Posted in Fairness Campaigns

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As the Ministry of Justice’s (MoJ) proposed new fee structure for the probate service attracts increasingly heavy criticism (most recently from the Law Society), Peter Turvey summarises the arguments and asks: “is the MoJ missing an opportunity to make a radical change in the way that probate registries operate?”


Peter TurveyThe proposed fee structure has come under attack from many quarters, and rightly so.

  • The current probate registry system is virtually self-funding, meaning that the anticipated increase in fee income will simply subsidise other areas of the court service.
  • The proposed scale seems inherently unfair, with an illogical linkage to the estate value. The banding ranges are too broad and rigid, with a small increase in estate value leading to, proportionally, a huge increase in fee.
  • The use of the term ‘fee’ is itself open to debate. Is it really a fee? Or is it a tax, akin to stamp duty? It certainly won’t be earned in any way, under the normal definition of the word ‘fee’. For instance, there is not necessarily any more work involved for the probate registry in issuing a grant on a £20,000 estate (which will attract no fee under the new proposals) and one valued at £2,000,001 (where the fee will be £20,000).

These so-called fees are hugely in excess of charges that are made for similar services, such as Court of Protection and Land Registry applications. Or might this just be a prelude to large increases in those charges, particularly with the proposed Land Registry sell-off?

Meanwhile, plans to move the probate process online surely foreshadow the closure of district probate registries. Registrars are already under pressure to expand their workload with fewer staff and diminishing funds. Each registrar now has to oversee several registries.

A win-win solution

However, as well as picking over the faults in the proposals, it’s also important to face up to failings within the probate industry itself.

The Legal Ombudsman’s 2014 report identifies wills and probate as:

the third most complained about area of law, making up around 13% of the 8,000 complaints resolved by the Legal Ombudsman last year. This suggests there is a great deal that service providers and regulators could, and should, be doing to drive up standards...

And it ultimately concludes that:

Regulators, representative bodies, and government should work together to find a solution to the problems caused by an unregulated sector.

The report is depressing, but essential, reading. Consequently, when the MoJ invited responses to the proposed fees increase, I wrote back suggesting that here was an ideal opportunity to tackle the problem of maladministration.

The Legal Ombudsman’s figures reflect only those people who stand up and complain. Most do not. A lay executor may be unwilling to challenge a practitioner’s fees or, as is often the case, the practitioner is the executor, in which case beneficiaries do not know how or when to challenge fees, or are unaware that they can do so. If questions are raised, beneficiaries are easily confused and intimidated by legal-sounding language.

Intestacies

The situation is even worse with intestacies, where no individual has been appointed by the deceased. Entitled relatives are beholden to one relative who obtains the grant of letters of administration, and who may in turn be influenced by the practitioner that he or she appoints – and unprepared to challenge fees or expenses.

Administration fees of over £30K on estates of £100K are not unknown.

In such cases human nature overrides any and all scrutiny; in other words, practitioners can rely on beneficiaries being aware that a disagreement over fees or any other aspect of the administration will delay the distribution and may also lead to a falling out between the complainant and other beneficiaries. Human nature being what it is, most people opt for a quiet life.

A new proposal

A wholesale change to the probate registries’ remit would revolutionise the way in which they operate. It would be self-funding, in the public interest and halt the abuses outlined by the Legal Ombudsman.

This is what I proposed to the MoJ:

  • All estates of £5000 and above would require the issue of a grant of probate (or letters of administration).
  • All such applications would attract a probate fee on a sliding scale relating to gross value, minimum £300.
  • Probate registries would employ staff trained in accounts and probate law.
  • All estate accounts would be submitted to the probate registry for auditing and approval prior to distribution. This is where the probate registry would earn its fee and the consumer reap the benefit.
  • Fully trained probate registry staff would examine all practitioners’ charges and fees, on the lookout for flawed payments and irregularities. They would identify shortcomings, incompetence which leads to overcharging and any expenses which should not be allowed. The probate registry would be entitled to make extra charges, either to the estate or to the practitioner, if the audit exposed any serious errors or omissions, or excessive fees. Only when the accounts were approved by the probate registry would the estate be distributed.

The benefits would be multiple: testators would be comforted in the knowledge that such scrutiny applied; the future of the registries would be secured; the consumer’s interest would be represented by trained staff; and those practitioners who take advantage of the current lack of scrutiny would be more careful about the work they do and how they charge for it.


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