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Setting a trend for success fee recovery in 1975 Inheritance Act claims?

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Posted by Katie Alsop on 04 June 2020

Katie Alsop - Will Disputes Lawyer
Katie Alsop Partner

In a recently unreported Inheritance (Provision for Family and Dependants) Act 197 claim (‘the Act’), His Honour Judge Gosnell sitting at Leeds County Court made the unusual decision to give an award specifically to part-pay a claimant’s success fee, which was payable by the Claimant as a result her ‘no win, no fee’ funding agreement. 

As is the usual course of events in litigation matters, ‘costs follow the event’ which means that the losing party will pay the winning party’s costs.  It is a common misconception that the costs incurred in pursuing a claim for reasonable financial provision in accordance with the Act, will mean that they are paid from the estate; that is not the case. 

In some circumstances claims can be funded by way of a ‘no win, no fee’ agreement and typically those have a success fee associated with them.  This means that if the person whose claim is being funded by way of a ‘no win, no fee’ agreement is successful with their case, a success fee will be payable to their legal advisors.  The amount of that success fee varies but ultimately, it is for the winning party to pay that sum.  This means therefore, that even if a claimant was successful in securing reasonable financial provision, the losing party would not be responsible for the success fee which would fall due. 

The issue of the payment of success fees comes up regularly, especially when parties are considering settlement.  The reason for this is that success fees can be significant and therefore it calls into question how much of the “award” the claimant will actually receive having secured financial provision from an estate, if some of that is going to be used to pay a success fee.  It can however, be the position that the only way in which a claimant can run a claim is to have the benefit of a ‘no win, no fee’ agreement and was it not for that particular funding arrangement, they would not have been able to bring the claim at all.  For that reason, the benefit which they gain, may well outweigh the issue of the success fee having to be paid to their legal advisors, at the end of the matter.   

Turning to this case specifically, the facts in short terms are that Yvonne Bullock issued a claim against the estate of her partner Simon Denton, with whom she had been cohabitating for around 4 years.  The sole beneficiary of Mr Denton’s will, was his brother, to whom he had left his £2m estate.  It was Mr Denton’s brother that sought to challenge Ms Bullock eligibility to bring a claim on grounds that he disputed the relationship which existed between Ms Bullock and Mr Denton, saying that the relationship only extended to one of Ms Bullock being a housekeeper to Mr Denton.  There are various grounds upon which someone can be eligible to bring a claim pursuant to the Act but in this case, Ms Bullock relied on being both a cohabitee and financially dependent on Mr Denton. 

A particular point of interest in relation to the cohabitation criteria, is that of the unusual relationship and living arrangements which existed between Ms Bullock and Mr Denton, in so far as there was a period of time during which they did not live together.  In order to qualify as a cohabitee pursuant to the Act, it is necessary for a claimant to have lived with the deceased for a period of two years immediately prior to the deceased’s date of death, albeit there is case law which establishes that temporary absence can be ignored (see Gully v Dix [2014] 1 WLR 1399).  Having considered the evidence, His Honour Judge Gosnell was satisfied that the relationship had continued throughout the whole period as Ms Bullock had claimed and accordingly, she was able to successfully claim on both of the grounds upon which she had relied when setting out her claim. 

With Ms Bullock having crossed the eligibility hurdle, His Honour Judge Gosnell decided that an appropriate award for Ms Bullock to receive, was a life interest in the sum of £140,000 from which she could buy a property; and a cash sum of £70,000.  This cash sum was to be used to fund the costs associated with moving, to buy a car, to replace old white goods (which was a point of discussion in the Ilott v The Blue Cross & Ors case) and to discharge debts which she had incurred historically.  So far, none of this sounds out of the ordinary however, the £70,000 was set at such a level to also allow a significant proportion of the success fee for which she was liable, to be paid. 

His Honour Judge Gosnell’s reasoning for this was that Section 3(1)(a) of the Act allows for a claimant’s financial needs to be taken into consideration and the success fee was considered to be a “financial need”, as were the debts which had been incurred after Mr Denton had passed away. 

This case is of significant interest to practitioners and claimants alike, because this is the first time that an award has been made to a claimant when seeking reasonable financial provision, towards a claimant’s success fee. 

It therefore remains to be seen whether going forward, it becomes the norm that a success fee can be included within a claimant’s financial needs with the reasonable expectation that an element of that will be met by the award made by the trial Judge.  It does however bring into question various issues as to how that might work practically when for example, the estate is not particularly large and by making such an award, that would leave the beneficiaries of the will, as chosen by the deceased, with a significantly lesser sum than the deceased might have anticipated when the will was made. 

We may however, see a trend beginning given that less than two weeks after this case was decided, another award was made in a 1975 Act claim, again allowing for an element of success fee liability to be paid (see Re H (Deceased) [2020] EWHC 1134 (Fam).  It may well be that both these cases are appealed and as a general observation, the awards for payment of success fees do not sit well with the Court and Legal Services Act 1990, as substituted by the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which expressly excludes the ability to order that one party shall pay, in whole or in part, a success fee.  These cases will now be watched with much interest to see if they are paving the way for the recoverability of success fees in 1975 Act claims.

If you believe that you may be entitled to reasonable financial provisions from an estate, please contact one of our team members who will be happy to discuss that with you. 

About the author

Katie specialises in contested wills, disputed estates and the removal and substitution of executors.

Katie Alsop

Katie specialises in contested wills, disputed estates and the removal and substitution of executors.

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