Personal Representatives In Litigation
Dealing with the administration of an estate can be time consuming and problematic without the added headache of litigation (either defending or bringing a claim).
A Personal Representative (PR) will need to understand the legal implications to fulfil their duties in deciding how best to conduct litigation on behalf of the estate and with consideration to the beneficiaries, as undoubtedly any litigation is likely to diminish funds in the estate for distribution.
When can proceedings be bought?
This will depend on whether the PR is an executor (appointed by a will) or administrator (certain classes of people in certain orders who can apply for probate where there is no will).
The authority of an executor drives from the will itself so there is no need for them to have first obtained a Grant of Probate before issuing a claim.
This is established authority from the early case of Chetty v Chetty . However, a Grant of Probate is required to prove title so no order or judgment can be made by a court without the Grant of Probate.
Where there is no will, an administrator’s standing to issue court proceedings will arise only once Letters of Administration have been obtained.
However, a full grant could take some time to obtain. If there is urgency in preserving, bringing or defending a claim relating to the estate, then you can apply for a limited grant (Grant pendent lite (pending suit)) which will last until the claim has been determined/settled. A Cessate (second) grant would then need to be obtained in due course to complete the estate administration including distribution.
During litigation, there may also be a need to apply for a limited grant (known as a Grant Ad Colligenda) to preserve assets in the estate.
What happens to ongoing litigation?
If the deceased was already engaged in litigation, then usually the PR will step into their shoes and became the Claimant/Defendant and client.
In particular, s1 of the Law of Reform (Miscellaneous) Provisions Act 1934 confirmed that a cause of action survives a party’s death for the benefit of their estate. There are certain exceptions and limitation of types of damages recoverable by an estate, as opposed to the deceased themselves.
Some claims are personal to the deceased and will not survive death, such as an Inheritance Act Claim.
The proceedings may need to be stayed pending substitution of the PR under Part 19 of the Civil Procedure Rules (CPR).
The PR will need to be mindful of whether to continue any ongoing litigation given the size of the estate (and therefore ability to pay any adverse judgment and/or costs) as well as the appetite of the beneficiaries to wait until conclusion of any litigation before getting their inheritance.
Who bears the costs of litigation?
Practitioners need to make sure on the death of the client, they are subsequently taking instructions from the correct person with status on behalf of the estate and the appropriate funding/retainer is transferred/endorsed/entered by them.
A PR may need to apply for a prospective costs order under Para 6.1 of the Practice Direction to CPR 64 to ensure that the estate provides an indemnity for the litigation costs without personal liability to the PR.
A PR will need to ensure that they seek advice from specialist (contentious) litigation lawyers, separate from those dealing with the (non-contentious) estate administration so that they can weigh up the risks, benefits, and costs in pursuing, defending or continuing ongoing litigation involving either the estate or the deceased.
Different dynamics and considerations are involved when litigating on behalf of an estate (and the potential beneficiaries).
If you require legal advice regarding the administration of your estate and personal representation in litigation, call our dispute resolution experts on 0808 271 9413 or request a call back online.