Charles Dickens’s Bleak House was a story about a disputed Will and the cost ravages of lawyers. The Australian Institute of Judicial Administration has recently issued a publication “Bleak House Revisited? Disproportionality in Family Provision Estate Litigation in NSW and Victoria”. The publication has arisen due to the alarming number of legal cases recently where Wills are being contested.

Part of the ongoing problem is the “No Win, No Fee” services offered by some firms whereby they actively encourage anyone to claim against a Will, knowing that mostly legal costs are paid out of the estate and not by the unsuccessful claimants.

In Evans v Perpetual a daughter of the deceased who was left a life interest in half of the estate with her brother receiving in full the other half, as the deceased had a belief that she was incompetent with money and easily led by others. She made a claim for a lump sum of $1m notwithstanding that the estate was not worth double that, mainly using evidence that she needed a new house or major work done to her old house and a holiday. The final judgment provided some differing income entitlements and a small lump sum payment. Costs were paid by the estate.

In Franks vs Franks a small estate of jus over $400,000 the deceased left nothing to her ex spouse and a small legacy to one son with he balance to the other son. The deceased and her husband were not divorced. The main asset was a house. Despite her thoughts that one son had abused her and making those claims in writing on several occasions, the court gave a life tenancy on the property to the husband and thereafter the balance to the two sons equally. The costs were $100,000 or 25% !!!

The “Armchair Principle” generally provided courts with an opportunity to put themselves in the deceased’s chair to make decisions on their estate distribution. This has been left so widely open that claims are made and encouraged to be made notwithstanding the eventual extra benefit that may be received not exceeding the current benefit particularly after the estate is substantially diminished by costs. The old principle of putting yourself in the position of the deceased seems to have been slowly changed to one that is “what is fairer”.

The Publication referred to above hopes to spark some debate and future resolutions in legislation that the existing judgements of costs against the estate are done away with and that claimants are responsible for costs.

In another case costs of $115,000 were run up against an estate with a value of only $215,000. Even still the judge concluded that the costs themselves were reasonable but “out of proportion to the nature of the proceedings and the value of the estate”.

In most cases, whether the distribution from the Will is amended or not, the final distribution always incurs a legacy to the solicitors who were not originally benefiting from the estate. An old lawyer colleague I knew before he himself died used to always state “It’s a shame to waste the estate on the Beneficiaries”! He may be shifting in his grave now at the thought of the law changing!!

PUBLICATION: ENVOY – The newsletter of The New Zealand Institute of Legal Executives
DATE: June 2012
AUTHOR: Andrew Johnstone, APEARS, Sydney, Australia

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