Kostic v. Chaplin: A step-by step analysis of costs in proceedings
In the November 2013 issue of the STEP Journal,1 UK lawyer Mark Lindley addressed the England and Wales High Court decision on costs in Kostic v. Chaplin2 and its impact on probate and other non-estate decisions.
The Kostic case came to court when the only son of the deceased, Branislav Kostic challenged the validity of two wills on the grounds of lack of testamentary capacity. Both challenged wills designated the Conservative Party Association as the sole beneficiary of the estate while all other (earlier) wills named the son as the sole beneficiary. On the merits, the Court agreed with the son, and found that the two latter wills were invalid as they were made further to delusions suffered by the deceased.
In addressing costs, the Court considered the applicable principles, that is the “loser pays” principle in the Rules, except as set out in Spiers v. English.3 The Spiers decision set out two grounds for exceptions to the loser pays rule: first, costs may come out of the estate where “a person who makes a will or persons who are interested in the residue have really been the cause of the litigation,” and second, the costs may be borne by the parties themselves, if “the circumstances lead reasonably to an investigation of the matter.”
In the decision, Justice Henderson held that to a point, the Conservative Party Association was entitled to its costs payable from the estate. The judge held that it was appropriate for the association to make investigations into the deceased’s capacity, and obtain general information about the claim. To that point, the court held that the first exception applied and the association was entitled to its costs from the estate. Then, in the time, from when it received basic information to when the parties received detailed experts reports, the second exception applied and each party was responsible for its own costs. And then, finally, in proceeding further to trial, which the court noted is “adversarial and, not infrequently, very adversarial”, the court ordered that the association was required to pay the successful party his costs.
Thus, the court broke down the process into three discrete steps, and applied the costs principles in the Rules and Spiers v. English separately to each of those steps.
Following that decision, the exceptions to the ordinary costs rule that the loser pays, have been understood not to apply once the matter progresses to “ordinary hostile litigation.”
The reasoning in Kostic has been applied in other case law, not limited to estate cases. Courts have applied the principles to non-estate cases, such as insolvency matters where there is an analogy with probate proceedings.
The Kostic analysis is interesting in that it calls on courts to assess costs looking at each step and the decisions made by parties in the litigation process. It is a helpful guide for counsel to look to when advising clients how to proceed and the risks of costs implications throughout proceedings.
—
1. Volume 21, Issue 9
2. [2007] EWHC 2298 (Ch); [2007] EWHC 2909 (Ch)
3. [1907] P 122, 76 LJP 28, 96 LT 582
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Written by: WEL Partners
Posted on: January 10, 2014
Categories: Commentary
In the November 2013 issue of the STEP Journal,1 UK lawyer Mark Lindley addressed the England and Wales High Court decision on costs in Kostic v. Chaplin2 and its impact on probate and other non-estate decisions.
The Kostic case came to court when the only son of the deceased, Branislav Kostic challenged the validity of two wills on the grounds of lack of testamentary capacity. Both challenged wills designated the Conservative Party Association as the sole beneficiary of the estate while all other (earlier) wills named the son as the sole beneficiary. On the merits, the Court agreed with the son, and found that the two latter wills were invalid as they were made further to delusions suffered by the deceased.
In addressing costs, the Court considered the applicable principles, that is the “loser pays” principle in the Rules, except as set out in Spiers v. English.3 The Spiers decision set out two grounds for exceptions to the loser pays rule: first, costs may come out of the estate where “a person who makes a will or persons who are interested in the residue have really been the cause of the litigation,” and second, the costs may be borne by the parties themselves, if “the circumstances lead reasonably to an investigation of the matter.”
In the decision, Justice Henderson held that to a point, the Conservative Party Association was entitled to its costs payable from the estate. The judge held that it was appropriate for the association to make investigations into the deceased’s capacity, and obtain general information about the claim. To that point, the court held that the first exception applied and the association was entitled to its costs from the estate. Then, in the time, from when it received basic information to when the parties received detailed experts reports, the second exception applied and each party was responsible for its own costs. And then, finally, in proceeding further to trial, which the court noted is “adversarial and, not infrequently, very adversarial”, the court ordered that the association was required to pay the successful party his costs.
Thus, the court broke down the process into three discrete steps, and applied the costs principles in the Rules and Spiers v. English separately to each of those steps.
Following that decision, the exceptions to the ordinary costs rule that the loser pays, have been understood not to apply once the matter progresses to “ordinary hostile litigation.”
The reasoning in Kostic has been applied in other case law, not limited to estate cases. Courts have applied the principles to non-estate cases, such as insolvency matters where there is an analogy with probate proceedings.
The Kostic analysis is interesting in that it calls on courts to assess costs looking at each step and the decisions made by parties in the litigation process. It is a helpful guide for counsel to look to when advising clients how to proceed and the risks of costs implications throughout proceedings.
—
1. Volume 21, Issue 9
2. [2007] EWHC 2298 (Ch); [2007] EWHC 2909 (Ch)
3. [1907] P 122, 76 LJP 28, 96 LT 582
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