Legacy disputes and legal costs
Whenever a legacy dispute arises, one of the first considerations of the trustees is likely to be the charity’s position regarding legal costs.
Trustees have to balance their legal duty to safeguard the charity’s legal entitlement to a legacy with their obligation to manage the organisation’s finances prudently; and in practice this is not always easy to do.
However, as difficult as it can be, the thorny question of legal costs cannot be ignored. Trustees must ultimately be able to justify their actions in dealing with a legal claim, and should always bear in mind that they could, in extreme cases, become personally liable for costs.
One particular problem they face is uncertainty about what the total legal costs could amount to. It is not easy to estimate the likely cost of defending a challenge or making a court application. There are so many variables at play that any exercise in predicating the fees which could be incurred often amounts to little more than educated guesswork.
It is nevertheless essential for trustees to give this issue detailed consideration and where there is doubt, to call upon guidance from lawyers who are experienced in dealing with legacy disputes.
Careful thought needs to be given to the economics of a contested legacy dispute, and whether the charity’s intended course of action is likely to be proportionate.
As specialist inheritance dispute lawyers, we are adept at carrying out costs/benefits analyses in litigation scenarios and can provide a useful sounding board for trustees facing a legal challenge to a legacy or some other contentious probate dispute.
In law there are rarely guaranteed outcomes, so even in cases with the strongest merits consideration should be given to what the charity’s position would be if the case is lost. The ‘loser pays’ principle could mean that the charity will not only miss out on its legacy but may also have to pay a large proportion of the opponent’s costs – a figure it has no direct control over. And even if the charity wins the case, it might not necessarily be able to recover the costs it has incurred, so this also has to be factored into any risk analysis.
One way of limiting the charity’s exposure to costs is by appointing solicitors who are willing to work on a No Win, No Fee basis.
The principal benefit of this method of funding is that if the charity loses, then it will not be left facing a large legal bill from its solicitors for the work they have carried out in dealing with the case. In terms of a trustee’s duties this has very obvious advantages.
Our team of contentious probate lawyers have been dealing with No Win, No Fee funding for well over a decade. While many firms of legacy dispute solicitors do not offer this form of funding, we trust our own judgement and are always willing to consider it, along with other funding options.
You can read more about No Win, No Fee funding for legacy disputes here https://legacydisputes.co.uk/no-win-no-fee-legacy-disputes/.
We will be happy to review any case free of charge and provide the trustees with:
- An estimate of the costs that could be incurred;
- A costs/benefits analysis;
- Guidance on recoverability; and
- Consideration of the availability of No Win, No Fee funding
So, if you are facing a legacy dispute and wish to safeguard the charity’s legal entitlement while ensuring that your chosen course of action is above criticism, then we would love to hear from you.
