The Supreme Court has held that the insurer of a solicitor, whose negligence led to mirror wills being ineffective, should pay the costs of both parties to the action to have the wills rectified.
The insurer was ordered to pay the parties’ costs directly to them, on the basis that it had funded the litigation by urging one of the parties to initiate the litigation in order to mitigate the insured solicitor’s position. The insurer had admitted the solicitor’s liability from the outset.
Therefore, it was inevitable that, if the will was upheld and if the Supreme Court had ordered the costs to be paid from the estate, the will beneficiary would have a right to seek damages from the solicitor’s insurer to reconstitute the estate that had been depleted by the costs of the litigation.
With this in mind, it was logical to order the insurer to pay the costs of the litigation directly to the parties: an approach that had been adopted in two recent High Court decisions involving invalid wills.
The Supreme Court’s approach shows common sense and a heightened awareness of the potentially grave impact of costs orders where rectification of a will is involved and where an estate may be relatively modest.
The case is a reminder to solicitors and their insurers that even when rectification proceedings are successful there could be a high cost attached if the matter drags on. This should encourage insurers involved in such cases in the future to agree to pay the costs automatically.
Another point of interest is the fact that, adopting a pragmatic approach to costs, the court was prepared to take the “fairly remarkable course” of requiring counsel to waive their rights to success fees, under CFAs with the instructing solicitors, in order to achieve a just outcome in this case.
(Marley v Rawlings and another (Costs) [2014] UKSC 51 (18 September 2014).)