COSTS IN THE SUPREME COURT: NEGLIGENT SOLICITORS ORDERED TO PAY COSTS OF BOTH SIDES

What costs order should the Supreme Court make when an appellant succeeds in establishing that wills are valid despite the fact that they have been improperly executed because of negligence on the part of a solicitor? A pragmatic view was taken by the Supreme Court. The insurers of the negligent solicitors should pay the costs of all sides, bypassing an action by the estate.

FINDING THE DECISION

The press summary of the Supreme Court decision on costs following the decision in Marley -v- Rawlings [2014] UKSC [51] is available here.  The full judgment is available here.

THE ISSUES

The Supreme Court found that wills were valid when, due to an error by a solicitor, a husband and wife had mistakenly signed each others wills. The Supreme Court decided that the insurers for the solicitors should pay the costs of both parties in the High Court and Court of Appeal.

THE POSITION OF THE SOLICITOR

  • This was not a case where it could possibly be right to ignore the position of the solicitor.  The problem arose out of the solicitor’s negligence and the solicitor’s insurers had required the claimant to bring proceedings to seek to have the will upheld.
  • The appellant had a clear claim against the solicitor who would be ordered, in the event that costs were ordered to be paid out of the estate, to reconstitute the estate.
  • The insurers had underwritten the liability of the solicitor and the correct order was to order that the solicitor’s insurers pay the costs of both parties in the High Court and the Court of Appeal.
  1. Because an order that all parties be paid out of the estate would result in Mr Marley being able, in effect, to reconstitute the estate through a claim for damages against the Solicitor, it appears to me that the position is equivalent to one where the estate is very substantial in nature. Accordingly, an order that the parties recover all their costs out of the estate also seems justified in pragmatic terms, on the basis that all those costs would, in practice, be recovered by Mr Marley from the Solicitor, and by the Solicitor from his insurers.
  2. In those circumstances, rather than ordering that the parties receive all their costs out of the estate, and leaving it to Mr Marley to recover the costs from the Solicitor, and leaving it to the Solicitor to be indemnified by the Solicitor’s insurers, it seems to me that it is appropriate to order that the Solicitor’s insurers pay all the costs of Mr Marley and the respondents in relation to these proceedings throughout. I take some comfort from the fact that this was the order which was agreed on behalf of the negligent solicitor in not dissimilar circumstances in In re Bimson [2010] EWHC 3679 (Ch), an agreement which, at para 23, Henderson J referred to as “very proper”, and that in Gerling v Gerling [2010] EWHC 3661(Ch), para 50 HH Judge Hodge QC said in a similar case that he “assume[d] that there will be no order as to costs because the costs are going to be borne by the insurers acting for the solicitors who drafted the Will”.

In all these circumstances, it seems to me that the right order to make in this case is that the Solicitor’s insurers pay the costs of Mr Marley and of the respondents of these proceedings, including the appeal to the Court of Appeal and the further appeal to the Supreme Court.

COSTS IN THE SUPREME COURT

In the supreme court the respondent acted on a CFA. The terms of the CFA meant the respondent’s solicitors could only recover disbursements (which the insurers were ordered to pay). The insurers would only be liable to pay counsels’ fees in the Supreme Court if both counsel disclaimed their entitlement to a success fee (which both counsel did).