CPR Part 64 Claims: Guidance for Executors and Trustees

Administering an estate can be  a daunting  process for executors and one that occurs infrequently in most people’s lifetimes. Fortunately, in most cases, the administration process is straightforward and most of the more complex aspects are easily resolved as the estate or trust is administered.

Occasionally, the administration process may be delayed, or stalled altogether, because of a problem that the executors cannot resolve. This may arise because there is an issue preventing administration activity being carried out, it may be  about how the estate should be distributed, (where it cannot be distributed under the terms of the will), it may require an order to bring property back into the estate, or a range of issues for which the executors require the court’s guidance.

This is where the Civil Procedure Rules Part 64 (CPR part 64) can provide a way to seek the court’s guidance over how to proceed.

CPR part 64 also applies to trustees and to charities, but for this article, we will use the term “executors” throughout.

What is CPR Part 64?

CPR part 64 is a set of rules within the Civil Procedure Rules 1998 which allows the court to determine any question arising in:

• The administration of the estate: Dealing with the assets and liabilities of a deceased person.
• The execution of a trust: Ensuring a trust is management properly in line with the terms laid down by the deceased.
• Applications for an administration order: Asking the court to supervise or direct the administration of an estate or trust.
• Applications under the Variation of Trusts Act 1981: Seeking court approval to make changes to a trust.
• Applications under section 48 of the Administration of Justice Act 1982: This allows trustees to obtain court approval of certain decisions to protect themselves from liability.

In practice, the most used aspect of CPR 64  is in the administration of estates, where executors face  barriers to delay administration, or are unable to make progress  in distributing the estate without the court’s assistance. The court’s ability to determine any question that falls under the above list, is a useful tool for executors

Overall, CPR part 64 can assist executors, administrators or trustees with:

• Clarification of duties and responsibilities
• Avoidance of personal liability in the decision-making process
• Resolution of disputes to break through an impasse and remove uncertainty around how to proceed

Whilst CPR part 64 is particularly useful to executors, it is not exclusive to them, and any person with an interest in an estate or a trust can bring a claim under CPR part 64 for the determination of any matter within this rule.

Examples of CPR Part 64 Applications

Frequently encountered court order made under CPR 64 are:

‘Put Up or Shut Up’ Orders (Cobden-Ramsey Orders)

This provision applies where a Grant has been issued to the executors and a person is intimating a claim against the estate but failing to bring it. Threats of a claim have the potential to prevent the administration of the estate indefinitely, holding it to an unknown ransom.

The executors can apply to Court or to the Probate Registry for an order requiring the person disputing the Will to issue a claim by a certain date, failing which the executors have the authorisation of the court to complete the administration of the estate.

A ‘put up or shut up’ order will not prevent a claim being issued after the estate is fully administered but it will usually mean that it is easier to have the claim struck out. It will give the executors protection against personal liability for costs and it will substantially increase a late claimants risk of having to pay both sides costs of the claim, so it is a useful tool.

Beddoe Orders (Permission to Litigate)

A Beddoe Order will authorise the executor to l bring or defend a litigation claim on behalf of the estate. It will also provide the executor with an indemnity from the estate for any legal costs they incur in the litigation, including adverse costs.

Therefore, the earlier in the litigation it is made, the better, because it gives both sides certainty around the recovery of the executors’ costs.

However, it is not a panacea to remove all costs risks for the executor. Beddoe Orders will usually authorise the executors to incur costs up to a specific stage in the litigation, quite often for the purpose of allowing mediation to take place. In a complex case, this can force the executors to go back to court several times with further applications if the claim proves difficult to settle, incurring substantial costs each time.

Benjamin Orders

A Benjamin Order will authorise the executor to distribute the estate on the happening of a specific event or on its failure to occur. It is most often used where the executors have tried but failed to locate a beneficiary for several years, during which, other beneficiaries are denied receipt of their benefit in the estate.

A Benjamin Order gives the executors the authority to distribute the estate along with full costs protection should the missing beneficiary later turn up to claim their benefit from the estate.

However, before a Benjamin Order is made, the executors must be able to satisfy the court that they have taken reasonable steps to locate the missing beneficiary, and this may include engaging genealogists to trace missing beneficiaries.

Devastavit (“Laying Waste”) Claims

This sort of claim usually arises from the mismanagement of a deceased’s estate by a non-professional executor. Tt can be an allegation levelled at a professional executor, so it is something that professional executors need to be aware of.

Such claims are regularly intimated, but rarely brought, and there are few reported cases as most brought claims do settle.

Generally, the claim may arise from a failure by an executor or administrator to do any one or more of three key things:

1. To collect in all of the estate assets so that assets are ‘lost’ to the estate.
2. To pay all of the estate liabilities before distributing the net estate.
3. To distribute the estate in accordance with the terms of the will (or intestacy).

Claims for an Inventory and Account

This sort of claim may be brought by the executors to bring assets back into the estate or the trust where they have been wrongfully removed, or by a beneficiary challenging an executor’s management of estate property and record keeping.

Who Pays for CPR Part 64 Applications?

Generally, the costs of a CPR 64 application are paid out of the estate, unless the application was caused by a party’s misconduct. In this case, the court may order that person to pay.

This means the proportionality of costs is key – executors should ensure that the application sought is justified by the value of the issue at stake.

Minimising the Risks of a CPR Part 64 Claim

Executors can take steps to protect themselves and reduce the need for CPR 64 applications:

• Renounce probate if there are early signs of serious risk (though rare in practice).
• Publish statutory notices in The Gazette and local press to protect against unknown creditors.
• Obtain indemnities from beneficiaries before making distributions.
• Take out insurance for missing beneficiaries or unknown creditors.
• Retain a contingency fund to cover unexpected claims.

How Napthens Can Help

Our specialist team of lawyers are dedicated entirely to matters of contentious probate.

We regularly advise executors, administrators and beneficiaries on:

• Whether a CPR 64 application is the right course of action.
• Preparing and presenting applications to court.
• Exploring alternatives such as negotiation or mediation.

Get in touch via our contact form to speak with an expert.