Legal costs are often a concern for many people who are considering a family provision claim, particularly if the deceased’s estate is modest in size.
Both the plaintiff and defendant’s fees are usually subtracted from the value of the estate, which reduces the assets available for distribution to existing beneficiaries and claimants.
However, a recent case has highlighted the problems that can arise when the parties involved become acrimonious and refuse settlements or mediation. Let’s see how the situation unfolded at NSW Supreme Court.
Costs far exceed legacy in claim
Earlier this year, we explored this particular case in more detail. In summary, the plaintiff unsuccessfully argued that she was the deceased’s de-facto spouse and should therefore receive the entirety of the man’s estate under intestacy laws.
Despite failing to prove her status as a de-facto partner, the court awarded her $75,000 from the estate because she had been dependent on the deceased and lived within the same household prior to his death.
However, the issue of costs has become important, after it was revealed that the plaintiff racked up fees of nearly $236,000 during the claim. The estate’s administrator – the deceased’s brother – recorded even higher costs of $252,646.
The combined legal costs therefore totalled nearly half a million dollars for an estate that was worth only $760,000. Furthermore, this total was only available if the deceased’s superannuation can be included as notional estate.
Judge’s decision on costs
Section 99 of the Succession Act 2006 sets out the guidelines for decisions on costs.
Broadly speaking, a judge can order that the money is paid out of the estate and/or the notional estate. However, they also have the power to set a maximum limit on legal fees that can be assigned to the estate.
In this case, Justice Michael Slattery took the latter option and ruled that the plaintiff’s costs should be capped at $100,000.
Justice Slattery added that this order is based on the assumption that the man’s superannuation is available as notional estate – a matter that is still to be decided. The administrator’s costs were paid out of the estate.
What does this ruling mean for my claim?
Costs are an important issue for our clients, and Gerard Malouf & Partners Will Dispute Lawyers is keen to allay any concerns claimants may have regarding legal fees.
We are a no-win, no-fee firm, which means clients won’t have to pay anything until they receive a settlement in their favour.
Nevertheless, please contact us today if you’d like to learn more about our fee structure and how it applies to family provision claims.