Problematic Probate (Part 1)

Transcription

1 Problematic Probate (Part 1) How to avoid a will dispute (and a potential negligence claim). The purpose of this series of articles is to give a litigator s point of view on the validity of wills and other testamentary documents. The intention is not to be prescriptive on how to draft the perfect will, but rather to give an insight into what issues are being raised and litigated and what decisions the Courts are making. What a will draftsman can do to prevent a problem clearly depends on the circumstances. It is hoped that this short overview will at least raise awareness of the issues. Profession Negligence White v Jones Prior to the decision in White v Jones [1995] 1 All ER 691 a disappointed beneficiary had no recourse against a will draftsman on the basis that that firstly the beneficiary was not a party to the contract between the testator and the draftsman, and secondly there was no claim in tort for pure economic loss for the loss of an expectation. Everything changed with White v Jones when the House of Lords extended the duty of care owed by the draftsman beyond the Testator, to the intended (and disappointed) beneficiaries. The House of Lords view was that where a special relationship arose as a result of the defendant draftsman giving advice which he knew the Testator would rely on, then the draftsman was required to exercise such care as the circumstances required. In the case of a will, the negligence would not actually be revealed until after the death of the Testator, by which time it was too late. For this reason the House of Lords agreed it was right to extend it to a disappointed beneficiary. This has led to numerous claims by disappointed beneficiaries against the unfortunate draftsman. Not all of them are successful but it is better to avoid the argument (and the costs consequences) in the first place by being aware of the sorts of issues which can arise with regards to validity of the will. There are four main areas of validity disputes: 1. Lack of Proper Formalities 2. Lack of Testamentary Capacity 3. Lack of Knowledge and Approval 4. Undue Influence This article will deal with Formalities.

2 Lack of Proper Formalities The obvious place to start is Section 9 of the Wills Act 1837 as amended by the Administration of Justice Act 1982: [9 Signing and attestation of wills] [No will shall be valid unless (a) it is in writing, and signed by the testator, or by some other person in his presence and by his direction; and (b) it appears that the testator intended by his signature to give effect to the will; and (c) the signature is made or acknowledged by the testator in the presence of two or more witnesses present at the same time; and (d) (i) (ii) each witness either attests and signs the will; or acknowledges his signature, in the presence of the testator (but not necessarily in the presence of any other witness), but no form of attestation shall be necessary.] Presumption of Due Execution Very helpfully (from the point of view of the draftsman and the Testator) there is a presumption of due execution. So where on the face of it a will appears to be properly executed and attested then it will be assumed to be valid. Where circumstances are such that suspicions are raised, then the Court may exercise its discretion and pronounce against the will, but only if there is the strongest evidence that the formalities have not been complied with. This was reinforced in Sherrington v Sherrington [2005] EWCA Civ 326: Mr Sherrington was an experienced solicitor who instructed a non qualified person to draw up wills for himself and his second wife. His will effectively made the children of his first marriage dependent on his second wife. There were numerous obvious errors in the will (ie referring to the testatrix and containing a clause only relevant to minors) as well as conflicting evidence as to how the will was executed and attested. The children of the first marriage successfully applied to set aside probate and the second wife appealed to the Court of Appeal. There were two issues in relation to due execution: whether the Deceased had signed the will in the presence of the two attesting witnesses, and whether those witnesses signed intending to attest as witnesses that the Deceased signed in their presence. One of the witnesses had given evidence that she did not see the Testator sign and did not see his signature on the piece of paper she was asked to sign. The other witness varied between saying he did not know if the Deceased had signed, didn t remember seeing him sign, and did not see him sign.it was held that due to the confusion of the witnesses, this evidence could not possibly amount to the strongest evidence necessary to overcome the presumption of due execution. The decision in Sherrington was confirmed in Channon v Perkins [2005] EWCA civ 1808: The Witnesses gave robust evidence that they did not sign Professor Channon s will. Indeed they were adamant they had not, one saying that she would have remembered being

3 asked as she disliked the Testator, and the other saying she would have remembered such a request as significant because he was a figure of some distinction at the college where they worked. However, neither witness could explain their signatures on the will and there was no dispute that the signatures were genuine. It was held that on the face of it the will was valid, as their evidence did not amount to the strongest evidence necessary to rebut the presumption. This is then some comfort for the draftsman. However the evidence is sometimes the strongest evidence necessary with the result that the presumption is occasionally rebutted. This inevitably leads to allegations of professional negligence on the part of the will draftsman: Professional Negligence cases - execution Gray & Others v Richards Butler [1995]: There were two witnesses to the will, one was a neighbour of the Testator, the other an employee at Coutts. The will was held to be invalid on the basis that execution formalities were not complied due to the fact that the two witnesses were never present at the same time and couldn t have witnessed the Testator s signature together. The disappointed beneficiaries issued a claim in negligence against Richards Butler on the basis that the will draftsman had not given the Testator specific enough instructions on attestation. It was held that the will draftsman did owe a duty of care to explain attestation appropriately. In this case the nature of the Testator was considered. She was described as a gregarious outgoing lady who who had no interest whatsoever in legal matters and, it was claimed, would have paid no attention to legal formalities or written instructions. It was held that the Testator was intelligent enough to understand the written instructions and that the instructions themselves were adequate in the circumstances. (However a point to note is that the executor of the failed will was a partner at Richards Butler and had authorised payment of administration costs before the will was declared invalid. The Claimant claimed a refund of those costs. It was held that consideration needed to be given to three legal principles: 1 Where personal representatives had paid funds from the estate to a third party subsequently found not to be entitled, those truly entitled could recover the money from anyone other than a bonafide purchaser. 2 Remuneration paid to a solicitor executor under the terms of a charging clause was properly regarded as bounty in the same way as a legacy under a will. 3 A personal representative enjoyed all the powers of a personal representative unless and until the grant was revoked or had determined. It was held payments to the firm were not payments to a bona fide third party and were therefore recoverable in the same way that legacies would be. The firm had to refund everything it had been paid in the way of costs from the estate). Contrast the case of Esterhuizen v Allied Dunbar [1998] 1 ITELR 211: Here a will failed through only having one witness. A representative of will writing service at Allied Dunbar had attended on the Testator who was virtually a recluse. The representative was unable to find another witness (despite offering to drive the Testator to the local petrol station, an offer which the Testator unsurprisingly refused). The representative left the will with the Testator with written instructions on what to do and returned on one more occasion to get it executed with no success. Eventually the Testator arranged execution himself but

4 either did not read or understand the instructions because his signature was witnessed by only one person. It was held that a will writing service is subject to the same duties as a solicitors firm and that it is well within the draftsman s duty of care to assist his client with execution. Where possible the Testator should be invited to the draftsman s office or the draftsman himself should attend the Testator s home with another member of staff. In this case the Testator s reclusive nature was considered and it was held further steps should have been taken. Humblestone v Martin Tolhurst Partnership [2004] EWHC 151(Ch): This will was signed by two witnesses in anticipation of the Testator signing. He never did. The will was returned to the firm by the principal beneficiary, checked by secretary who pronounced it all in order and placed it in the firm s storage vaults. When the Testator died the obvious error was discovered, the will was held invalid and the estate passed on intestacy. The disappointed beneficiary sued the firm. It was held that the firm was under a duty to check execution of a will even if it was not specifically asked to do so. Professional negligence: Intention to be final will Corbett v Newey [1996]: The Testator received negligent advice that she could execute a will but leave it undated on the basis that it would only be effective after certain lifetime gifts were made. It is contrary to the Wills Act 1837 for a will to be subject to external conditions, ie conditions which have to be proved by extrinsic evidence. Consequently the will was held to be invalid as there was no intention by the Testator for it to have immediate effect. The draftsman had to compensate the disappointed beneficiaries. Costs were paid from the estate. Corbett v Bond Pearce [2006]: Subsequently further action was taken by the beneficiaries under the will that was admitted to probate. This was a claim against the solicitors for a sum equal to the costs ordered out of the estate. The solicitors argued that this was double recovery and they were successful in first instance. On appeal in 2001 the Court of Appeal held that the duty of care was owed to the Testator and the beneficiaries under the later (invalid) will, and not to the beneficiaries under the earlier will as the Testator had not intended that earlier will to have effect. It was also held that to compensate the estate for the loss occasioned by the costs would amount to double recovery. However this order was then amended again to hold that if the estate had insufficient funds to settle the costs, the legacies and creditors under the earlier will, then the personal representative may recover damages to make up the shortfall. So in essence a double recovery was allowed. Professional negligence-delay White v Jones [1995]: There was a two month delay between receiving instructions and death. It was held that failure to prepare a will within an acceptable timescale will amount to negligence and the firm had to compensate the disappointed beneficiaries. X v Woollcombe & Yonge [2001]: In this matter the solicitor prepared a will for a terminally ill client within a week, but the Testator died before execution. Despite her illness it was shown that her death was no expected so quickly was and it was held that the solicitor had not been negligent. In this

5 case Mr Justice Neuberger suggested that 7 days would be a sufficiently short period in most cases where the client was elderly or likely to die. He also said where there is a plain and substantial risk of the client s imminent death, anything other than a hand-written rough codicil prepared on the spot for signature may be negligent. Profession Negligence-Failure to remind Atkins v Dunn Baker [2004] EWCA Civ 263: The Testator had remarried and was well aware that his marriage had revoked his previous will. In February 1997 he gave instructions for a new will, a draft of which was sent to him. The testator never replied and the firm did not write to remind him. He died in August 2000 intestate. It was argued that the solicitor s retainer can only be brought to an end in limited circumstances which did not apply here and that the solicitor was under a duty to follow up. It was held that the retainer was to draft and submit a draft will and that on the facts the retainer ended there and could not be extended so as to say the solicitor was under a duty to send a reminder. In addition it was shown that the Testator was well aware of the consequences of not having the will in place and had given no instructions to have it completed by any particular day or event. Had he not been so aware, the matter may have been decided differently. Conclusion It appears that the overriding principle when giving instructions on execution is know your client. The less sophisticated client needs more explanation and written instructions may not be enough. If your client is ill or elderly, bear in mind what Mr Justice Neuberger said in X v Woollcombe & Yonge. We live in a more litigious society and the scope for professional negligence claims (particularly involving deceased estates which due to enhanced property values are more and more valuable) is on the increase. It is always better to take a little bit more care in the beginning than have to deal with the aftermath of a mistake later. For more information please contact: Alison Regan Solicitor Alison.Regan@russell-cooke.co.uk This material does not give a full statement of the law. It is intended for guidance only and is not a substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be accepted by Russell-Cooke LLP. Russell-Cooke LLP March