At some point or another, most private client professionals will come across an estate whereby a dispute arises which can be attributed to any number of claims including:-
- Challenges to Wills
- Executor disputes
- Trust disputes
- Inheritance (Provision for Family & Dependants) Act 1975 claims
Although it can be concerning when issues such as these stall the administration of an estate, many estate disputes are suitable for resolution between parties without the need for Court proceedings to be issued. Under the Pre-Action Protocol, it is a pre-requisite that prior to the issue of proceedings, parties must at least attempt to engage in alternative dispute resolution (ADR) to try to narrow or potentially resolve the issues. Any party who unreasonably fails to engage before issuing Court proceedings would be criticised and would need to explain their refusal to the Court, putting themselves at risk of a potential adverse costs order against them.
Advantages of exploring ADR in estate disputes
The main advantage of solving a dispute through ADR is that it is generally much cheaper than pursuing a matter through the Court. In addition, Court proceedings can take months, if not years, to resolve meaning parties have impending litigation hanging over their heads, causing considerable anxiety and distress. Most people dealing with an estate have lost a loved one and will be coming to terms with this alongside a stressful dispute.
ADR on the other hand is flexible and can be arranged quickly once all information and documents become available. It is confidential and does not prejudice either parties’ case if the matter cannot be resolved.
Once a matter is set down for trial in a Court setting, the parties are at the mercy of the Court and the Judge will make a judgment based on the specific issues they are being asked to decide. ADR allows the parties to have a degree of control over the outcome of the matter and there is opportunity for parties to find some common ground and make concessions.
A decision made by the Court can be devastating for a “losing” party as the general rule in costs is that the “winner” pays the costs of the “loser”. ADR allows the parties to minimise this risk, if they are willing to compromise and reach resolution. Costs in ADR are often borne by each party as opposed to there being a “winner” or “loser”.
What types of ADR are available in estate disputes?
Negotiations in writing
Parties can exchange offers through correspondence in order to set out proposals, move negotiations forward or reach settlement. Any offer to settle is usually made on a “Without Prejudice” basis which means the correspondence will not be disclosable to the Court if the matter does eventually go to a trial. The only time the correspondence may be disclosable would be in the question of costs once final judgement has been made or if a parties’ conduct has been called into question.
This can be an effective way to deal with disputes when each party is being advised and represented by a legal professional.
Round Table Meetings
Round table meetings are usually informal and similar to mediation as it would be held on a Without Prejudice basis (again for protection of the parties should the matter proceed to Court).
Parties would usually attend in person or remotely, together with their legal representative. It is a good opportunity for all parties to understand what the main points of contention are or how far apart (or close to settlement) the parties are. Any agreement made at a round table meeting would not be binding until documented in a settlement agreement signed by all parties.
This is a cost-effective way of focusing parties’ minds and may assist in moving forward towards settlement. That said, parties need to attend with an open mind and a willingness to engage with the other side.
Mediation is voluntary and confidential, allowing the parties an opportunity to resolve the dispute in a measured atmosphere.
Parties do not need to come face to face at mediation and discussions will be facilitated by a professional mediator who will liaise between the parties. The mediator will be an expert in the area of law relating to the dispute.
Mediation can be done in person i.e., at a chosen venue (parties will be in separate rooms) or through remote means such as Zoom or Microsoft Teams. In estate disputes, issues are very often between family members or close relatives which can mean emotions run high. A mediator will listen empathetically to each party and often matters of a personal or sentimental nature can be overcome, allowing parties to focus on the main issues.
The difference between mediation and a Court making a decision is that the Court can deal only with the legal points. This can leave parties feeling unheard when a judgment is handed down, whereas in a mediation even issues which are not relevant to the proceedings can be agreed, such as distribution of sentimental items.
Mediation is an extremely effective way of resolving estate disputes and although it does incur costs for all parties, it is often a cheaper alternative to litigation as well as minimising the risk of legal costs being ordered against a party.
Parties usually bear the costs of mediation equally and if settlement is achieved it will be documented in a legal agreement signed by all parties on the day, in effect drawing a line under the dispute. Parties can leave the mediation with relief that the matter has been resolved but also with a feeling that they have been heard – it provides closure and allow the parties to move forward.