Appointment as a Personal Representative – Pitfalls to avoid

The Wilkes Partnership, Contentious Probate, Birmingham , Solicitor, Law

Mark Terrar, Senior Associate in the Contentious Probate Department at The Wilkes Partnership comments on a recent case that highlights liability issues around the administration of an estate.

The recent judgement in Lyons v Kerr-Robinson [2016] EWHC 2137 (Ch) demonstrates the importance of a Personal Representative (“PR”) understanding their duties. Also, it reminds us all of the potentially significant costs liabilities that may have to be borne personally by a PR.

The role of a PR of an estate can be a tricky one. Once appointed, the PR has a duty of care imposed on them, meaning they can be held personally liable for any errors they make. Although the majority of estate administrations are relatively trouble free, complexities can arise, which really do require expert advice to be obtained.

The case also highlights the importance of seeking proper advice from the outset.

In this case, Andrene Kerr-Robinson, the PR, was defending an action on the basis that she had wrongly received a Grant of Letters of Administration and had ignored the request to return it. She appointed a firm of licensed conveyancers as her litigators. The firm, which was not regulated by the SRA, was subsequently closed down by the Council of Licensed Conveyancers for acting outside their authority.

During the litigation, the firm charged Mrs Kerr-Robinson with what the Judge described as “extraordinary” hourly rates and when the firm ceased practicing Mrs Kerr-Robinson was left with little means of redress. She was subsequently removed as Administrator and was ordered to deliver the estate assets to an interim Administrator. She was later ordered to account to the Estate the monies spent on legal fees for defending the action.

In making his judgement, Master Matthews stated that Mrs Kerr-Robinson had not acted reasonably, as she had engaged lawyers who were not authorised to conduct litigation and had agreed a retainer with the firm yet did not question their high charges or place any limit on the value of work to be carried out.

Whilst defending the litigation, Mrs Kerr-Robinson was told that her costs would come out of the Estate and consequently knew it was not her money she was spending.

She was ordered to pay the sum of £86,075.40, being the minimum amount which could be shown to have been paid out of the Estate monies to pay the firm’s fees. As the Council of License Conveyancers had disclaimed any liability to indemnify the Estate because the firm had acted outside of any work it was authorised to do, Mrs Kerr-Robinson was personally liable for the full amount.

This case highlights the dangers of using non-regulated solicitors to conduct litigation and the importance of seeking proper advice, and of acting honestly and reasonably. It also reiterates the importance of a PR understanding their duty of care and potential liability for breach of that duty.

There is a common misapprehension that the costs of litigation will automatically be paid out of the estate. There are many circumstances in which they will be. However, the question of how costs will be dealt with always falls to be determined by the Court and a PR who acts unreasonable, or in breach of their duty can expect to have to bear their costs personally or even worse be liable for an adverse costs order. Mrs Kerr-Robinson erred in two ways; not instructing an expert and using estate funds on a claim which was a personal matter to her rather than to the estate’s benefit. Careful thought and the correct advice from an expert at the outset could have avoided the significant liability to which she found herself exposed.

Whether the estate is likely to be relatively problematic or perhaps more challenging, the above case should not be a deterrent to any potential PR but a reminder that the role should not be undertaken lightly.

The Contentious Probate Team at The Wilkes Partnership regularly advises beneficiaries and personal representatives in respect of all disputes involving an estate.  If you wish to discuss any contentious issue in respect of an estate, please contact Mark Abrol, Mark Terrar or Emma-Louise Green on 0121 710 5832/5927/5925 respectively.