Contesting a Will in NSW: Who Bears the Legal Costs?
When disputes arise over a will, emotions often run high, and the financial implications can be just as daunting. Contesting a will in New South Wales (NSW) is a legal process governed by Wills & Estate Planning Law, offering individuals the opportunity to challenge the distribution of an estate. But one critical question looms large in these disputes: who pays the legal costs?
This article delves into the complexities of contesting a will, focusing on the legal costs involved and how they are determined. We’ll explore common scenarios, relevant legislation, and practical steps to navigate such disputes effectively.
Understanding the Basics of Contesting a Will
Contesting vs Challenging a WillWhile the terms are often used interchangeably, contesting a will typically refers to disputes over the fairness of the will's provisions, such as claims under the Family Provision Act 1982 (NSW). Challenging a will, on the other hand, questions its validity, citing issues such as lack of testamentary capacity, undue influence, or fraud.
Who Can Contest a Will?Under NSW law, eligible persons who can contest a will include:
Spouses or de facto partners of the deceased
Children of the deceased (including adopted children)
Dependents or those in a close personal relationship with the deceased
Former spouses in specific circumstances
The Legal Costs of Contesting a Will
How Are Legal Costs Determined?Legal costs in will disputes are typically influenced by the complexity of the case, the duration of the legal proceedings, and the nature of the claim. Costs include solicitor fees, court filing fees, and other expenses like expert reports.
The ‘Loser Pays’ PrincipleIn NSW, legal costs often follow the “loser pays” principle, meaning the losing party may be ordered to cover the winning party’s legal fees. However, this is not always straightforward in will disputes, as courts exercise discretion when making cost orders.
Estate Pays the CostsIn some cases, the costs of both the applicant and the respondent may be paid out of the deceased's estate. This is more common when the claim is considered reasonable or arises from ambiguities in the will.
When Does the Estate Cover Legal Costs?
The estate may bear legal costs under the following circumstances:
Ambiguity in the Will: If the language or intent of the will is unclear, both parties may argue their positions at the expense of the estate.
Reasonable Claims: Courts may determine that a claim under the Family Provision Act is justified, even if it’s ultimately unsuccessful, leading to costs being paid from the estate.
Disputes Caused by the Testator: If the deceased left conflicting instructions or failed to provide for dependents adequately, the estate might bear the costs of resolving the dispute.
When Does the Claimant Pay Legal Costs?
Claimants may be required to pay legal costs in the following situations:
Frivolous or Weak Claims: If the court deems the claim to be without merit, the claimant may be ordered to pay both their own and the other party's legal costs.
Unreasonable Conduct: Prolonging proceedings unnecessarily or acting in bad faith may result in adverse cost orders against the claimant.
Factors Courts Consider in Cost Orders
NSW courts consider several factors when deciding who pays legal costs in will disputes, including:
The Financial Position of the Parties: Courts may be more lenient towards claimants with limited financial means.
The Size of the Estate: Larger estates may be better equipped to bear legal costs.
Conduct of the Parties: Cooperation and reasonableness during proceedings can influence cost orders.
Outcome of the Case: Courts may award costs proportionate to the level of success achieved by the parties.
Steps to Minimise Legal Costs When Contesting a Will
Attempt MediationMany will disputes in NSW are resolved through mediation, which is faster and more cost-effective than going to court. Mediation allows parties to negotiate and reach a settlement without incurring extensive legal fees.
Use Fixed-Fee ServicesSome law firms offer fixed-fee packages for will disputes, providing transparency and predictability in costs.
Choose No-Win, No-Fee ArrangementsCertain cases may qualify for no-win, no-fee arrangements, where legal fees are only payable if the claim is successful.
Legislation Governing Will Disputes in NSW
Key legislation relevant to contesting a will in NSW includes:
Contesting a will is not only financially taxing but also emotionally challenging, often straining family relationships. Understanding the legal process and potential outcomes can help manage expectations and minimise conflict.
Relevant Case Law
Singer v Berghouse (1994): Established the two-stage process for determining Family Provision claims.
How long does it take to contest a will in NSW?The timeframe varies depending on the complexity of the case but generally ranges from 6 months to 2 years.
What happens if the estate runs out of funds to cover legal costs?If the estate is insufficient, the parties may need to bear their own legal costs.
Contesting a will in NSW is a significant legal undertaking, with costs being a major consideration. While some cases see legal expenses covered by the estate, others may result in adverse cost orders against claimants. Understanding the legal framework and seeking expert advice are crucial steps to protect your interests and minimise financial risks.
At New South Lawyers, our experienced team specialises in Wills & Estate Planning Law, offering personalised guidance and practical solutions for your unique circumstances.
