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Removing bad executors
Most executors probably start out with the intention of carrying out their fiduciary responsibilities properly. But even with the best intentions, issues can arise that mean the executors (or administrators - the term "personal representatives" shall be used throughout) do not fulfil their role appropriately, they may even be causing damage to the estate, and so need to be replaced.
Sometimes these issues arise from incompetence or inertia. Or because the personal representatives are afflicted by a conflict of interest that renders them unable to act objectively. In extreme cases, the personal representatives may simply be dishonest.
The principal basis for an application to remove and replace personal representatives is to be found in section 50 of the Administration of Justice Act 1985 ('AJA 1985').
In those relatively rare instances, charities may have to act decisively, and at an appropriately early stage, to remove and replace personal representatives in order to prevent damage to their interest in the estate. This will often be a judgment call as to whether the estate is already being damaged, or on the way to being damaged, such that the time and cost involved in a removal action will ultimately produce a net benefit.
These notes summarise the court's jurisdiction to remove and replace personal representatives and how the relevant factors in such cases are applied by the courts in practice. There have been three notable removal cases in 2024 which demonstrate the court's increased tendency to remove executors where that is necessary to protect the assets of the estate and ensure the smooth completion of the estate administration.
The jurisdiction of the Court
The principal basis for an application to remove and replace personal representatives is to be found in section 50 of the Administration of Justice Act 1985 ('AJA 1985'). This confers a power on the court to replace executors or terminate their appointment where a grant of representation has already been obtained. The section states:
'Where an application relating to the estate of a deceased person is made to the High Court under this sub-section by or on behalf of a personal representative of the deceased or a beneficiary of the estate, the Court may in its discretion:
- appoint a person … to act as personal representative of the deceased in place of the existing personal representative or representatives of the deceased or any of them; or
- if there are two or more existing personal representatives of the deceased, terminate the appointment of one or more but not all of those persons.'
As it confers a broad discretion, the court must take into account a range of factors in making the decision to remove or replace. The relevant factors are discussed in more detail later.
There is also jurisdiction found in section 116 Supreme Court Act 1981 ('SCA 1981') which provides that:
'If by reason of any special circumstances it appears to the High Court to be necessary or expedient to appoint as administrator some person other than the person who, but for this section, would in accordance with probate rules have been entitled to the grant, the Court may in its discretion appoint as administrator such person as it thinks expedient.'
...the court has an inherent jurisdiction to remove personal representatives, which is often also referenced in any application for removal.
The wording in section 116 SCA 1981 makes clear that this applies where a grant has not yet issued. However, in the case of Goodman v Goodman [2013] it was confirmed that an application under section 50 AJA 1985 may also be made even before a grant has been issued. Under section 116 SCA 1981, there needs to be some "special circumstances" and for it to be "necessary or expedient" before the court will exercise its power under this section. Most applications (certainly contested ones) therefore proceed, and are determined under, section 50 of the AJA 1985 where the discretion conferred on the court appears to be broader.
It should also be noted that the court has an inherent jurisdiction to remove personal representatives, which is often also referenced in any application for removal.
It is sometimes the case that a Will establishes an ongoing trust, rather than giving beneficiaries an immediate outright interest. The personal representatives are often (but not always, and do not have to be) appointed as trustees of the ongoing trusts. In that situation, it would usually also be desirable to remove them in the capacity as trustees as well (on the principle that if they are unable to administer an estate properly, they are probably unlikely to administer the trust with any greater diligence).
Section 41 Trustee Act 1925 confers jurisdiction on the court to remove and replace trustees. It provides that:
'The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient difficult or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.'
Relevant factors in removal cases
The classic statement of the court's approach to removal applications is found in the leading 1884 Privy Council decision Letterstedt v Broers which stated that the 'main guide must be the welfare of the beneficiaries'. The Privy Council in Letterstedt also stated that:
'…friction or hostility between trustees and [beneficiaries] is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered…it is certainly not to be disregarded.'
The case now most commonly cited for its statement of the factors the court should consider is the decision of Chief Master Marsh in Harris v Earwicker [2015]. The six factors he outlined can be summarised as follows:
1. It is not necessary to find wrongdoing or fault on the part of the executor. The question for the court is whether the administration is being carried out properly, which can mean, is it being undertaken within a reasonable timeframe.
2. If wrongdoing or fault is identified, is it such as to endanger the estate? If it is minor, and will not affect the administration, then it may not be enough to justify removal.
3. The wishes of the testator/trix, and who they have chosen as executor(s) will be taken into account. There may be specific reasons for people to have been selected and therefore to remain as personal representatives.
4. The wishes of the beneficiaries will also be a relevant but they have no right to demand replacement and so their wishes are not determinative.
5. Absent wrongdoing or fault, the question is whether it has become impossible or difficult to complete the administration of the estate. The court will ask: what has been done and what is yet to be done in the estate administration. A breakdown of relationships may be a relevant factor, as stated in Letterstedt v Broers, but without more that will not of itself justify replacement. If the breakdown makes the task of completing the administration difficult or impossible then replacement may be necessary. This also involves looking at what is yet to be done – if the estate is almost administered then the court may consider that it is not appropriate to replace the personal representatives?
6. The additional cost of replacing, in particular if a professional is to be appointed in place of the existing personal representatives. The size of the estate and the scope of the work yet required will therefore be a relevant consideration.
As to how the above factors have been applied and restated by the court in previous cases, in Long v Rodman [2019] Chief Master Marsh said that:
An obvious example where personal representatives may need to be removed is where they act in their own personal interest at the expense of the estate. For example, in Cockerham v Cockerham [2019], two brothers were executors of their mother's estate. One lived abroad, the other moved into their mother's property which he wanted to buy at discount. He was replaced by a solicitor. In recent years we issued proceedings and successfully removed an executor who had intimated a claim for over £300,000 against the estate in respect of carer costs and had already paid himself just over £75,000 (amounting to all the remaining cash in the estate) as well as moving into the property and charging the council tax to the estate. The executor was ultimately held personally liable for the costs of the proceedings.
An obvious example where personal representatives may need to be removed is where they act in their own personal interest at the expense of the estate.
In contrast, Kershaw v Micklethwaite [2010], was a case where the unhappy beneficiary had a litany of complaints, but the Judge felt that although 'things could have been handled better in certain particular respects' those failings were simply not significant enough to justify removal.
In King v Ellis [2019] a sister sought remove her brother alleging hostility, failure to generate income from a vacant property, and failure to collect in debts from a third sibling. In respect of the debts, the test was not whether the third sibling had properly accounted for the sums but whether the executor had made proper enquiries. The judge found that he had 'properly investigated and came to appropriate conclusions'.
In Richmond v WAG Davidson [2020] Master Kaye said of the fact that the solicitors had been named as executor:
'Whilst Mrs Shoulman's choice of executor is relevant, it is not determinative and carries far less weight if the reasons for the appointment are unknown and where, as here, it is clear little time was spent considering the appointment.'
As to the wishes of the beneficiaries, in Long v Rodman Chief Master Marsh said that it would be wrong to draw the conclusion that the wishes of beneficiaries will always be a very powerful factor, but that:
'Where beneficiaries are able to make out complaints that warrant further investigation, the continued tenure of the [executor] becomes untenable unless the complaints are trivial.'
'the unanimous views of the beneficiaries is important where the primary test is their welfare… if all the beneficiaries in an estate want the executor to renounce, it is a very powerful factor…'
Notable cases in 2024
In each of the three cases highlighted below, the personal representatives were successfully removed. They illustrate the court's inclination to change the identity of the personal representatives where the parties are clearly at odds with each other and this is impacting negatively, or will do so, on the estate administration.
In Connell v Connell [2024], the deceased's husband and two sons were named as executors. One of the sons, Timothy, had a strained relationship with his father and sibling, and filed a caveat intimating a challenge to the Will under which he had been appointed executor.
When it comes to determining costs, the usual order is that costs follow the event.
The caveat was ultimately withdrawn but the issues remaining in contention largely concerned allegations made by Timothy in respect of the financial mismanagement of the deceased's estate by the father and other son. The estate was not particularly complex, consisting of just the family home and some financial investments.
Timothy was removed as executor leaving the husband and brother in place, but an independent professional was appointed in place of Timothy to ensure the proper administration of the estate going forward. The court accepted there was some concern over the accounting of the estate administration and ordered that updated estate accounts be prepared. Allowing for the appointment of an independent professional was intended to ensure compliance with proper estate accounting and also so that Timothy could be satisfied that someone would be taking into account his interests as beneficiary.
In Fawcett v Dolo [2024], the personal representatives were the two children of the deceased who were also the only beneficiaries of the estate. The administration of the estate appeared to start out smoothly before one of the personal representatives fell ill. Once they had recovered, they began to raise questions over what the other had been doing in relation to certain assets, in particular a time-share investment owned by the deceased, and relations then swiftly broke down. A key factor that Master Brightwell considered justified the removal of one of the personal representatives was delay –"the delay, which I do consider to have been caused by the defendant, is a significant one [the deceased passed away in April 2022]". But also, the defendant made serious allegations against their co-personal representative and the firm of solicitors they had engaged. Master Brightwell was concerned that even on the basis of the defendant's conduct in the proceedings and at trial, they seemed unable to work constructively with their sibling. Accordingly, both personal representatives were replaced with an independent administrator (whom the claimant had suggested as an alternative to them acting alone).
In Waite v Skilton [2024], there were a number of issues of construction over the Will which needed to be resolved in order to be clear on the beneficial interests and powers of the executors. The deceased's solicitors had been appointed as personal representatives alongside certain family members and a family friend.
One of the executors, Mr Skilton, was found to have taken items of property from the deceased before she passed away. There were also disputes over certain lifetime property transactions. The solicitors recognised the difficult position they were in and sought to step down in place of independent personal representatives. One of the family members and the family friend felt that they should continue as personal representatives as they had been chosen by the deceased. The court said "the administration of the estate has been lamentable. Nearly six years after the deceased's death…little has been done. There are criticisms made of [the firm of solicitors whose partners were acting as personal representatives]…. These are not in my judgment so serious as of themselves to justify removal of the firm. However, since the firm wishes to be removed in any event, this does not need to be considered further".
As to the family members who were appointed as personal representatives, their continuation in office would likely perpetuate the property disputes. If they did not remain, the rationale for the family friend to remain as a neutral foil to the family members fell away. The outcome was that all personal representatives were removed in place of an independent professional administrator.
It is notable that in two of the cases mentioned above, the personal representatives (who were removed) were family members or close acquaintances of the deceased and chose to act as litigants in person in the proceedings without formal legal representation. But as Waite v Skilton demonstrates, choosing professionals to act as personal representatives at the outset is not necessarily a cure-all if they had some prior involvement in the deceased's affairs and are caught in the cross-fire of disputes over the assets of the estate.
Process and costs
The application to remove personal representatives is made under the more stream-lined Part 8 procedure in the High Court (rather than Part 7 which most civil litigation is brought under). This means a claim form and witness statement is required rather than formal pleaded particulars of claim, with a phase for document disclosure and then a trial with live witnesses.
It is considered unusual in Part 8 claims for cross examination to take place because it is not necessary to prove disputed facts but just establish that there is a good arguable case or a complaint which is more than trivial. For that reason, removal applications have been described as 'quite unlike ordinary inter partes litigation'. It means hearings should not usually be more than a day meaning that the costs of removal applications are likely to be less than costs for claims against executors.
The challenge is making the judgment call in identifying issues in the estate administration, or signs of issues to come, that justify replacing the personal representatives to improve the estate administration.
That said, there are instances where, even though the claim is commenced under the Part 8 procedure, the court considers it necessary for there to give some directions for specific disclosure and/or to have a trial with live witnesses (which inevitably increases the length and cost of the proceedings).
When it comes to determining costs, the usual order is that costs follow the event. In other words the loser pays. So in the majority of instances, where the arguable case has been made out and the personal representatives are removed, it is likely that they are going to be ordered to pay the costs.
Personal representatives are therefore in a vulnerable situation when faced with a removal claim. It is a relatively low hurdle to establish that they should be removed (if, as is typically the case) the administration is not progressing as it should. They may be removed without having committed any wrongdoing, but the fact of resisting removal rather than acquiescing may well mean they are penalised in costs.
The court has a broad discretion in costs and may allow the personal representatives to recover their costs from the estate in part (for particular issues or up to a certain point in the proceedings) using their existing right of indemnity from the estate assets.
Conclusion and practical issues
Where an estate is not being progressed and/or there is good reason to be concerned about the conduct of the personal representatives, this would likely give prima facie grounds for their removal and replacement. It is not necessary to prove fault in order to succeed in an application to remove.
The challenge is making the judgment call in identifying issues in the estate administration, or signs of issues to come, that justify replacing the personal representatives to improve the estate administration. Often, with the benefit of hindsight, once the damage (or even delay) has occurred in the estate administration, it is possible to identify an earlier point in time when removal of the personal representatives would have been the better option.
If sufficient grounds for concern are made out and executors resist removal, they are at serious risk of personal liability for costs.
The correspondence sent in advance of making an application can be important in shaping the court's approach – care should be taken from the outset to strike a reasoned tone. Too much hostility too early from the beneficiaries might risk losing the sympathy of the court.
Key contact
Steven Kempster
Partner | London