SUING OR DEFENDING ON BEHALF OF AN ESTATE OR TRUST FUND: DID YOU KNOW YOUR COSTS BUDGETS MUST BE FILED WITH THE PLEADINGS?

A solicitor has pointed out to me the surprise provisions of Practice Direction 3F – on Costs Capping.  The title of  the Practice Directions is deceptive. There are also mandatory provisions in relation to the filing of costs budgets at a very early stage in all cases where a party anticipates seeking costs from an estate or trust. It is an obligation that is easy to miss. Particularly for those practitioners not familiar with actions against trusts and estates.

KEY POINTS

  • Where a party anticipates seeking costs out of a trust fund (including the estate of a deceased person) a costs budget has to be filed at an extremely urgent stage.
  • In  a Part 7 claim the costs budget has to be filed and served with the first statement of case. (This includes a defendant filing a defence).
  • In a Part 8 claim the budget has to be lodged with the evidence. If a defendant does not intend to use evidence then the costs budget must be filed with the acknowledgment of service.
  • The parties can, thereafter, consider applying for costs capping.
  • The court can consider making a cost capping order of its own motion.

PRACTICE DIRECTION – 3F

SECTION II – COSTS CAPPING IN RELATION TO TRUST FUNDS

Costs capping orders in relation to trust funds
5.1 In this Section, ‘trust fund’ means property which is the subject of a trust, and includes the estate of a deceased person.
5.2 This Section contains additional provisions to enable –

(a) the parties to consider whether to apply for; and

(b) the court to consider whether to make of its own initiative,

a costs capping order in proceedings relating to trust funds.

5.3 This Section supplements rules 3.19 to 3.21 and Section I of this Practice Direction.
5.4 Any party to such proceedings who intends to apply for an order for the payment of costs out of the trust fund must file and serve on all other parties written notice of that intention together with a budget of the costs likely to be incurred by that party.
5.5 The documents mentioned in paragraph 5.4 must be filed and served –

(a) in a Part 7 claim, with the first statement of case; and

(b) in a Part 8 claim, with the evidence (or, if a defendant does not intend to serve and file evidence, with the acknowledgement of service).

5.6 When proceedings first come before the court for directions the court may make a costs capping order of its own initiative whether or not any party has applied for such an order.

One comment

  1. Adrian Witt · · Reply

    Hello

    I have to confess that I was blissfully unaware of this provision until your post, so thank you for that.

    What do you think the position would be in relation to the need to file a Budget, in a case where the defendant estate was of no value, but where there was an MIB involvement?

    My scenario is that I act for a claimant in an RTA matter where D1 is the estate of the deceased and D2 is the MIB. The estate is of no value and as the deceased was uninsured, there is no insurance policy that he/his estate benefits from. The MIB is therefore D2 in the case and in reality it will only ever be the MIB who pays any costs in the case.

    On one interpretation of PD 3F, we do not intend to apply for costs from the estate, but on another, we would do, so that the MIB can pick up the costs tab through their contingent interest.

    To some extent I see that it is a timing issue as a Budget will be required at some pint and therefore why not do it at the outset, rather than at the later stage and run the risk of the defendants saying that we have failed to file a budget and being in the nightmare that is relief from sanctions.

    Adrian

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