It appears that a beneficiary can challenge a solicitor’s fees incurred through administering an estate, after the Court of Appeal recently handed down judgement in Daniel Kenig v Thomson Snell & Passmore LLP.
Background to the case
Ms Cunnick passed away in 2019 with a valid will. Under the Will, the applicant, Daniel Kenig, and his sister were beneficiaries. Ms Cunnick’s brother was the sole executor and instructed the Respondent law firm to administer the estate. The original cost estimate given by the respondent law firm was between £10,000 and £15,000 plus VAT and expenses. This estimate turned out to be wildly inaccurate as costs quickly escalated to over £54,000. As administrators, the respondent firm met their costs by transferring sums from the estate.
The applicant challenged these costs under Section 71(3) of the Solicitors Act 1974 as someone “interested in any property” out of which the administrator paid the legal fees. The “property” in this case being the estate funds.
The judge at first instance allowed the costs to be re-evaluated due to the four-fold increase from the estimated to final costs and the speed in which this increment occurred.
The respondent solicitors appealed. Their ground for appeal was based on the decision in Tim Martin Interiors Ltd v Akin Gump LLP. In their mind, the fact the bills had been approved by the party chargeable – the executor – some 12 months prior to the application being made was lethal to the application.
The Court of Appeal findings
The Court of Appeal dismissed the respondent’s appeal, affirming the decision of the costs judge at first instance. They distinguished Tim Martin on the facts and came to the view that, despite not being the party directly chargeable, the beneficiary applicant’s interest in the estate was sufficient to entitle him to question the bills raised. The bills were to be assessed under Section 71(3) of the Solicitors Act 1974.
Effects of the outcome of this case
This case has confirmed that beneficiaries may challenge solicitor charges in respect of estate administration costs, despite the instructing executor approving them. For practitioners, this highlights the importance of cost estimates and updates and for Executors it is imperative to obtain the agreement of beneficiaries as the estate administration progresses.
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