The costs penalties of advancing, and then withdrawing, an allegation of fraud.
This judgment is essential reading for probate lawyers, litigation counsel, costs specialists, and family practitioners working on estate disputes. It highlights key lessons in litigation strategy—particularly when serious allegations like fraud are made. The case gives an insight into the court’s approach when fraud is pleaded without robust supporting evidence, and the significant cost sanctions that can be imposed. Any professional involved in pursuing a claim where fraud is alleged should take note to avoid unnecessary exposure to adverse costs rulings.
Background of the case:
The dispute emerged from a contested probate matter involving the widow of the deceased, acting on behalf of the Estate (the Claimant) and the deceased’s sister (the Defendant). A dispute arose as to the deceased’s estate. The Claimant argued that the deceased had died intestate, whilst the Defendant maintained that he had made two wills before he died, one in 2017, and one in 2022 by which she was appointed executrix. However, these documents could not be found, and the Claimant issued proceedings to determine the division of the estate. Within these proceedings, the Claimant alleged that the Defendant had fraudulently produced the two wills.
Subsequently, the Claimant acknowledged that she did not have the relevant supporting evidence and sought to amend the Reply by withdrawing the fraud allegation. Dispute arose regarding the costs of not only the application, but the work done to date in responding to the fraud allegation, and in the first instance, who should be liable for costs. Consideration was given as to whether the costs of the application should be reserved but it was accepted that this was not necessary. The Claimant sought either for her costs of the application, or at least no order for costs on the basis that the Defendant should have consented to the application earlier. However, the Defendant, a Litigant in Person, was served with the application on 14 December 2024 and this was issued on 23 December 2024, and the Court found the Defendant could not be criticised for seeking legal advice.
The Defendant sought her costs not only of the application, but costs relating to the work arguably thrown away as a result of withdrawing the pleading of fraud. However, the difficulty with this approach was that the claim was not concluded and therefore the Court was unable to make a finding on this point. The provisions of CPR 44.2 (2) (a) are such that the general rule is that unsuccessful party pays the costs of the successful party. Whilst the Defendant had been successful in the application, the overall outcome was not known.
On this basis, the Court made an order that the Claimant pay the Defendant’s costs of and occasioned by the application on the standard basis. The costs relating to the allegation of fraud would be dealt with at the end of the trial.
The key legal issue became whether she should bear the costs incurred in withdrawing such serious allegations and be subject to further cost consequences given the gravity and timing of her actions. The court had to decide not only whether the amendment application was justified, but whether it was cost‑effective and fair, emphasizing that fraud must be pleaded responsibly.
Summary and how this will affect the client:
The Court found that the Claimant’s conduct in alleging fraud was not reasonable and that to advance such allegations is a serious matter. Reference was made to Paragraphs 4.8 and 4.9 of the Chancery Guide where a party should not make allegations of fraud without credible material to support them. On this basis, the Claimant was ordered to pay the Defendant’s costs of and occasioned by the application. The Defendant’s broader request for costs was deferred to trial, balancing fairness and legal process.
The judgment clarifies key principles:
- Courts expect serious allegations to be backed by credible evidence at the time of drafting.
- Withdrawal or amendment of such allegations, even if in good faith, normally attracts a full cost order against the amending party.
- The timing and context of such actions matter—prompt withdrawal might be viewed more leniently but does not negate cost consequences.
This case is a powerful reminder that allegations of dishonesty or fraud, if inadequately prepared, can lead to expensive and avoidable penalties.
How can PIC assist?
PIC can assist with not only the potential liability for costs in terms of interlocutory applications, both in terms of scope and amount. We can offer specialist advice and, where rights of audience allow, attendance at Court. Our costs specialists are well versed in arguing issues of scope, proportionality, relevance to the matter and reasonableness. As can be seen from this matter, these arguments are highly nuanced and our assistance and advice can be invaluable in unpicking complex arguments.
Jackie Woods, Legal Costs Consultant & Team Leader
26.06.2025