Kerry Underwood

Archive for June 2019

SWITCH FROM LEGAL AID TO CONDITIONAL FEE AGREEMENT UNREASONABLE EVEN WHERE SIMMONS v CASTLE UPLIFT NOT IN PLAY

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

XDE v North Middlesex University Hospital Trust [2019] EWHC 1482 (QB) (12 June 2019)

the Queen’s Bench Division held that it was unreasonable for a claimant in a clinical negligence case to switch funding from legal aid to a Conditional Fee Agreement, even where the Simmons v Castle uplift was not in play, and upheld the Master’s decision to disallow recovery of the success fee and after the insurance premium.

Here the legal aid certificate had a costs limit of £55,480 at the prescribed legal aid hourly rates of £70 for a solicitor, £50 for junior counsel and £90 for senior counsel.

The claimant’s solicitors applied for an increase of the total, but that was refused unless and until the solicitors prepared a report dealing with various matters raised by the Legal Services Commission.

The claimants had the legal aid certificate discharged and switched to a Conditional Fee Agreement.

This case differed from ones such as

Surrey v Barnet and Chase Farm Hospitals Trust and others [2018] 1 WLR 5831

in that the Conditional Fee Agreement was entered into in October 2012, that is before the 10% damages uplift was announced in the case of Simmons v Castle, so the loss of that uplift caused by entering into a pre – 1 April 2013 Conditional Fee Agreement, could not be a factor, as it was in Surrey and other cases.

Nevertheless, the switch was held to be unreasonable.

By accepting a legal aid contract the claimant’s solicitors were bound by the rules of the Legal Services Commission and those rules included keeping the case within the legal aid budget and failure to do so did not justify a switch to a Conditional Fee Agreement.

The solicitors also failed to make a properly constituted application in time for an increase in the budget.

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Written by kerryunderwood

June 28, 2019 at 8:32 am

Posted in Uncategorized

FIXED COSTS: NO ESCAPE

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

 

In

Hammond v SIG plc & Subsidiary Companie [2019] EWHC B7 (Costs)

the Master held that where a matter was started in one of the portals and subsequently resolved by the claimant accepting a defendant’s Part 36 offer of £36,500, the claimant was entitled to fixed costs, and not standard basis costs.

Although the decision was only given on 11 June 2019, the hearing took place on 12 March 2019, before the decision in

Ferri v Gill [2019] EWHC 952 (QB) ,

but in a postscript to this judgment, the Master said that his decision was consistent with Ferri v Gill, which had held that the exceptional circumstances provision was a “high bar”.

Here, the claimant had sent a Letter of Claim to the defendant stating that she would not be submitting the claim via the portal, due to its value, but did subsequently submit the claim on the portal at the request of the defendant insurance company.

Liability was not admitted and so the matter exited the portal and the claimant issued Part 7 proceedings and a defence was filed and subsequently the claimant accepted the defendant’s Part 36 offer of £36,500.

The claimant argued that she was entitled to costs on the standard basis as she had started her claim by way of a Letter of Claim and had not started it on the portal, albeit that she had subsequently lodged it on the portal.

In the alternative, the claimant argued exceptional circumstances under CPR 45.29J.

The Master held that a Letter of Claim was not sufficient to start a claim; if that were the case then all claimants could avoid fixed costs by sending a Letter of Claim before submitting the claim on the portal.

In any event fixed costs apply to cases which “no longer continue” in the portal, irrespective of where they started.

The facts did not amount to exceptional circumstances under CPR 45.29J.

Interestingly, both counsel, including the successful counsel Sarah Robson –  an expert in this field – could only trace one case where exceptional circumstances under CPR 45.29J were held to apply, and that was a first instance decision of a District Judge in a claim which had started in the portal, but settled for £350,000.

 

Please also see my blog –

ESCAPING FIXED COSTS: FOUR NEW CASES

Written by kerryunderwood

June 27, 2019 at 7:59 am

Posted in Uncategorized

JUDICIAL REVIEWS: NO ORAL HEARING RE APPEAL LAWFUL

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

 

But Court Of Appeal Suggests Courts And Tribunals (Online Procedure) Bill Is Unlawful

In

Siddiqui, R (on the application of) v Lord Chancellor and others [2019] EWCA Civ 1040 (10 May 2019)

the Court of Appeal was considering the lawfulness of the change to the Civil Procedure Rules in 2016 which removed the right to an oral hearing for people seeking permission to appeal to the Court of Appeal against a refusal of permission to apply for judicial review.

The procedure now is that when permission is sought from the Court of Appeal to appeal against a refusal of permission to apply for judicial review, the Court of Appeal may refuse leave to appeal on the papers, without the appellant having the right to have that decision reconsidered at an oral hearing.

Here, the Court of Appeal itself conducting an oral hearing in relation to leave to appeal against refusal of permission to apply for judicial review, accepted that there were likely to be some cases in which permission to appeal was refused on the papers, but where permission would have been granted if an oral hearing had taken place and that in some of those cases the appeal would ultimately have been successful.

The issue here was whether the change in the appeals procedure, brought about by an amendment of CPR 52.5, which prevented such cases from proceeding, was incompatible with Article 6 of the European Convention on Human Rights, or with the common law right of access to justice.

The changes were introduced, not because anyone thought there was any merit in them, but rather to reduce the increasing workload of the Court of Appeal which was leading to significant delays in that court.

Here, the Court of Appeal Judge held that those delays caused injustice and therefore a balance had to be struck between the rule change and the need to reduce delays.

The court said that whilst everyone was entitled to a fair trial, including a fair hearing of an appeal, the case law of the European Court of Human Rights showed that this did not mean that an oral hearing was required at every contested stage of civil proceedings.

The court considered that it was a legitimate and proportionate rule change and therefore was not incompatible with Article 6, nor with the common law right of access to justice.

Consequently the judge dismissed the application for leave to appeal to the full Court of Appeal.

Even before 2016 there was not an absolute right to an oral hearing; if, on the papers, the judge had stated the application to be “totally without merit” there was no right to have that refusal reconsidered at an oral hearing.

The new CPR 52.5(1) removed the right to an oral hearing, providing that where an application for permission to appeal is made to the Court of Appeal, the Court of Appeal will determine the application on paper without an oral hearing except as provided for under paragraph (2) which reads:

“(2) The judge considering the application on paper may direct that the application be determined at an oral hearing, and must so direct if the judge is of the opinion that the application cannot be fairly determined on paper without an oral hearing.”

CPR 52.8 provides that if the single judge considers that there is merit in the application that judge, instead of granting permission to appeal, can decide the matter by granting permission to apply for judicial review so that the matter goes to a hearing at first instance, rather than going to a substantive appeal which might then lead to a reference back to the court of first instance.

One of the points made by counsel for the applicant was that the rule change had been made partly because of complaints by users of the Commercial Court in the delay in appeals being heard from that court by the Court of Appeal, and that very many of the litigants in the Commercial Court are foreign, with neither party having any connection with England and Wales.

Consequently applicants for judicial review were being denied justice for the convenience of commercial litigants who have no connection with this jurisdiction.

This is an increasingly important issue, given the fact that the domestic criminal and County Court systems are close to collapse.

Interestingly, given the highly controversial proposal to have lower value claims decided online, currently proceeding through Parliament in the Courts and Tribunals (Online Procedure) Bill, the Court of Appeal here said:

“The position as to an oral hearing at first instance, as it seems to me, is likely to be materially different.”

That comment was not necessary in relation to this case, as there had been a full oral hearing at first instance in the original application for permission to apply for judicial review.

Here, the Court of Appeal had considered the common law right of access to justice and considered the Employment Tribunal fees case of

 R (Unison) v Lord Chancellor [2017] UKSC 51 .

As everyone is entitled to an oral hearing at first instance at present,  the only reason for this statement can be a warning by the Court of Appeal to the government and Parliament that it may well find any restriction on oral hearings at first instance, as proposed in the Courts and Tribunals (Online Procedure) Bill, to be unlawful.

Significantly the court also quoted from

 R (Refugee Legal Centre) v SSHD [2005] 1 WLR 2219 

where the court said that the executive “is not entitled to sacrifice fairness on the altar of speed and convenience, much less of expediency, and whether it has done so is a matter for the courts.”

 

Watch this space.

Written by kerryunderwood

June 26, 2019 at 10:37 am

Posted in Uncategorized

SECURITY FOR COSTS: TWO NEW CASES

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

 

Substantial Obstacles To Enforcement Of Costs In Russia Justified Security For Costs

In

PJSC Tatneft v Bogolyubov and others [2019] EWHC 1400 (Comm) (5 June 2019)

the High Court of Justice Business and Property Courts of England and Wales Commercial Court(QBD) – a snappy title – ordered a claimant company incorporated in the Russian Federation, to provide security for the defendants’ costs under CPR 25.13(2)(a).

 

The Legal Basis for an Order for Security for Costs

 

CPR 25.13 provides, in part, as follows:

(1)  The court may make an order for security for costs under rule 25.12 if –

(a)  It is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and

(i)  one or more of the conditions in paragraph (2) applies

(2)  The conditions are –

(a)  the claimant is –

(i)  resident out of the jurisdiction; but

(ii)  not resident in a Brussels Contracting State, a State bound by the Lugano Convention, a State bound by the 2005 Hague Convention or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982 .”

 

As Tatneft is a Tatarstan company, Tatarstan being part of the Russian Federation, it was common ground that the condition in 25.13(2)(a) was met.

However, the court’s discretion must be exercised in a manner which is not discriminatory for the purposes of Articles 6 and 14 of the European Convention for the Protection of Human Rights and Fundamental Freedoms – see

Nasser v United Bank of Kuwait [2002] 1 WLR 1868.

The principles were set out in paragraphs 62 – 64 of that judgment, repeated here in paragraph 7.

The evidential threshold in such cases was set out in paragraphs 73, 77, 79 and 86 of the Court of Appeal’s judgment in

Bestfort Developments LLP v Ras Al Khaimah Investment Authority [2016] EWCA Civ 1099 

set out by the court here at paragraph 8.

Detailed guidance as to the jurisdiction to order security for costs was given by the Court of Appeal in

Danilina v Chernukhin [2018] EWHC 39 (Comm)

and the relevant parts of that judgment are set out by the court here at paragraphs 10 and 11 of its judgment.

The judge held that there was a real risk of substantial obstacles to enforcement in Russia satisfying the test in

Nasser v United Bank of Kuwait [2002] 1 WLR 1868.

This was based on:

(i) evidence of recent enforcement rates in Russia;

(ii) the absence of any enforcement treaty between the UK and Russia;

(iii) “a non-fanciful risk” that the issue of “reciprocity” ,the usual basis for enforcement of English judgments in Russia, might not be established in the context of a costs award in this case particularly as no case in which the English courts have enforced a Russian costs-only judgment had been identified;

(iv) a 2004 Russian Federation Information Letter stating that rulings of foreign courts on “interim measures”, such as costs orders, would not be recognised and enforced in Russia;

(v) a “non-fanciful” risk that a Russian enforcement court might apply the public policy exception under Arbitrazh Code, Art. 244(1) in an expansive way;

(vi) sanctions imposed by the Russian government, which contributed to the risk of non-enforcement of a costs order for public policy reasons there being a real risk that the defendant might become subject to sanctions; and

(vii) overall, points (iii) to (vi) each represented a real risk of substantial obstacles to enforcement and, in light of points (i) and (ii), the position was “clear”.

This conclusion conformed with Danilina v Chernukhin [2018] EWHC 39 (Comm).

The judge was not persuaded by the Russian Federation’s attempt to oppose the application, based on CPR 25.13(2)(a)(ii), on the basis that it had assets in Switzerland and Cyprus.

The judge did not accept that, if a non-Convention resident has assets within the CPR 25.13(2)(a) zone, in the absence of lack of probity, no security can be ordered referring to

Texuna International Ltd v Cairn Energy plc [2004] EWHC 1102 (Comm) (paragraphs 27 and 28).

Here, there was a real risk that the assets within the zone would not be available or sufficient, and the judge concluded that, where the Nasser condition was met, the Russian Federation was able to put up security and had not pointed to any possible prejudice; and the defendant would potentially be prejudiced without security, it was just to order security for the entirety of the defendant’s costs.

 

Security For Costs As Sanction

In

Alba Exotic Fruit Sh Pk v MSC Mediterranean Shipping Company S.A. [2019] 6 WLUK 77 (Comm) (3 June 2019)

the High Court of Justice Business and Property Courts of England and Wales London Circuit Commercial Court dismissed the defendant’s application to strike out the claim under CPR 3.4(2)(b) or (c),  and dismissed the defendant’s application for security for costs under CPR 25.12, but required the claimant to provide the defendant with security for costs by way of sanction for failing to apply to fix the Case Management Conference for four years and seven months.

Thus the court imposed security for costs as a sanction for a long delay in progressing proceedings, in circumstances where the judge acknowledged that an order for security was not justified under CPR 25.12.

Following service of the defence, the claimant should have applied to the court for a Case Management Conference within 14 days in accordance with Practice Direction 59.7.2.

However, it failed to do so and did not take substantive steps in the proceedings for nearly four years.

Following the claimant’s service of a notice of change of solicitor and an application to amend its Particulars of Claim, the defendant applied to strike out the claim, and for security for costs.

The High Court Judge considered that, although the claimant’s delay applying to fix the Case Management Conference was inordinate and inexcusable, it had not resulted in serious prejudice to the defendant, and did not mean that a fair trial was no longer possible.

The judge therefore refused to strike out the claim as an abuse of process under CPR 3.4(2)(b).

Following the guidance in

Walsham Chalet Park Ltd (t/a Dream Lodge Group) v Tallington Lakes Ltd [2014] EWCA Civ 1607,

regarding the application under CPR 3.4(2)(c), the judge applied CPR 3.9 to decide on a sanction for the claimant’s failure to comply with Practice Direction 59.7.2.

The judge emphasised the need for a proportionate response to the default, considering strike out to be too draconian where the defendant could have applied to fix the Case Management Conference itself, and where he had found that a fair trial was still possible.

Although the risk of the defendant being unable to enforce a costs award against the claimant, an Albanian company, was not sufficiently serious to justify an order for security for costs under CPR 25.12, it was a fair and proportionate sanction to impose for the claimant’s serious default, which had delayed and increased the costs of the litigation.

The judgment contains a detailed analysis of the law in relation to striking out, a sanction that the court declined to impose in this case.

Written by kerryunderwood

June 25, 2019 at 11:39 am

Posted in Uncategorized

LEGAL OMBUDSMAN: TIME TO SCRAP IT

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In December 2018 the Legal Ombudsman admitted that complaints about lawyers were taking six months even to be looked at.

In the previous year it missed its time targets every single month.

In its 2017/2018 Annual Report the Legal Ombudsman reported that it resolved just 9% of cases within 90 days, against its own – hardly demanding – target of 60%.

63% of cases were resolved within six months, against the target of 90%.

7% of cases were not resolved within a year.

The irony of a body that fines solicitors for performing vastly better than it does itself is beyond parody.

I have always strongly opposed the concept of Ombudsmen as they undermine the rule of law as people think it is part of the judicial system.

The Legal Ombudsman should be scrapped forthwith and £12.3 million that it costs each year should be spent on patching up the courts, which are literally falling apart – I mean the buildings and not the system – although that is as well.

Written by kerryunderwood

June 20, 2019 at 7:53 am

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THE STATE OF OUR COURTS: BY THE LORD CHIEF JUSTICE

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Extracts from Press Conference given by the Lord Chief Justice: Lord Burnett

“It really is not reasonable to expect court staff, judges or court users to attend court buildings which are in a terrible state: water coming through the ceilings for example; jurors having to wear hats and coats in the winter; lifts that do not work; air conditioning that does not work so that courts have to be stopped in the heat of the summer.”

 

“It is well known that there is a huge backlog in maintenance in the court estate, a huge backlog which, as I indicated when I gave evidence to the Justice Select Committee, will cost hundreds of millions of pounds to sort out, but it has to be sorted out because it is not reasonable to expect anybody operating in the system to operate in those sorts of conditions.”

 

“The total cost for Her Majesty’s Courts and Tribunal Service, including all judicial remuneration, in gross terms is about £1.7 billion a year. It nets down for various reasons to £1.6 billion and then much of it is paid for by fees of about £700 million a year. So the cost is actually rather less than a billion pounds a year, and that doesn’t take into account the other income that comes from what we do, but which we see nothing of I hasten to add, which is the income from fines and so on.”

 

“So the rule of law underpins everything that goes on in society, an efficient and functioning court service is absolutely crucial to stability and to prosperity and it’s interesting that if one looks around the world at the moment, there is an increasing recognition that a functioning, efficient court service which maintains the rule of law is absolutely vital for inward investment.”

Written by kerryunderwood

June 19, 2019 at 12:16 pm

Posted in Uncategorized

DEATH, PORTALS AND LITIGATION

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Hilton v Proudfoot and Another, Middlesbrough County Court, Claim No E03 YX 717, 15 April 2019

the court held that fixed costs do not apply to a claim where a person starts a claim in the portal but then dies, causing it to be excluded by virtue of Paragraph 4.5 of the Road Traffic Accident portal (Paragraph 4.3 of the Employers ‘Liability/Public Liability portal).

The same logic would apply to a situation where a claim is brought by someone who then loses capacity, or becomes bankrupt.

Paragraph 4.5 of the RTA portal provides:

“This Protocol does not apply to a claim—

(1) in respect of a breach of duty owed to a road user by a person who is not a road user;

(2) made to the MIB pursuant to the Untraced Drivers’ Agreement 2003 or any subsequent or supplementary Untraced Drivers’ Agreements;

(3) where the claimant or defendant acts as personal representative of a deceased person;

(4) where the claimant or defendant is a protected party as defined in rule 21.1(2);

(5) where the claimant is bankrupt; or

(6) where the defendant’s vehicle is registered outside the United Kingdom”

 

Paragraph 4.3 of the EL/PL portal is in similar terms:

 

“4.3  This Protocol does not apply to a claim—

(1) where the claimant or defendant acts as personal representative of a deceased person;

(2) where the claimant or defendant is a protected party as defined in rule 21.1(2);

(3) in the case of a public liability claim, where the defendant is an individual (‘individual’ does not include a defendant who is sued in their business capacity or in their capacity as an office holder);

(4) where the claimant is bankrupt;

(5) where the defendant is insolvent and there is no identifiable insurer;

(6) in the case of a disease claim, where there is more than one employer defendant;

(7) for personal injury arising from an accident or alleged breach of duty occurring outside England and Wales;

(8) for damages in relation to harm, abuse or neglect of or by children or vulnerable adults;

(9) which includes a claim for clinical negligence;

(10) for mesothelioma;

(11) for damages arising out of a road traffic accident (as defined in paragraph 1.1(16) of the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents).”

 

There is no authority on the point. The only former portal cases known to be excluded from fixed costs are those subsequently allocated to the multi-track – see Qader v ESure [2016] EWCA Civ 1109.

The judge observed that the portal expressly provides that it, and therefore fixed recoverable costs, should not apply to claims brought by the personal representatives, that is that they should not be subject to the “swings and roundabouts” of fixed costs cases.

This is presumably because of the potential additional complexity and expense of such claims.

The court also stated that it would be illogical if the applicable costs regime depended upon chance, that is whether the claim had been lodged the day before the injured person died, rather than just after.

While the deceased was the claimant in the portal, he was not the claimant in the Part 7 proceedings; that was the personal representative, who could not have brought the claim in the portal, due to Paragraph 4.5.

 

“35. Secondly, where the claimant in a Part 7 claim dies the claim cannot continue unless the personal representatives apply to the court for permission to amend the claim form and be added as a party. Although the cause of action survives after the injured party’s death it can only be pursued by the personal representatives if they become claimants pursuant to CPR 19.

36. I see no reason why the same logic should not apply to claims within the Protocol, namely that the claim cannot be pursued because the claimant is dead although the cause of action survives for the benefit of the estate. However, in contrast to CPR Pt.19 the Protocol contains no express mechanism for amending the claim to add or substitute an executor as claimant.

37. I consider that the defendant is right to point out that the claimant under the Protocol is the person starting the claim under the Protocol. However, in my judgment, that is precisely why the claim cannot continue under the Protocol, namely because MH is no longer able to pursue it. The only way that the surviving cause of action can be pursued is by a new claimant, the personal representative, who was not entitled to bring a claim under the Protocol.

38. Further, even if the CPR provisions on amendment are imported into the Protocol the doctrine of “relation back” would prevent the personal representatives being substituted for MH. If, on amendment, the claim is deemed to have been commenced by the personal representatives from the outset then such a claim cannot proceed under the Protocol by reason of 4.5.

39. Finally, if it is necessary to do so, I consider that a purposive construction should be applied to 4.5 such that it prevents personal representatives proceeding with Protocol claims after the claimant’s death in order to prevent the arbitrary costs consequences that would follow if the defendant’s submission was correct.

40. Therefore, I am satisfied that this is not a claim that has exited the Protocol. MH’s claim within the Protocol has effectively been stayed or otherwise terminated by his death. This claim by the personal representative is a fresh claim to enforce the same cause of action which could not be brought within the Protocol and therefore the FCR does not apply to it.

41. However, in my judgment it would plainly be unjust for costs to be awarded on the standard basis whilst MH’s claim was proceeding within the Protocol. At that stage there was nothing “out of the ordinary” about the claim and FRC represent the reasonable and proportionate costs for the work carried out at that stage.”

Consequently, the court ordered fixed recoverable costs up until the claimant’s death and standard costs thereafter.

I am grateful to Alex Littlefair of counsel, who represented the successful claimant, for information concerning this case.

 

Suing the Estate When Probate Is Not Taken Out

When someone wishes to sue the estate of a person who has died, then, if probate has been granted, it is the executors or administrators who must be sued, but, in relation to nearly half of deaths in the United Kingdom, probate is not taken out.

The Probate Service publishes a document which sets out the procedure for finding out whether a Grant of Probate or Letters of Administration has been granted.

The situation is governed by CPR 19.8(2) to (5) which reads as follows:

(2) Where a defendant against whom a claim could have been brought has died and –

(a) a grant of probate or administration has been made, the claim must be brought against the persons who are the personal representatives of the deceased;

(b) a grant of probate or administration has not been made –

(i) the claim must be brought against ‘the estate of’ the deceased; and

(ii) the claimant must apply to the court for an order appointing a person to represent the estate of the deceased in the claim.

(3) A claim shall be treated as having been brought against ‘the estate of’ the deceased in accordance with paragraph (2)(b)(i) where –

(a) the claim is brought against the ‘personal representatives’ of the deceased but a grant of probate or administration has not been made; or

(b) the person against whom the claim was brought was dead when the claim was started.

(4) Before making an order under this rule, the court may direct notice of the application to be given to any other person with an interest in the claim.

(5) Where an order has been made under paragraphs (1) or (2)(b)(ii) any judgment or order made or given in the claim is binding on the estate of the deceased.”

 

The rules do not say when the application should be made but obviously it must be made before service, and therefore it makes sense to apply when issuing.

There is then the issue of who that application should be served upon.

Generally, this will be the proposed representative of the estate, but if this cannot be agreed, or it is unclear who it should be, then the court will determine the representative for the estate.

Written by kerryunderwood

June 19, 2019 at 8:32 am

Posted in Uncategorized

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