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EWHC holds that executors need not produce justification of legal fees

Monday, 12 March, 2018

The England and Wales High Court has ruled that an executor who obtains legal advice during estate administration need not provide details of the reasons for the resulting charges in the estate accounts, other than the basic voucher stating the fees charged.

The case concerned the estate of Louise Patience, who died more than twenty years ago, leaving her property among her four adult children. As executors she named one of her daughters, Anita Mussell, and her solicitor, David Williams. On her death these two applied for, and obtained, a grant of probate and proceeded to administration of the estate.

However, before the assets were distributed, a dispute arose in which the beneficiaries objected to the legal fees incurred by the executors. There was an attempt at mediation, but this was followed by further litigation, ending with an attempt by the two executors to persuade the court to approve the final estate accounts, and to direct that the estate should be distributed accordingly.

Two of the four beneficiaries, Christopher and Veronica Patience, continued to object to this. They challenged 26 payments for legal services from two different law firms, complaining that the entries in the estate accounts and the associated documentation did not give enough information to establish whether the charges made by the executors' solicitors were reasonable. They insisted that they were entitled to this information and that the onus was on the executors to demonstrate the reasonableness of the solicitors' charges. Some of the bills, they pointed out, merely identified the estate, the addressee of the invoice, the statement that the charge made consists of professional charges, and then the amount of the charge.

The executors maintained that they did not have to provide this information, although neither side was able to cite any case on the legal test for challenging an entry in an executor's or trustee's account.

The judge, Matthews HHJ, looked for guidance in other sources, notably Williams, Mortimer and Sunnucks' Executors, Administrators and Probate; Daniell's Chancery Practice; and s.31 and s.35 of the Trustee Act 2000.

Matthews concluded that, in relation to the estate accounts, an executor has only to show that the sum concerned was indeed spent, and that it was spent in the 'fair execution' of the estate administration. He would normally prove the disbursement by producing a voucher, but this need not disclose the number of hours worked or the hourly rate used to arrive at the total charged, or give a detailed breakdown of exactly what work was done, 'unless and until some other evidence is adduced by the beneficiaries to that end'.

In particular, he said, the executor is not required at the outset to prove that the charge made is reasonably incurred, or reasonable in amount: 'These are matters which may arise in the assessment of solicitors' costs, but they are not matters which arise, at least initially, in considering whether the executor may put the sum into the accounts ... That is what the system of assessment of solicitors' costs is for.' Third parties who in substance pay such costs may seek to have them assessed, he noted.

Matthews accordingly directed the two dissenting beneficiaries to reconsider whether they wished to continue their objections and, if so, to resubmit them in writing for a final decision (Mussell v Patience, 2018 EWHC 430 Ch).

Sources