Sometimes an individual who has an interest in an estate (i.e. a beneficiary), does not want or need to participate actively in the litigation. The application or action may name the individual as a respondent or defendant but not seek any relief against her. The individual may be named as a party in the litigation solely because she is a beneficiary and therefore has an interest in the estate.
Rule 75 of the Rules of Civil Procedure govern “contentious estate” proceedings. Rule 75.07.1 allows a person to file a “statement of submission of rights to the court” in response to a claim or on a motion or application for directions. By doing so, that person effectively takes herself out of active participation in the litigation. Certain entitlements are forfeited, such as notice of steps in the litigation (other than service of the trial date), and receiving a costs award. However there are possible benefits, such as not being liable for the costs of any party (except indirectly as may be ordered payable by the estate). Also important to know is that orders made during the litigation bind any person who has submitted her rights to the court.
If the litigation does not proceed to trial and is resolved out of court through a settlement, then r. 75.07.1(c) applies as follows:
Where a person files a statement of submission of rights to the court in response to service of a statement of claim or on a motion or application for directions,
(c) a judgment on consent following settlement shall not be given without,
(i) the written consent of the person, or
(ii) an affidavit of a lawyer of record in the proceeding attesting that a notice of settlement (Form 75.11), appended as an exhibit to the affidavit, has been personally served on the person and no rejection of settlement (Form 75.12) has been filed with the court within 10 days after service of the notice.
The court will not grant judgment on consent without compliance with r. 75.07.1(c). But what does that mean? It does not mean that a person who has submitted her rights to the court must consent to the settlement before judgment is granted. And it does not mean that the person who submitted her rights will suddenly be in a position to thwart the settlement.
If the person serves a Notice of Rejection of Settlement (Form 75.12) then she must specify in the document the reasons she rejects the settlement. The Notice of Rejection of Settlement is served on the party who provided notice of the settlement and it is filed with the court. The court may then scrutinize and consider the reasons given for rejecting the settlement. However, that does not mean that the reasons will be accepted or the settlement rejected based on the person’s opinions of the settlement, however meritorious the reasons may be.
Choosing not to participate in litigation may be the right decision for some individuals who are beneficiaries to estate litigation. But it is a decision that deserves due consideration because of the rights that are forfeited and because an individual may end up living with a settlement that she does not agree with or believe should not have been granted by the court.