When making a claim against an Estate using the 1975 Act there are various tactics that can be employed to protect a claimant’s costs position.
Our article on the Inheritance Act 1975 Claims – Who Pays the Costs, sets out the general position on how the Court’s powers to order one party to pay the other’s costs can become part of the tactics of resolving 1975 Act claims. Here we consider further tactics our specialist solicitors adopt on costs to protect our clients when pursuing claims under the Inheritance (Provision for Family & Dependants) Act 1975 (“the 1975 Act”).
The decision of the Court
The starting point for the Court when determining which party should pay the other’s costs is that the loser should pay the winner’s costs. This can obviously work both ways, exposing clients to a risk that should they lose they could potentially be ordered to pay a contribution towards the other parties’ costs, as well as bearing their own.
What steps can you take?
There are a number of tactical steps which can protect a party from this risk, particularly where they are faced with unreasonable or obstinate opposition forcing them to take the case to trial without proactively engaging in settlement beforehand.
Not only do we help our clients consider obtaining insurance to protect them against this potential risk but we also advise them to make a well-timed and well-pitched Part 36 offer. This type of offer results in automatic costs consequences in certain situations. It is intended to penalise the other party by saying “you should have accepted the offer back then, you didn’t so you can pay for our costs since the date of the offer” if it is unreasonably refused.
These automatic costs consequences can severely damage a defendant’s inheritance from an estate as they currently include:-
- Interest being added to the claimant’s award at a rate of up to 10% above base rate from the date the offer expires (21 days after the offer is made);
- The defendant being ordered to pay the claimant’s legal costs on the indemnity basis (closer to an 80% recovery rate rather than the normal standard recovery rate which can be closer to 60%) from the date the offer expires until trial;
- The defendant paying their own legal costs from (at least) the date the offer expires until trial;
- Interest being added to the costs at a rate of up to 10% above base rate from the date the offer expires; and
- An “additional sum” awarded on top of the claimant’s main award, of 10% of the award up to a maximum of £75,000.
An offer they can’t refuse
These additional costs consequences can be so damaging that a well-timed Part 36 offer pitched at a sensible figure puts defendants under significant pressure. These offers can therefore make all the difference between a case settling or not settling and going to trial.
It will be seen from the above how a client instructing a specialist solicitor who is experienced in the tactics of how best to approach a 1975 Act claim can be invaluable.
At Stephens Scown we have a range of funding options which we can offer clients to help fund their case to conclusion. We will therefore do all we can to get our clients the outcome they deserve without depriving them of the right to pursue their claim simply because the costs of doing so can be seen as an insurmountable hurdle. We would therefore always encourage clients to call our specialist team to discuss options regarding funding a claim sooner rather than later following a loved one’s death.