The Benefits of Obtaining a Beddoe Order

 

What is a Beddoe Order?

A Beddoe Order is an order made by the Court in a dispute regarding a Will, trust fund, or the split of an Estate. This type of order is a tool which can be used by a trustee/executor to manage their risks during litigation. The Order gets its name from the case of Re Beddoe [1893] 1 Ch 547, where it was stated “…a trustee who, without the sanction of the court, commences an action or defends an action unsuccessfully, does so at his own risk as regards the costs….”

Essentially, a Beddoe order offers cost protection, to the applicant trustee or executor, from the personal risk of incurring adverse costs when they are involved in some sort of litigation against a third party, and the risk of claims from beneficiaries in a situation where they have not adequately defended the claim.

A Beddoe application can be made to the Court under Part 64 of the CPR and the application will seek directions from the Court regarding the claim. Similar to a protective costs order, if the trustee receives approval from the Court for their proposed action, the trustee will have the ability to recover their costs of the action using an indemnity from the estate, even if the outcome of the claim is not in their favour.

 

Should I Apply for a Beddoe Order?

Bringing or defending legal proceedings to dispute a Will or the split of an estate can be risky and may lead to the trustee being responsible for paying any legal costs incurred if they are unsuccessful in the claim.

This type of order provides a type of permission from the Court to proceed with a litigation against a third party. The Court will agree to indemnify the applicant, by providing the Beddoe order, as long as they are satisfied that the applicant is justified in making or defending the claim.

In Re Beddoe, the Judge stated:

“I entirely agree that a trustee is entitled as of right to full indemnity out of his trust estate against all his costs, charges, and expenses properly incurred : such an indemnity is the price paid by cestuis que trustent for the gratuitous and onerous services of trustees; and in all cases of doubt costs incurred by a trustee ought to be borne by the trust estate and not by him personally”

If you are a litigant in person, or representing a party in the litigation of a dispute regarding a will, trust, or estate, an application for a Beddoe Order should first be sought to avoid the risk of a costs order being brought against the person bringing or defending the claim, if they are the unsuccessful party.

 

Can a Beddoe Order be Contested?

As a general rule, the Court has discretion to decide upon whom legal costs should fall. In the majority of cases where there is a Beddoe Order in place, the costs will usually be borne by the estate. In the trust dispute case of Green v Astor and Others [2013] EWHC 1857 (Ch), it was held that a beneficiary may be held liable for costs in the circumstance that their unreasonable conduct resulted in the generation of unreasonable costs. In the case, Roth J stated:

“In my judgment, a beneficiary cannot expect to be immune from liability in costs irrespective of his conduct. An order of costs is not to be applied as a sanction for the intemperate and frequently insulting language of Mr Astor’s correspondence. But in my view, where unreasonable conduct by a beneficiary is responsible for generating substantial costs [here said to be £400,000] on the part of a trustee or personal representative as regards an application to the Court, it is appropriate that the burden of those costs should be borne by the beneficiary and not fall on the trust or estate and thus on the beneficiaries as a whole…”

How Can ARC Costs Assist?

ARC Costs have been successful in dealing with costs arising from these types of disputes for and ensuring that any adverse costs do not fall on the client personally but are recovered from the estate instead as the order has provided indemnity.

ARC Costs are a team of experienced Law Costs Draftsmen who can provide assistance in all matters of costs, including drafting your Costs Budget and Bill of Costs, aswell as conducting negotiation of costs. We have experience in recovering and disputing costs in litigant in person cases, as well as assisting law firms in their recovery of legal costs.

We can be contacted via email at info@arccosts.co.uk or by telephone on 01204 397302. For more information on legal costs, please find out more about our speciality areas of expertise and our services on our legal costs page.

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