Update: Supreme Court Ruling on Inheritance

March 16, 2017

The Supreme Inheritance

Yesterday morning the Supreme Court decided Ilott v Blue Cross [2017] UKSC 17, which is about the correct application of the Inheritance (Provision for Families and Dependants) Act 1975. This will be the leading case in an area where litigation and disputes are evermore common.

Facts

Mrs Jackson died and left her whole estate, a little under £500,000, to various charities. She had one child (Mrs Ilott), who was now an adult. They had been estranged for decades (having fallen out about the suitability of Mrs Ilott’s husband). The mother left her daughter nothing.

Mrs Ilott was described as living in “straitened circumstances”, reliant on state benefits but not in debt. She had lived this way for many years.

The reader will know that the 1975 Act provides that if a will does not make reasonable financial provision for a relevant person, the Court can order that “reasonable financial provision” be made for them albeit limited (in the case of non-spouses) to that needed “for maintenance”.

The first instance DJ had long ago decided that the will did not make reasonable provision for Mrs Ilott whose late mother, according to the DJ, had acted in a “unreasonable, capricious and harsh way”, which apparently was a stepping stone to deciding it was appropriate to interfere with the autonomy of the testator’s dispositions. But the DJ did decide that the lack of expectation should temper any award. He awarded Mrs Jackson £50,000. The Court of Appeal decided the DJ had erred: the estrangement and lack of expectation were of little weight, and awarded her £163,000.

The Supreme Court has now reversed the Court of Appeal’s decision. It considered that testamentary freedom was and is important and had been given inadequate weight. The 1975 Act did not require the Court to judge the actions of the dead beyond the issue of reasonable financial provision and the question for the trial judge is whether the applicant had obtained reasonable financial provision, not whether the deceased acted reasonably. The nature of the relationship between the applicant and deceased were relevant and important factors. The Supreme Court said that the first-instance Court will often be entitled to exercise a broad-brush value judgment, and successful appeals will be infrequent. The Court of Appeal was wrong to interfere and the decision of the DJ was restored.

Comment

The rise in property prices combined with modern and diverse family arrangements has led to more and more disgruntled survivors and this has now become a litigious area of law. This high-profile decision is likely to lead to an upsurge in claims. The decision itself, although careful, clear and authoritative, is in some ways a restatement of conventional principles on an appeal from a Court of Appeal decision which surprised many. Private client and litigation lawyers, must be aware of the case since many of their clients will be effected by it, whilst the 6 month time-limit for making any application means this is likely to be an area where professional negligence claims are more frequent and valuing “the lost chance” requires careful judgment.

Imran Benson