs

If an executor who is party to a 75 Act claim is also a beneficiary (he is one of the sons of the deceased) does that bar him from claiming the costs of the defence from the estate?

A client of mine has said he is involved in a 75 Act claim and the solicitors for the claimant have said that he must pay his costs out of his share of the inheritance and not from the estate due to the fact he is an executor and beneficiary. Whereas the claimant (the other son) is able to recover his costs from the estate.

Paul Hutchinson
Hutchinson Legal & Associates Limited

Costs incurred as executor - ie fulfilling the function of supplying information to the court and parties about the estate - can in my view be properly recovered from the estate.
Costs incurred as defendant beneficiary are ones which he is personally liable for (subject to any order to the contrary). So if the estate is large enough that it can meet any claim from the claimant and still cover those costs out of the defendant-beneficiary’s share of what is left, then there should be no problem paying those costs out of the estate on account of that entitlement.
The claimant does have any right to claim costs out of the estate in advance - his right to recover costs depends on whether he succeeds in his claim/beats offers etc., though on occasion the court may order interim payments out of the estate to enable him to fund the claim (see Weisz v Weisz).

Alexander Learmonth
New Square Chambers

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An executor is entitled to their costs of complying with their duty to provide the requisite information on the estate. If the executor then defends the claim, the right to recover further costs may be subject to having an appropriate agreement with the beneficiaries, rather than any right under CPR or the exercise of the judge’s discretion.

I suspect that the matter has been compromised without a trial, so that there is no question of the court awarding costs. In which case it is a matter of “horse-trading”, the outcome of which will be dependent upon the wish of the siblings to have any form of relationship going forward. Of course, if it is down to “horse-trading”, this will cover all parties’ costs not just those of the executor beneficiary.

However, if the claim was resolved by the court, then the court order should also deal with costs. If only the claimant’s costs were awarded, the other parties would be liable for their own costs.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

When acting for a party with two hats in 1975 Act claims - Executor of the estate and a Main Beneficiary - I always operate two separate files and keep separate costs records. Far easier in the long run because the respective positions are fundamentally different.
Executor - neutral in the 1975 Act claim with a duty to supply all parties the relevant information. Beneficiary entitled to adopt their own position on the merits or otherwise of the claim and the usual costs follow the event consequences apply eg. if successfully defend the claim or beat offers.

Paul in your Friend’s matter - I suspect the answer for your friend is that Executor costs can come out of the estate in the normal way and the beneficiaries costs come out of that beneficiaries share of the estate.

Michael Henry
Debenhams Ottaway