A battle over a relatively modest estate of less than £150,000 shows the sense of achieving a negotiated settlement where possible rather than resorting to protracted legal proceedings and adopting an excessively adversarial stance.
The argument stemmed from ‘mutual wills’ made by a married couple. Mutual wills are used when a couple both agree to a certain course of action that is binding on the other when one of them dies. They are commonly made when people marry later in life, when each has already had a family, as a means of ensuring that the surviving partner does not then give the couple’s joint assets to their own children to the exclusion of their spouse’s.
The protagonists in this case were the two families of the late couple. The wife had died in 2001, after they had made mutual wills. In both cases, the wills were drafted to pass the estate of the deceased to the surviving spouse and then, on the second death, the estates were to be divided between the couple’s respective families.
The husband created a new will in 2003, which excluded his late wife’s family from his estate. Her family contested the new will, claiming that the mutual wills executed by the couple bound him not to vary his will so as to exclude them. They won, beating the offer made by the husband’s family to settle the case.
However, when the dust had settled on the argument, the winners had incurred legal costs (under a ‘no win, no fee’ agreement) of more than £300,000.
When the argument as to the costs came to be heard, the fact that the husband’s family knew that the wife’s family had a no win, no fee agreement in place, and had rejected their solicitor’s repeated requests for mediation, weighed heavily against them. In addition, the husband’s family had made an offer to settle the claim that was rejected and was less than the sum eventually awarded to the wife’s family by the court.
The executors of the estate were ordered to pay the winners’ costs. Although legal costs payable in defending a challenge to a will can normally be paid out of the estate assets, in this case the court ordered that they should be paid by the executors out of their own assets.