In a recent legal battle amidst the world of estate administration, the Court of Appeal’s decision in Peter Ian Brealey v Shepherd & Co Solicitors (2024) EWCA Civ 303 has caused a debate.
The case centres around the entitlement of solicitor executors to charge fees for their services in the absence of explicit provisions in the deceased’s will, and without written consent from all executors. It is a legal dispute which highlights the evolving landscape of trustee and executor remuneration, as well as underscores the importance of having robust protective measures in place also.
Diving in, at the core lies the estate of Mrs. Ann Brealey, whose passing in April 2014 initiated a series of disputes regarding the administration of her estate. Her will appointed both her brother and the partners of Shepherd and Co solicitors as executors, and the legal complexities of managing the deceased’s home and loan recovery saw Shepherd and Co solicitors engaged for their legal expertise. However, the crux of the matter emerged when the firm billed a substantial sum of £153,507.38 for their services, prompting one of the beneficiaries to contest the legitimacy of these charges.
Here, the absence of a provision within the will explicitly permitting professional executor fees posed a significant hurdle, with Section 29 of the Trustee Act 2000 providing a framework for charging fees with written consent from all executors. As a result, the case unearthed a crucial oversight: despite having two partners at Shepherd and Co, only one participated in the estate’s legal proceedings, and crucially, had not provided written consent for charging fees.
The claimant then pursued an assessment of these costs, ultimately leading to a pivotal ruling, with the High Court upholding the decision that in the absence of a charging clause in the will, no fees could be rendered. This verdict persisted through an unsuccessful appeal to the Court of Appeal, solidifying the importance of explicit consent from all executors for professional executor remuneration.
Brealey v Shepherd & Co Solicitors now serves as a beacon, illuminating the necessity for clarity and transparency in estate administration. More importantly, it underscores that without suitable protection, such as meticulous documentation and adherence to legal protocols, correcting such oversights would be nearly impossible.
The case highlights the critical role of after-the-event (ATE) insurance in safeguarding against potential financial liabilities arising from legal disputes. ATE insurance provides coverage for legal costs incurred during litigation, shielding individuals and entities from the financial ramifications of unsuccessful legal proceedings. In the context of estate administration, where disputes are not uncommon, ATE insurance offers a crucial layer of protection against unexpected legal expenses.
What’s more, the case also underscores the significance of proactive risk management strategies, in that by procuring ATE insurance, parties involved in estate administration can mitigate the financial risks associated with legal challenges. Essentially, ATE insurance serves as a prudent investment, ensuring peace of mind and financial security amidst the complexities of estate litigation.
In conclusion, Brealey v Shepherd & Co Solicitors emphasises the necessity for explicit consent in professional executor remuneration and sheds light on the pivotal role of ATE insurance in mitigating legal risks. This case serves as a powerful reminder that without the right protective measures in place, rectifying such legal and financial wrongs would not have been possible.
A Unique Approach to ATE Insurance
As the legal landscape continues to evolve and adherence to best practices and proactive risk management remain paramount in navigating the complexities of estate administration, we’re proud to say that amberis are here to help and support our clients in simplifying these challenges.
We do this by working as a truly independent FCA regulated insurance broker working with industry leading insurers to create bespoke ATE solutions which are best suited to meet the protection needs of solicitors and their clients, and our 20 years’ experience has allowed us to build prosperous relationships with a range of commercially aware, highly trusted insurers.
With amberis, you can rest assured you’re working with the best. Our underwriters are credible, UK domiciled and regulated by FSCS, with a high claims payment ratio and willing to communicate and engage with our customers directly.
As a result, we’re able to offer a unique and flexible approach to ATE insurance, and we can work seamlessly alongside your team as a strategic partner.
