Oliver Helfrich discusses the benefits of mediation in contentious probate matters

Within our Firm’s practice there has, over the past few years, been a noticeable upsurge in contentious probate instructions, in which family members will seek to contest the will, and the distributions thereunder, of a deceased relative. The reasons for this trend are no doubt manifold, but probably include the increasing complexity of family arrangements, and that people are living longer with the attendant rise in capacity-related illnesses such as dementia.

The legal bases upon which a will, and the distributions thereunder, may be challenged are various and wide-ranging, and as a challenge will typically seek to utilise as many of these bases as possible, there is a tendency for legal proceedings to be complicated and costly in equal measure.

L&H recently concluded a complex, high value, and long-running contentious probate matter, where our clients, the disinherited family members, disputed a deceased’s relative’s will (and the distributions thereunder), in circumstances where the testator left their entire and considerable residuary estate to a number of charities, by-passing their immediate family.

During this dispute a number of legal bases for challenge were raised on behalf of our clients, including: lack of testamentary capacity; want of knowledge and approval; undue influence; proprietary estoppel; breach of trust; and, claims under the Inheritance (Provision for Family and Dependants) Act 1982.

The dispute was eventually settled at a one-day mediation with our clients effectively receiving approximately half of the residuary estate.

Mediation; what is it?:

Mediation is a form of alternative dispute resolution (ADR), described by the Centre for Effective Dispute Resolution (CEDR) as:

“[a] flexible process conducted confidentially in which a neutral person actively assists parties in working towards a negotiated agreement of a dispute or difference, with the parties in ultimate control of the decision to settle and the terms of resolution.[1]”

Mediation should not be confused with arbitration, another form of ADR, in which the third party, the arbitrator, acts much like a judge (applying legal principles) albeit in a less formal “out-of-court” setting.

Typically, a mediation takes the form of a series of meetings between the mediator and the parties, either jointly, or with each party meeting separately with the mediator. The mediator is in control of the process, which is why selecting the right mediator for a particular dispute is essential.

If the parties do reach a settlement, this is recorded in writing and signed as a binding and enforceable record of what the parties have agreed; on the other hand, should the parties be unable to achieve a settlement, and the matter subsequently be litigated, the parties will be unable (as a mediation is confidential) to refer to what was said during that mediation at trial.

The parties to a dispute can agree to a mediation at any stage from before the issuance of court proceedings to shortly before trial, and whilst there is no hard and fast rule, it is often the case that the sooner the parties can mediate, once their respective positions are sufficiently clear and have been disclosed to one another, the better.

Research undertaken by CEDR for its (biennial) 7th Mediation Audit (2016) records mediation as having an 86% (approx.) aggregate settlement rate[2].

Why mediation:

The general advantages of mediation broadly include: the saving of time and expense; the avoidance of a stressful adversarial public trial; and, the creativity and flexibility that mediation can offer in terms of resolving the underlying issues to a dispute, which may not be immediately obvious even to the parties themselves; something which the court, with its emphasis on legal formality and principle, is often not best placed to deliver.

The Isle of Man courts are increasingly expressing judicial frustration at parties failing to resolve their differences by way of ADR, with this frustration occasionally manifesting itself in orders that each party, even in circumstances where one party has “won”, bear their own legal costs (i.e. the presumption that in litigation the “loser pays the winner’s costs” is rebutted). There is also case law in the UK, to which the Manx courts frequently have regard, to the effect that a party who refuses to mediate and subsequently wins in court may be deprived of the normal order that “loser pays the winner’s costs”.

Why mediate contentious probate disputes in particular?:

In addition to the general advantages of mediation identified above, most contentious probate disputes will be suited to mediation for a variety of reasons including: preservation of the estate assets for the beneficiaries, rather than dissipating them on litigation; avoiding any escalation of family conflicts; the process allows the principal parties to tell their own stories (should they want to) in a relatively unrestricted manner (a cathartic exercise that a trial is often unable to facilitate); the privacy and confidentiality of the mediation process means that a family’s dirty linen isn’t washed in public; preservation of any long-term relationships between the trustees and the beneficiaries and between the beneficiaries themselves; and, the flexibility and creativity that mediation offers generally may be especially beneficial in finessing outcomes, including variations of a will or trust, that are more advantageous to the parties than is achievable through litigation, where a Deemster’s options, following determination of the issues, can be fairly limited.

Whilst parties are free to mediate without legal representation, CEDR advise, in cases involving legal rights (which contentious probate matters typically do), that the parties attend mediation with a legal representative or with an appropriately qualified adviser[3]. This advice goes onto explain that “… the legal representative plays an important role advising a party, particularly when evaluating the alternatives to reaching a settlement at the mediation. Furthermore, when an agreement is reached at mediation, this is usually written down and signed by both/all parties, becoming a binding contract. Signing such an agreement can have implications for the parties’ respective legal rights and their legal representatives will be able to advise them accordingly.” To this ought to be added that the drafting of the settlement agreement itself can be a fairly tricky and time consuming process and this is another area in which it is anticipated that an experienced legal representative will add value.

There will clearly be situations where a dispute is resolvable through “without prejudice” negotiations (either in a course of correspondence or at a “face to face” meeting(s)), and in these happy situations the costs of a mediation are avoided; however, in the subjective and highly emotive world of contentious probate a mediator will often prove a most valuable asset.

For any contentious probate instructions please don’t hesitate to contact us.

[1] https://www.cedr.com/docslib/The_Seventh_Mediation_Audit_(2016).pdf

[2] https://www.cedr.com/about_us/library/glossary.php

[3] https://www.cedr.com/solve/advice/?p=5


E: ohelfrich@longandhumphrey.com

W: http://www.longandhumphrey.com/legal-team/oliver-helfrich/

Long & Humphrey, Advocates and Notaries Public, The Old Courthouse, Athol Street, Douglas, Isle of Man, IM1 1LD

In addition to Contentious Probate Long & Humphrey offers services across a range of legal specialisms including: Corporate & Commercial, Employment, Employment-based and Points Based System (PBS) Immigration, Insolvency, Licensing, Dispute Resolution, Public law (including Doleance / Judicial Review), Private Client, and Property.

(Long & Humphrey is the trading name of Long & Humphrey Advocates Limited, registered in the Isle of Man under Company Registration Number: 131896C)