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Clarion Legal Costs -
The High Court’s decision in William Francis Seymour v Ragley Trust Company Ltd & Ors [2025] EWHC 3400 (Ch) serves as a vital reminder of the difficulties faced by unsuccessful parties in displacing the general rule that the losing party pays the costs of the successful party. This case not only carries significant implications for family-estate and trust law but also reinforces the stringent requirements for overturning the usual costs order, i.e. the unsuccessful party pay the costs of the successful party,  particularly in the context of beneficiary disputes.BackgroundIn this case, the Claimant, who is the Earl of Yarmouth,  sought the removal of the existing trustees of the Ragley family trusts, aiming to replace them with independent professional trustees. After his claim was dismissed, the Claimant sought to displace the standard costs rule, arguing that he had experienced partial success and that the conduct of the Defendants warranted a different outcome under CPR 44.2(2)(a).The Claimant contended that the costs of all of the parties should be paid out of the trust assets, alternatively that an order should be made for a payment of only a proportion of the Defendants’ costs, of no more than 50%.The Categorisation of Trust Litigation and CostsAt the outset of his judgment, Master Brightwell provided a useful summary of the key principles governing costs in trust disputes, drawing on the Court of Appeal’s decision in Price v Saundry[2019] EWCA Civ 2261 and the longstanding authority of Re Buckton [1907] 2 Ch 406. These principles divide trust litigation into three main categories:Trustee Applications for Court GuidanceTrustees seek judicial assistance on matters such as trust interpretation or administration.The costs of all parties are typically paid from the trust fund, as the estate is the primary beneficiary.Non-Trustee ApplicationsAn outsider (e.g. a beneficiary or other interested party) seeks guidance that could have been requested by the trustees.Costs are treated in the same way as trustee applications, with payments typically made from the trust fund.Beneficiary DisputesA beneficiary makes a hostile claim against trustees or other beneficiaries.This is treated like common law litigation, with costs generally following the event.It was not seriously disputed that this case fell into the third category: a beneficiary dispute. The Claimant had brought a “root and branch” attack on the trustees’ conduct, which was clearly hostile in nature.The Claimant’s Attempts to Displace the usual Costs RulePartial SuccessThe Claimant’s argument regarding partial success was based on the fact that he had succeeded in achieving a change in the composition of the directors of the trust companies. However, this argument was swiftly dismissed by the Court. Master Brightwell referenced earlier correspondence from the Claimant’s solicitors, which indicated that the appointment of a fourth director did not have any significant value or impact on the administration of the trust. As such, the partial success argument did not carry any weight. The application of an issue based order was dismissed, on the grounds that the Court must also be able to identify, at least in broad brush or in general terms, a part or proportion of the costs of the unsuccessful party which were incurred because of the unreasonable conduct which is complained about.Conduct of the PartiesThe Claimant also sought to challenge the Defendants’ conduct during the litigation. Specifically, he argued that the trustees had acted unreasonably by vigorously defending the allegations made against them, despite suggestions that they were open to stepping down or being removed from their positions. He also pointed to the fact that the trustees did not personally attend a settlement meeting, implying a lack of engagement.However, the Court rejected these submissions. Master Brightwell noted that in beneficiary disputes, where allegations of misconduct are dismissed, the general costs rule is the starting point. Had the allegations been substantiated, the situation would have been different. There would have been strong arguments in favour of the trustees losing their indemnity from the trust assets and possibly being required to pay the Claimant’s costs. However, as the allegations were not proven, the trustees were entitled to defend themselves fully, and no misconduct was found.Quantum and the Claimant’s Procedural ChallengesIn addition to the issues of partial success and conduct, the Claimant raised concerns about the quantum of costs. Specifically, he questioned the fairness of the costs given that the claim had been brought under the Part 8 procedure, which did not involve the cross-examination of witnesses. The Judge noted that these concerns were a matter for detailed assessment rather than something that should automatically reduce the costs. Consequently, the Claimant was ordered to pay the Defendants’ costs on the standard basis, to be assessed if not agreed.Indemnity from Trust AssetsThe judgment also addressed the issue of indemnity for the trustees. Master Brightwell confirmed that, to the extent the costs were not recovered from the Claimant (whether due to an assessment down or non-recovery), the trustees were entitled to an indemnity from the trust assets. This was to be given effect by the trustees having their costs assessed on the indemnity basis, ensuring that they could recover their legal fees from the trust fund.Key Takeaways for Trust Litigation and CostsCosts in Beneficiary Disputes: In beneficiary disputes, the general rule is that costs will follow the event. Even if a Claimant achieves some minor or peripheral benefit from the litigation, unless that translates into substantive relief, they are likely to bear the costs of the successful parties.No Leniency for Conduct: A party’s conduct during proceedings will rarely alter the costs order unless there is clear misconduct. Trustees defending claims against them are entitled to act robustly without the risk of bearing the costs, provided their actions are not unreasonable.Indemnity for Trustees: Trustees who successfully defend claims will usually be indemnified from the trust fund for their costs, provided they act in good faith. This indemnity ensures that trustees are not financially burdened by their legal fees when defending their position in the trust.Cost Assessments: Even if a Claimant challenges the quantum of costs, this will be dealt with at the assessment stage, not as a reduction in costs as a matter of principle.Issue Based Costs Orders: Parties seeking issue based costs orders, must be prepared to substantiate their arguments, so the Court can make an informed decision.The case highlights the importance of understanding the nuanced rules surrounding costs in trust litigation, especially for beneficiaries considering challenging trustees. The default position remains clear: losing a claim means paying the costs, and partial success or the conduct of the parties is unlikely to alter that outcome unless specific conditions are met.Daniel Murray is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com;Network & Infrastructure
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