Funding Will disputes after Hirachand v Hirachand
In October 2021, the Court of Appeal handed down a landmark decision in the case of Hirachand v Hirachand. The Court of Appeal confirmed that the success fee under a Conditional Fee Arrangement (CFA), also known as a ‘no win, no fee’ arrangement, may be recoverable as part of the lump sum awarded to a claimant making a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act).
Under a CFA, a claimant will usually only pay their lawyer if they are successful in their claim, paying an agreed percentage of any amount they are awarded. This type of funding arrangement means that clients can afford to pursue cases that they may otherwise not have been able to afford.
The 1975 Act allows a person to make a claim against an estate where the deceased’s Will (or lack of it) fails to provide the claimant with reasonable financial provision. The claimant in the Hirachand case was the estranged daughter of the deceased, who suffered from mental health problems and had been unable to work for around 10 years. The deceased’s surviving spouse, who was left all of the estate under the deceased’s Will, defended the claim. The court held that the daughter was entitled to financial provision, and she was awarded a lump sum of £138,918 from the estate. The court also included £16,750 as a contribution to the daughter’s need to pay a success fee under a CFA she had with her solicitor, ruling that this was a debt, satisfying the criteria for ‘financial need’ within the meaning of the 1975 Act.
The case, having been appealed again, went to the Supreme Court in January 2024, and the decision as to whether the significant Court of Appeal ruling will be upheld is eagerly awaited. The question being considered is effectively whether it is the claimant themselves or the deceased’s estate that should fund the litigation.
Ordinarily, clients are personally liable for paying the success fee under a ‘no win, no fee’ arrangement to their solicitors, from the money they are awarded. The costs of litigation can be unpredictable and can often discourage people from initiating claims, which can lead to them missing out on potentially substantial sums of money to which they would be otherwise entitled. Furthermore, the nature of 1975 Act claims means that, often, the claimant does not have the financial resources to fund the legal costs of the claim themselves.
If the Supreme Court upholds the Court of Appeal decision, claimants bringing a 1975 Act claim may also be able to recover their lawyer’s success fee as part of their award, representing a significant shift. This decision will be welcome news for those who are considering bringing a claim under the 1975 Act.
If you feel that you have not been provided for under someone’s Will or intestacy and require some advice on your position, please contact our team of contentious probate experts. Our firm can be flexible in terms of payment and we can offer a variety of payment options, including:
Interim payments: this is our usual way of billing, whereby why we will send you regular bills for the work we have completed in the previous period (based on the time we have spent on the matter, in addition to any disbursements). This allows you to smaller, regular payments rather than paying the whole sum at the end.
Deferred payments: this is where we can agree for payment to be made after the case or at a later stage in the case.
CFAs (no win, no fee): in certain cases, we may offer CFAs and, as explained above, these are where you will pay a percentage of any money awarded in a successful claim.
Fixed fees: sometimes, we can agree to a fixed fee arrangement, whereby we will confirm a fixed fee for certain work to be done at the start of the case.
Contact Katherine to discuss this further.
