This briefing note is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice.

Mirror will mix-up
Claire-Marie Cornford
11 December 2014

Mirror will mix-up

The costs judgment of the Supreme Court in Marley v Rawlings has been published.  This article explains the liability for legal costs.

The underlying case related to the will of Alfred Rawlings. In May 1999, Mr Rawlings mistakenly signed a will intended for his wife and his wife signed a will intended for him. The wills were in simple mirror form. Their solicitor had presented the wills to Mr and Mrs Rawlings for execution and both signatures were attested by the solicitor and his secretary. Mrs Rawlings died before her husband in 2003. The will signed by Mr Rawlings left his residuary estate to an adopted son, Terry Marley, to the exclusion of his natural sons. Following Mr Rawling's death in 2006, Mr Marley sought to rectify the will and admit it to probate so he would inherit the estate. In response, the natural sons claimed that the will was not valid, so they should inherit the estate on intestacy. The net estate was relatively small.

A High Court Judge and the Court of Appeal held that the execution of the will did not comply with Section 9(b) of the Wills Act 1837. This was because Mr Rawlings intended to sign a different will and the will that he did sign could not be rectified under Section 20 of the Administration of Justice Act 1982. Mr Marley appealed to the Supreme Court and won, inheriting his father's estate. But what about the legal costs of this unfortunate mix-up?

Mr Marley contended that as the losing party, the natural sons should pay his legal costs. The natural sons contended that both parties' costs should fall on the estate as they had made a reasonable challenge (as shown by their success in the lower courts) to the validity of the will based on an error which occurred in the execution of the will or, alternatively, the costs liability should fall on the solicitor as he was responsible for the error. The solicitor's insurer, who had also underwritten Mr Marley's legal costs in the Court of Appeal and the Supreme Court, argued that the court should be wary before making a costs order against a third party; the solicitor owed no duty to the natural sons; and the sons chose to contest the litigation to the Supreme Court.

Lord Neuberger in the Supreme Court noted that even though the legal costs were modest, an order that all parties' costs be paid out of the estate would result in little, if anything, being left in the estate for Mr Marley, without further litigation against the solicitor for damages for the diminution in value of the estate. The solicitor had no defence to the claim. Consequently, Lord Neuberger removed the intervening process and ordered the solicitors' insurer to pay: (i) Mr Marley's legal costs up to and including the Supreme Court; (ii) the natural sons' legal costs up to and including the Court of Appeal; (iii) their solicitor's disbursements in the Supreme Court – the terms of their Conditional Fee Agreement with their solicitors, prevented recovery of the solicitor's fees; and (iv) their Counsel's base fees in the Supreme Court, subject to Counsel disclaiming the right to recover any success fee under their CFA, which was agreed.

The small size of the estate was clearly relevant to the final decision of the Supreme Court as an order that the estate meet the costs would have deprived Mr Marley of any benefit. Had the estate been more substantial, the outcome may have been different. As the Supreme Court did not offer any further guidance, we wait to see how this aspect of the judgment will be applied by the lower courts. The solicitor had no defence to a damages claim by Mr Marley, but the insurer required him to pursue the litigation (by way of mitigation), so this was also a case where there was a strong case in favour of third party liability for the costs of three rounds of litigation; a short-circuit was therefore appropriate in order to avoid further litigation and costs.