18 Thursday Sep 2014
On appeal from:  EWCA Civ 61
This is a costs judgment arising from Marley v Rawlings & Anor  UKSC 2. The substantive appeal was handed down in January this year and a judgment summary can be found here.
The appeal concerned the validity of a will, where a married couple wrote and signed identical wills, however, by an oversight of their solicitor, each signed the other’s will. It was decided the wills should be interpreted in accordance with the intention of the testators and therefore should be rectified to contain the typed part of the will corresponding to the correct signature.
The question in this hearing was how the costs should be borne. The appellant argued that in the course of usual litigation, the respondents should pay the appellant’s costs in all the courts. The respondents however argued that all of the parties’ costs should come out of the estate, or be paid by the insurers of the original solicitor whose negligence caused the wrong wills to be signed. The respondents’ legal representatives had acted under the traditional basis in the lower courts, but on conditional fee agreements (CFAs) in the Supreme Court.
The Supreme Court unanimously held that the original solicitors’ insurers ought to pay the costs of both parties in the lower courts. However, in relation to the costs arising from the litigation in the Supreme Court, due to the terms of the CFAs, the insurers were only liable for the appellant’s costs, the costs of the respondents’ solicitors’ disbursements and the costs of the respondents’ counsels’ fees. This was on the condition of the respondents’ counsels disclaiming any entitlement to their success fees under the CFA (which they did).
Where there is a reasonable but unsuccessful challenge to a will, the court will often order that all parties’ costs come out of the estate. However, there was considerable weight to the argument that this was ordinary litigation, where the usual principle of the losing party being liable for the costs would apply. This argument bore even more weight due to the small size of the estate, which would deprive the appellant of the benefit of the outcome.
However, in this situation, it was not correct to ignore the original solicitor’s negligence. The insurers had required the appellant to bring the case to attempt to have the wills upheld. The appellant therefore had a claim in tort against the insurers and would be able to claim that the insurer reconstitute the estate, should the court hold that the costs be borne by the estate. Therefore, the correct approach was to order the insurer to pay them directly.