Can a residuary beneficiary challenge estate administration costs?

A residuary beneficiary of an estate can challenge the costs incurred by a solicitor instructed by the executor in the estate administration.

The two main pathways for challenging costs are to:

1. make a formal complaint to the solicitor's firm, and if the complaint is not resolved to your satisfaction, to lodge a complaint with the Legal Ombudsman; and
2. apply to the court for an assessment of the costs pursuant to the Solicitors Act 1974.

1. Making a formal complaint to the solicitor's firm

Before taking any formal steps, it would be beneficial to compile as much information as you can regarding the costs incurred. This should include any bills or fee estimates provided.

The solicitor's complaints procedure should be made available to you on request or via their website. The Legal Ombudsman have provided a template for a letter of complaint including guidance if you are looking to raise a complaint yourself. This template can be found here.

What happens if the complaint is still not resolved?

If after eight weeks of raising the complaint, there has been no satisfactory resolution, you are then entitled to raise a complaint with the Legal Ombudsman.

It is important to note that the time limit for bringing a claim to the Legal Ombudsman is ordinarily one year from the act/omission, or one year from when you should have reasonably known that there was a cause for a complaint.

If the Legal Ombudsman supports your complaint, it can order the following:

1.  reduction or a refund of costs;
2. compensation for financial loss and emotional effects; and
3. non-financial remedies.

You can make a complaint to the Legal Ombudsman by their online form found at: https://www.legalombudsman.org.uk/how-to-complain/  

2. Apply to the court for an assessment of costs

In an assessment of costs the court will examine the amount that the client has been billed and determine how much the client should have to pay.

Whilst clients are entitled to an assessment of their solicitor's costs, this is also extended to include beneficiaries of an estate where they have an interest in those costs.

There are important time limits that apply in section 70 of the Solicitors Act 1974 that can affect a client's right to an assessment. These are:

• A client only has an automatic right to the assessment of a bill if it is made within one month of delivery of the bill.
• After the one month elapses, it is at the court's discretion as to whether to permit an assessment. The Solicitors Act provides that if the application is made more than 12 months after the bill was delivered, no order for an assessment shall be made unless "special circumstances" exists.
• If the bill was paid more than 12 months ago, it cannot be challenged.*

*The Court of Appeal has recently confirmed that this time limit might be disapplied where an executor has approved and paid a solicitor’s fees over 12 months ago but the beneficiary was unaware of that happening. The full judgment can be viewed at Kenig v Thomson Snell and Passmore LLP 

It is also important to be aware of the costs rules set out at s70(9) of the Solicitors Act, which states that unless costs are reduced on the assessment by 20% or more, the client (or applicant) will be responsible for the costs of the assessment. A complainant should therefore only apply for a formal assessment of costs if there is a good chance that the bill will be reduced by 20% or more.

For further information, please contact the wills and inheritance disputes team.