2020-06-04
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Flurry of Inheritance Act 1975 cases

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Posted by Laura Abbott on 04 June 2020

There has been a flurry of Inheritance (Provision for Family and Dependants) Act 1975 (‘the Inheritance Act) cases in the last few weeks, most recently the case of Re H (Deceased) [2020] EWHC 1134 (Fam) where an adult child claimant was successful in her inheritance dispute despite her being estranged from her father and having had no financial assistance from him for a number of years prior to his death, and he had left his estate to his elderly and disabled spouse. 

The daughter was suffering with a long-term psychiatric illness which meant she was unable to work and her income from state benefit provision was insufficient to support both herself and her two minor children. 

This case also addressed the issue of whether a success fee liability due under a Conditional Fee Agreement (“CFA”) could form part of an award under the Act following the decision in Denton v Bullock, judgement in which having only been handed down some 9 days earlier. 

The net estate was valued at £554,000.  The claimant sought sufficient provision to fund the purchase for her of a home, medical treatment, a replacement car and white goods, provision for a shortfall in her income and her legal fees (to include the success fee).

Perhaps to her detriment, the widow declined to properly participate in the proceedings to the extent that she was so non-compliant she was prevented from participating at the hearing.  The court was aware of her annual care home fees and state pension provision but had no other evidence of her financial needs or resources. 

The judge held that it was appropriate to consider the claimant’s CFA success fee as part of the needs.   He awarded her half of the success fee she claimed.  He also awarded her with £10,000 for a deposit for a more suitable rental property (as opposed to the at least £375,000 she sought for the purchase of such a property); £15,000 for the car and white goods; £17,000 for ongoing psychiatric care (she sought an award of between £10,500 and £23,400 so this was, broadly, in the middle); and circa £80,000 for her income shortfall (to include a calculation of the income shortfall plus the loss in benefit provision she would otherwise be entitled to as a result of having received that amount).  In total her award was £139K, so, broadly, a quarter of the estate. 

The issue of adult children and the Inheritance Act is always a controversial one.  On the one hand the premise of English law is testamentary freedom, and, unlike some other jurisdictions, we do not have forced heirship provisions here, meaning a parent does not have to leave anything to their adult child if they do not wish to.  That said, in cases such as these and the famous precedent case of Ilott, there is a moral argument that where an adult child is in legitimate need and there is sufficient in the estate to do so, then this is a responsibility of the parent and that resource should be available as opposed to complete reliance on the state. 

In addition, this case considers the other thorny issue of the success fee.  Claimants in financial need would not be able to afford to fund their case without their solicitor offering a CFA (commonly a ‘no win no fee’) but for solicitors to be able to afford to offer them they need to charge a success fee so the fees they recover on the ones they are successful on are higher to balance against the ones which are not successful and so for which they do not get paid.  On the one hand, the success fee is a financial liability of the claimant which if not taken into account could significantly reduce the value of the award they receive, which is based on a careful calculation of their financial need.  On the other hand, as a matter of public policy, in other forms of litigation success fees are not recoverable, so it goes against this.  This is why the decision in this case and in Denton v Bullock has sparked controversy and no doubt this will attract further consideration of the judiciary.

About the author

Laura Abbott

Associate

Laura specialises in all aspects of contentious probate work and disputed estates.

Laura Abbott

Laura specialises in all aspects of contentious probate work and disputed estates.

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