Page 6 - PIC-Magazine-Issue23-Autumn-Winter-24

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PREDICTIONS
t is difficult to make predictions in the ever- changing world of costs. Every year new issues emerge which result in significant disputes and increased time spent by solicitors and Costs Lawyers dealing with matters. The field of costs is dynamic and the incentives for parties to dispute
costs results in new forms of challenges emerging with often alarming regularity. Prior to 2017 for example, many personal injury solicitors and in fact many Costs Lawyers had not been involved in solicitor and own client assessments or, if they had, they could count on one hand the number of such challenges. That all changed with the arrival of specialist firms
to challenge deductions from damages in respect of success fees and costs shortfalls. Since then, many Costs Lawyers tasks list have been filled with such cases. The litigation has resulted in at least three prominent Court of Appeal decisions, one Supreme Court decision (still pending), multiple High Court decisions and calls, including from the Master of
the Rolls, for fundamental reform to the process of assessing solicitors’ costs.
Against that background, it is a bold person that makes a prediction as to the next big costs issue that may emerge. However, for the purpose of this article I will dare to be bold and so this is my prediction; in the next few years we will see a significant increase in costs challenges by beneficiaries of estates frustrated at the level of costs incurred by professional executors, including solicitors.
The problem that gives rise to such disputes will be familiar to anyone with an interest in this area of law, or those who themselves have acted as executors, or been the beneficiary of an estate. It is common for a will to nominate a solicitor as a professional executor or, where a lay executor is appointed, for that lay executor to decide that s(he) would benefit from the
involvement of a professional to administer the estate. The costs of the executor are to be paid from the estate and thus the higher the legal costs, the lower the residuary of the estate left to be distributed to the beneficiaries. This is unlikely to cause any problem when the beneficiaries and professional executor are ad idem and the value brought to the administration by the expertise of the solicitor is understood and appreciated. However, where disagreement emerges, beneficiaries may become increasingly frustrated
by the costs being incurred by the solicitors and seek redress.
Until recently, the prevailing understanding in the profession was that it was practically very difficult
for a beneficiary to raise such a challenge. For the purpose of a costs assessment, the beneficiary was not a client as the executor was technically the solicitor’s client. Accordingly, the beneficiary could not seek a traditional assessment of the solicitor’s costs. They could seek a third-party assessment under section 71 of the Solicitors Act 1974, however the decision of the Court of Appeal in Tim Martin Interiors Ltd v Akin Gump LLP [2011] EWCA Civ 1574 appeared to limit the scope of challenges that could be brought by a third party to such a degree that a third party assessment would usually be of limited utility for a beneficiary. Whilst a beneficiary could challenge the costs contained in the estate accounts, in Mussell
v Patience [2018] EWHC 430 (Ch), the High Court determined that on such an application the solicitor was not required to show that the costs incurred were reasonable or proportionate in amount. Instead, the executor needed only to show that the costs were incurred in the fair administration of the estate. That appeared to leave few useful options for a beneficiary who sought to challenge the costs incurred by a solicitor in administering an estate.
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