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Inheritance Act Claims and Conditional Fees

Higgins v Morgan & Ors [2021] EWHC 2846 (Ch) was a claim under section 1(1)(d) of the Inheritance (Provision for Family and Dependants) Act 1975 by an adult stepson of the deceased, who was treated as ‘a child of the family’.  The court held that the deceased’s intestacy had not made reasonable financial provision for the claimant and that an award should be made from the estate. It also held that a proportion of the claimant’s conditional fee agreement (CFA) “success fee” could be paid to the claimant on the basis that his liability for this formed part of his ‘needs’ within the meaning of section 3(1)(a) of the Act.

Background

Barrie Higgins was the stepson of the deceased.  Barrie’s mother, Joan, married the deceased in 1986, and thereafter she, Barrie and his sister Heather lived with the deceased. Barrie and Heather were treated by the deceased as his own children.  After Joan and the deceased divorced, Barrie and Heather continued living with the deceased until moving out to start their own adult lives. The deceased died prematurely in 2017 without leaving a will so the intestacy rules applied. His estate was valued at just under £200,000 which, as he had no children of his own and Barrie and Heather were not his biological children, passed to his six cousins with none to Barrie or Heather. 

Barrie made a claim under section 1(1)(d) of the 1975 Act, claiming that the intestacy rules did not provide reasonable financial provision for him. He claimed that this was contrary to the deceased’s wishes, as he had been assured on several occasions by the deceased that he intended to make a will in his favour. 

By the date of the trial, Barrie was married and living in France. Barrie was in a precarious financial position and was dependent upon his wife, who was a wedding photographer. Their situation deteriorated further due to the impact of Covid-19 on both the wedding and travel industry.  Barrie sought provision to assist with his income deficit for a period of 10 years, pay his debts, and provide him with a contingency fund. Although his claim was defended by the beneficiaries of the estate, the Court awarded him an interim payment (under section 5 of the Act) consisting of a £4,000 lump sum and £1,000 a month up until trial. 

Due to his financial situation, Barrie had pursued his claim by way of a conditional fee agreement, which allowed for a success fee.  Following recent case law, including Re H [2020] where the Judge held that a success fee could be taken into account in a 1975 Act claim as a debt of the claimant under section 3(1)(a), Barrie sought a contribution towards his success fee as part of his provision.

Trial

At trial, Judge Cawson considered the precedent put forward in the case of Ilott v The Blue Cross and others [2018], that a claimant under the Act (other than a spouse or civil partner) must prove “something more” than just financial need.  An example given by the Supreme Court in the case of Ilot was “some form of moral claim” owed by the deceased to the claimant. The Judge held that the following factors should be considered when considering a 1975 Act claim:

  1. Can the Claimant discharge the burden of demonstrating a need for maintenance and, if so, to what extent?
  2. Can the Claimant demonstrate there is “something more” than just the relationship of adult child and parent (or stepson and stepfather)?
  3. If the above are satisfied, does the application of the section 3 factors demonstrate that reasonable financial provision has not been made for the Claimant?
  4. If point 3 is satisfied, what reasonable financial provision ought to be made for the Claimant?

Judgment

The Judge held that the assurances made by the deceased resulted in “some form of moral claim” owed by him to Barrie. The judge noted that the deceased had helped Barrie in times of financial need and had promised to give him £10,000 to buy equipment for his wife’s business not long before he died.  Further, the judge considered that Barrie had a very close personal relationship with the deceased, whilst the beneficiaries of the estate were distant relatives.

Consequently, an award of £40,800 was made, which included provision for the purchase of videography equipment to assist in the wedding photography business.  This award was then increased to £55,000, to take into account the success fee payable by Barrie to his solicitors as part of his conditional fee agreement.

In his judgment, Judge Cawson stated: “I consider it relevant for the purposes of s.3(1)(a) of the Act to the question of the financial resources and financial needs which Mr Higgins has or is likely to have in the foreseeable future. This is because if I do make an award in his favour so as to trigger "success" and a requirement to pay the success fee, which cannot as a result of s. 58A(6) of CALSA be recovered from the Defendants as costs, then his liability to pay the success fee will be bound to affect his ability to maintain himself to the extent sought to be achieved by the award.” [133]

This case is therefore a further example of the approach the Courts currently take when a claimant brings a claim under the 1975 on a conditional fee arrangement. The logical assumption from this is that the defendants can and should ask a conditionally funded claimant to provide details of steps taken to fund the case, and for details of any success fee that the claimant may have to pay if he/she were to be successful, as part of the disclosure required of the claimant in bringing his/her claim. 

A link to the full judgment can be found here.

For more information on this article, please contact Robert Horsey.

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