Badly Drafted Wills

solicitorsjournal 18 December 2012 Vol 156 No 48

www.solicitorsjournal.com

Badly drafted wills Time to rectify the law?

Anger over whiplash small claims plan Legal expenses insurer becomes ABS Sampson backs single conveyancing quality scheme updates OFC_SJ_Dec 18th.indd 1

charity

children

12/14/2012 11:50:22 AM

cover story wills

Rewarding the negligent and punishing the diligent Kevin Shannon considers the inherent unfairness in the current law of governing rectification of badly drafted wills

W

ills have always been an unjustified anomaly in the field of rectification. Until the passing of section 20 of the Administration of Justice Act 1982 they were the only type of document which could not be rectified, no matter how strong the evidence or how unfair the result. The 1982 Act sought to remedy this but only managed to change the law from a harsh bright line rule to the illogical and unfair rule that exists today.

Section 20(1) of the 1982 Act states that: “If a court is satisfied that a will is so expressed that it fails to carry out the testator’s intentions, in consequence – (a) of a clerical error; or (b) of a failure to understand his instructions, it may order that the will shall be rectified so as to carry out his intentions.”

The problem with section 20 is that it provides no assistance when a testator (or his solicitor if one is used) makes a mistake as to the legal effect of the words used and thereby produces an unintended result using the intended words. For example, if the testator (or his solicitor) uses certain words believing they confer a benefit on X but they actually confer a benefit on Y then no matter how overwhelmingly conclusive the evidence is of this mistake no rectification is possible.

The capriciousness of this rule is shown through the example of an elderly testator who instructs a solicitor to draft a will which leaves a house to Y subject to X’s life interest. The solicitor drafts a will which he says reflects this. The testator, slightly intimidated by the formal language in the will but comforted by his solicitor’s assurances, signs the will. Unfortunately in reality the words used leave the house to X

12 SJ 156/48 18 December 2012

p12 & p13_SJ_Dec 18th.indd 12

absolutely. If the wrong words were used because the solicitor made a transcribing error rectification is allowed. If they were used because the solicitor misunderstood the testator’s instructions rectification is allowed. But if they were used because the solicitor misunderstood the law, no rectification is allowed.

In all three situations the words in the will, the testator’s intentions and the testator’s actions are the same but the current rule means that in the third situation X receives an unjustified windfall and Y is unfairly disappointed.

Rectification of wills therefore remains in stark contrast to rectification of all other documents. A mistake as to a clause’s legal effect in any other document can be rectified. Even a mistake as to the legal effect of a clause in a unilateral settlement where the settlor has since died can be rectified, but if the same mistake is made in a will there can be no rectification.

Cause of the problem Ironically this problem was probably caused by a misunderstanding of the law.

The Law Reform Committee’s 1973 Report on the Interpretation of Wills was the motivation behind section 20. It concluded that rectification should be available in the case of clerical errors and misunderstanding of the testator’s instructions but not in the case of failure to appreciate the effect of the words used. The LRC stated that this “would correspond to the application of the doctrine [of rectification] to other instruments”. Unfortunately this was incorrect as it was subsequently confirmed in Re Butlin’s Settlement Trusts [1976] Ch 251 (in the context of rectifying a settlement) that: “Rectification… is also available where

www.solicitorsjournal.com

12/14/2012 1:07:44 PM

cover story wills the words of the document were purposely used but it was mistakenly considered that they bore a different meaning from their correct meaning as a matter of true construction.”

This misunderstanding was either ignored or not noticed by those enacting the 1982 Act resulting in the current situation where if a testator makes the same mistake as to the legal effect of words in a will and words in a settlement one can be rectified but the other cannot.

Judicial gymnastics The restrictive nature of section 20 has led to it being construed far broader than is justifiable. The most important example is in Re Segelman [1995] 1 All ER 676 where ‘clerical error’ was held to cover the

unanimous in agreeing that, even after its extension, section 20 still does not allow rectification for a mistake as to the legal effect of words used in a will.

The problem with the current law as regards testator-drafted wills is relatively simple. If a testator makes a mistake as to the legal consequences of words used then, no matter how convincing the proof is, no rectification is possible and the testator’s intention must be ignored.

As regards solicitor-drafted wills the problems are more numerous. Firstly, there is the possibility (as above) that the testator’s intention is ignored and an unintended result obtained. Secondly, in Segelman the central reasoning was that if the draftsman had applied his mind to it he would have noticed the error and fixed

“If a testator makes a mistake as to the legal consequences of words used then, no matter how convincing the proof is, no rectification is possible and the testator’s intention must be ignored” situation where a will draftsman failed to apply his mind to the significance or effect of the provision used. While in Segelman the result undoubtedly accorded with the testator’s intention the judicial gymnastics needed to obtain it makes a mockery of rules of construction. The Concise Oxford English Dictionary defines clerical error as “a mistake in copying or writing out a document”. This is the ordinary (and in my view only) sense of these words. The LRC’s example of a clerical error was a testator intending to leave £1,000 but it being recorded as £100. That is a mistake in writing or recording a document and is rightly considered a clerical error. On the other hand, intending to write certain words and writing those words without any mistake is not a clerical error. It should not be somehow turned into one just because the draftsman did not consider the effect those words might have. However, according to Segelman and subsequent cases that is exactly what happens.

Practical problems There are obvious potential problems with judges, in effect, making new law as in Segelman rather than leaving this to the legislature. However, the real problem is that such actions do not go far enough.

Thus, all the leading practitioner texts are

www.solicitorsjournal.com

p12 & p13_SJ_Dec 18th.indd 13

it. However, some errors would be noticed by experienced solicitors but not by less experienced solicitors or lay people even if they had applied their minds to it. In these cases presumably no rectification could be granted. This means that in each case the draftsman’s education and experience must be investigated to decide whether rectification is allowed when, really, this should be an irrelevant factor.

Thirdly, it is ridiculous that whether rectification is allowed may turn, not on the testator’s intention or the words used in the will, but on the draftsman’s belief.

If a solicitor drafts a will and believes the words used accomplish the testator’s intention, but they do something different there is no rectification. However, if the same solicitor drafts the same will using the same words and has no belief as regards the words then rectification is allowed. This is an absurd situation.

This situation provides strong motivation for a solicitor draftsman to be dishonest when asked about drafting the will. If a solicitor drafts a will using a clause which he believes accomplishes the testator’s instructions but makes a mistake as to the legal effect of the clause, dishonesty might serve him better than honesty. If he honestly admits he made a mistake no rectification is possible and he will probably be sued

in negligence. However, if he dishonestly says he failed to apply his mind to the clause (and is believed) his liability will be minimal because the disappointed beneficiary must pursue rectification of the will prior to any negligence action.

Thus, the dishonest solicitor is let off while the honest one is punished.

A cynic might legitimately advise solicitors not to think too carefully when drafting a will. A completely diligent solicitor will carefully consider every provision in the will to make sure it accomplishes what it is intended to. If this diligent solicitor makes a mistake about the legal effect of a clause no rectification will be available and he may be liable in negligence for any losses.

However, if another (negligent) solicitor never properly considers the provisions he uses and makes an identical mistake rectification will be available and he will suffer no substantial negligence claim.

Thus, when it comes to will drafting, the current law rewards sustained negligence and punishes diligence.

The current law is illogical and unfair.

It needs to be changed to bring rectification of wills in line with rectification of all other documents as was (arguably at least) intended by the LRC in 1973.

Such a change would not result in a flood of claims as it would only allow rectification in the relatively rare cases where it is completely clear not only that the will does not reflect the testator’s intention but also what the testator’s intention really was.

Ideally this change would be statutory but as waiting for legislation can be a long process, the courts are likely to have the opportunity to rule on this matter long before any legislation is passed.

Given the illogical and unfair consequences of the current position, the right case and judge could be persuaded to face up to the problem and allow rectification where there has been a mistake as to the legal effect of words used.

The wording of section 20(1) and the unanimous statements of the law in the practitioner texts would mean it would undeniably be an uphill battle, but it is a battle which could certainly be won.

Kevin Shannon is a barrister at Ten Old Square, Lincolns Inn (www.tenoldsquare.com)

18 December 2012 SJ 156/48 13

12/14/2012 1:08:02 PM