The Inheritance Act 1975 allows potential applicants to claim ‘reasonable financial provision’ from an estate where they have not been provided for, whether by being left out of a Will or having been left a lesser amount than expected, or due to intestacy.
What amounts to ‘reasonable financial provision’ depends upon whether the claim is made by a spouse, or another applicant. If a spouse makes a claim, they are entitled to such provision that is ‘reasonable in all the circumstance’ to maintain their standard of living.
In cases relating to other categories of applicant, ‘reasonable financial provision’ means what is required for their maintenance needs. It is for the court to exercise its discretion.
We appreciate that the prospect of legal costs can be a deterrent to pursue a claim. By the nature of the application, a client bringing a claim such as this is likely to be financial need.
We do not consider that legal costs ought to be a bar to pursuing a claim that has merit. We will always consider the most appropriate method of funding according to a particular client’s position and the facts of the case.
In addition to the traditional fee paying method, there are other funding options that can be explored, including:
a monthly instalment basis
a deferred payment basis
a Conditional Fee Agreement
A CFA is a funding arrangement between a firm and their client setting out that as long as the client abide by its terms, the fees are conditional upon achieving a successful outcome. CFAs are often referred to as “no win no fee agreements”. This may be an attractive option to claimants who are unable to fund their claim but are likely to receive an award.
If the claim is not successful, the firm’s legal costs are not payable. However, please be aware that there may be other expenses that are payable.
Some CFAs allow for a success fee which is an additional amount payable in the event of a successful outcome. Previously, the success fee was payable by the client and could not be recovered from the opponent. However, this position has been revised following the court’s recent decision in the case of Hirachand. We consider that this case enables claimants in certain cases to have greater access to justice where otherwise the prospect of legal costs may be a deterrent.
The court has provided a helpful decision for claimants in this area. In this case, the estranged daughter of the deceased bought a claim against her late father’s estate under the Inheritance Act – since no provision was made for her in the Will. The claim was defended by the deceased’s surviving spouse, who was the sole beneficiary of his estate and was suffering from ill health.
The daughter was successful in her claim and, in calculating the appropriate sum, the court included an element for the success fee that she incurred as a liability if successful in her claim.
This landmark judgment from the Court of Appeal confirms that the court may, with discretion, make provision for a party’s success fees as part of an award under the Inheritance Act.
Where there is a financial need, the court may deem the success fee payable as a debt and take this into account when calculating the award. Successful parties may now seek to recover at least part of their success fee, meaning that they can retain more of their award.
If you have any questions about an Inheritance Act claim and potential awards, please contact the contentious probate team for expert advice.
