Dealing with problem executors

three wooden figures, one remains in enclosed boxWhen is the removal of executors necessary? Robert Horsey explains.

Issues that arise surprisingly often in the administration of an estate relate to the suitability and performance (or lack of) of the executors or administrators. In such cases, the parties may wish to consider the removal of the person concerned to allow for the effective administration of the deceased's estate.

Loss of confidence and trust between executors

The most common situation is a breakdown in trust and confidence between the executor and another executor and/or a beneficiary of the will.

It is possible for a beneficiary (or indeed another executor) to remove or substitute executors before they have taken a grant under section 116 of the Senior Courts Act 1981. The alternative jurisdiction (which applies pre- and post-grant) is under section 50 of the Administration of Justice Act 1985, to have the offending executor removed or replaced. In both cases, the basic principle sallied by the court in determining whether or not to exercise the discretion to remove is the same.

The fact that the executors were chosen by the testator will always be important, but the court's overriding considerations are the welfare of the beneficiaries, and whether the estate is being properly administered. The key practical question for the court is therefore whether the executor's continued involvement in that role will impede the administration of the estate.

Will the hostility affect the administration of the estate?

The courts have previously held that hostility between executors, or between executors and beneficiaries, will not be enough of a reason for removal on its own. This was restated in the 2018 case of Haynes v Andre [2018] EWHC 489 (Ch), where the court confirmed that there must be a material risk that the hostility will adversely affect the administration of the estate.

In another 2018 case, Nwosu v Nwosu [2018] EWHC 1520 (Ch), the court was prepared to exercise its discretion to remove the executors and appoint an independent third party. In that case, the administration of what was a relatively straightforward estate had been ongoing for over five years, and the executors could not agree how to proceed, so the estate was, in effect, in deadlock. The court concluded that the only way to effectively move forward was to have the conflicting executors removed and a third party substituted in their place.

Applications for removal

Applications to remove a personal representative can be protracted, and legal costs of a contested matter can run to many tens of thousands of pounds. In contrast, if dealt with by consent, the application can be dealt with by the courts on the papers alone in short order and at minimal cost.

Examples of cases where removal might be sought could range from a practical need for a change of executors on health grounds, to fiercely contested situations between family members involving allegations of conflicts of interest and criminal behaviour.

Conflicts of interest

A recent, unreported case in the High Court in Cardiff involved a dispute among the deceased's four siblings, two of which (the two defendants) had been appointed as executors.

The two claimant siblings sought the removal of the defendants and their replacement by a solicitor in a third party solicitor firm. The grounds for the application were that:

  • There was a conflict of interest between the defendants acting as executors, and their actions in the deceased's lifetime as attorneys (which required investigation on behalf of the estate).
  • That one of the defendant’s highly aggressive and confrontational conduct – to a range of public authorities, including the police and the judiciary, as well as to his siblings – and use of the most obscene and threatening language, showed that the defendants' continued involvement as executors risked impeding the proper administration of the estate. 

The court was satisfied that the defendants should be removed, and appointed the replacement independent professional executor in their place.

This case also included an option that is occasionally overlooked: the appointment of the replacement personal representative as a judicial trustee. Consideration should be given to the appointment of the replacement as a judicial trustee where the estate is (or may be) complicated, because a judicial trustee can make informal applications to the court for directions that can simplify the administration and avoid the need for the making of formal applications back to court each time the court's assistance is required.

If agreement can’t be achieved

In conclusion, in an ideal world, when problems arise in connection with the actions or omissions of a personal representative, the parties would reach agreement, so that any subsequent action can be taken by consent.

However, where consensus can’t be achieved, there is no substitute for seeking legal advice at an early stage, so that appropriate action is taken to minimise costs and ensure the effective conclusion of the administration of the estate.

About the author

Robert Horsey is a partner at Ashfords@Ashfords_Law.

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