Practice Directions

Practice Statement - RSC Order 85 - Applications to the court in relation to the administration of a trust - prospective costs orders

1. This Practice Statement is about the costs of applications by trustees, or beneficiaries, or other persons concerned, in relation to the administration of a trust including questions of construction, questions relating to the exercise of powers conferred by the trust, or questions as to the validity of the trust.
2. Where trustees have power to agree to pay the costs of some other party to such an application, and exercise properly such a power, Rule 48.3 applies. In such a case, an order is not required and the trustees are entitled to recover out of the trust fund any costs which they pay pursuant to the agreement made in the exercise of such power.
3. Where the trustees do not have, or decide not to exercise, a power to make such an agreement, the trustees or the party concerned may apply to the court at any stage of proceedings for an order that the costs of any party to the application referred to in paragraph 1 above (including the costs of the trustees) shall be paid out of the fund (a "prospective costs order").
4. The court, on an application for a prospective costs order, may

   (a) in the case of the trustees' costs, authorise the trustees to raise and meet such costs out of the fund;

   (b) in the case of the costs of any other party, authorise or direct the trustees to pay such costs (or any part of them, or the costs incurred up to a particular time) out of the trust fund to be assessed, if not agreed by the trustees, on the indemnity basis or, if the court directs, on the standard basis, and to make payments from time to time on account of such costs. A model form of order is set out at the end of this Practice Direction.

5. The court will always consider whether it is possible to deal with the application for a prospective costs order on paper without a hearing and in an ordinary case would expect to be able to do so. The trustees must consider whether a hearing is needed for any reason. If they consider that it is they should say so and explain why in their evidence. If any party to the application referred to in paragraph 1 above (or any other person interested in the trust fund) considers that a hearing is necessary (for instance because he wishes to oppose the making of a prospective costs order) this should be stated, and the reasons explained, in his evidence, if any, or otherwise in a letter to the court.
6. If the court would be minded to refuse the application on a consideration of the papers alone, the parties will be notified and given the opportunity, within a stated time, to ask for a hearing.
7. The evidence in support of an application for a prospective costs order should be given by witness statement. The trustees and the applicant (if different) must ensure full disclosure of the relevant matters to show that the case is one which falls within the category of case where a prospective costs order can properly be made.
8. The model form of order is designed for use in the more straightforward cases, where a question needs to be determined which has arisen in the administration of the trust, whether the claimants are the trustees or a beneficiary. The form may be adapted for use in less straightforward cases, in particular where the proceedings are hostile, but special factors may also have to be reflected in the terms of the order in such a case.

Issued by direction of the Vice-Chancellor
Date: 1st May, 2001

^ Top

UPON THE APPLICATION, etc
AND UPON HEARING, etc
AND UPON READING, etc

AND UPON the Solicitors for the …………. Defendant undertaking to make the repayments mentioned in paragraph 2 below in the circumstances there mentioned

IT IS [BY CONSENT] ORDERED THAT:

1. The Claimants as trustees of ……………………… ("the [Settlement/Scheme]") do
   
   (a) pay from the assets of the [Settlement/Scheme] the costs of and incidental to these proceedings incurred by the …………… Defendant such costs to be subject to a detailed assessment on the indemnity basis if not agreed and (for the avoidance of doubt) to (i) include costs incurred by the ……………. Defendant from and after [date] in anticipation of being appointed to represent any class of persons presently or formerly beneficially interested under the trusts of the [Settlement/Scheme] irrespective of whether [he/she] is in fact so appointed; and

   (ii) exclude (in the absence of any further order) costs incurred in prosecuting any Part 20 claim or any appeal

   (b) indemnify the ……………… Defendant in respect of any costs which he may be ordered to pay to any other party to these proceedings in connection therewith
   
   
2. Until the outcome of the detailed assessment (or the agreement regarding costs) contemplated in paragraph 1 above, the Claimants as trustees do pay from the assets of the [Settlement/Scheme] to the Solicitors for the ……………. Defendant monthly (or at such other intervals as may be agreed) such sums on account of the costs referred to in paragraph 1(a) of this Order as the Solicitors for the …………… Defendant shall certify

   (i) to have been reasonably and properly incurred and not to exceed such amount as is likely in their opinion to be allowed on a detailed assessment on the indemnity basis; and

   (ii) to have accrued on account of the present proceedings in the period prior to the date of such certificate and not to have been previously provided for under this Order

PROVIDED ALWAYS that the Solicitors for the …………… Defendant shall repay such sums (if any) as, having been paid to them on account, are disallowed on a detailed assessment or are otherwise agreed to be repaid and any such sums shall be repaid together with interest at 1% above the base rate for the time being of [Barclays] Bank plc from and including the date of payment to those Solicitors up to and including the date of repayment, such interest to accrue daily

1. Any party may apply to vary or discharge paragraphs 1 and 2 of this Order but only in respect of costs to be incurred after the date of such application

   Note: this form of order assumes that the trustees are the Claimants. If, in an appropriate case, the Claimant is a beneficiary and the trustees are Defendants, references to the parties need to be adapted accordingly.

Note: this form of order assumes that the trustees are the Claimants. If, in an appropriate case, the Claimant is a beneficiary and the trustees are Defendants, references to the parties need to be adapted accordingly.