On 15 March 2017, the Supreme Court handed down a judgment in the now infamous case of Ilott v Mitson. This is the first case where the Supreme Court (or the House of Lords) has considered the Inheritance (Provision for Family and Dependants) Act 1975 ('the 1975 Act').
Having previously written articles and spoken regarding the implications of this case, I now want to take this opportunity to give you my thoughts on this judgment.
The judgment was given by Lord Hughes. Unusually, a further judgment was given by Lady Hale DPSC raising concerns about the adequacy of the existing legislation.
The headline news is that the charities' appeal was successful. This means that the original decision at the County Court which ordered £50,000 to Mrs Ilott was upheld, as opposed to the circa £163,000 she was awarded in the Court of Appeal.
A brief reminder of the facts of this matter is that Mrs Jackson left the entirety of her Estate, which was in the region of £500,000, to three charities. It was established that there was no obvious connection to these charities during her lifetime.
Mrs Jackson and her daughter Mrs Ilott had been estranged for many years. This had stemmed from Mrs Ilott leaving the family home when she was 17 to live with her boyfriend who Mrs Jackson did not approve of.
The majority of Mrs Ilott's income comes from state benefits and her family lifestyle was said to be extremely modest.
Mrs Ilott issued proceedings under the 1975 Act claiming that her mother had failed to make reasonable financial provision for her in her Will. The Judge in the County Court awarded her £50,000.
Both parties appealed, leading to the aforementioned judgement in the Court of Appeal where Mrs Ilott received circa £163,000. This award was made so that Mrs Ilott could buy her house under the Right to Buy Scheme.
The Supreme Court highlighted the significance of testamentary freedom when considering these types of cases. It was recognised that any award under the 1975 Act will be at the expense of a person (or in this case, a charity) that was to benefit under the original Will. The perceived challenge to the freedom of testamentary expression certainly caused considerable concern – both anecdotally and indeed in the popular press!
Most will agree and indeed applaud the view of the Supreme Court that greater weight should be given to the wishes of a deceased in their Will and that it is a very important factor in deciding cases of this nature.
The Supreme Court also looked at the issue of estrangement and considered that the Court of Appeal did not give this factor sufficient weight. Quite sensibly, it held that matters of conduct were relevant in these cases although 'care must be taken to avoid making awards under the 1975 Act, primarily the awards for good behaviour on the part of the Claimant or penalties for bad on the part of the deceased'.
It was hoped that the judgment would give some guidance in relation to the concept of maintenance. Whilst not going as far as perhaps many hoped, the Court did consider maintenance in a 1975 Act context. The Supreme Court held that maintenance does not extend to 'any or everything which it would be desirable for a Claimant to have'. An adult child with income and in comfortable circumstances therefore will not have a need for maintenance.
It was also held that maintenance can be provided by housing but, if so, should be more often provided by way of a life interest than a capital sum. This represents something of a shift from the previous position of parties seeking to obtain a 'clean break' settlement in these cases.
Charities were only briefly mentioned in the judgment. The Supreme Court noted the position of charities as Defendants and the fact that although any receipt of an inheritance is not based on a personal need, charities do depend heavily on testamentary gifts for their work. The fundamental point was that the charities were the chosen beneficiaries of Mrs Jackson.
The Supreme Court also held that generally any appeal under the 1975 Act will not succeed, unless the judge has made an error of principle such as value judgement. Value judgements are much better suited to the judge who hears all the evidence and will not be lightly overturned. The importance therefore of being fully prepared for trial is therefore increased as this judgment effectively closes off the avenue for appeals on anything other than errors of law.
In her further judgment, Lady Hale criticised the current state of the law as being unsatisfactory. Lady Hale reiterated what I had been saying for many years, namely that the present law gives virtually no help in deciding how to evaluate these types of claims or how to balance what are called 'section 3' factors of the 1975 Act.
In my view, this judgment is extremely sound and sensible, and presents a welcome shift in the balance towards the Defendant. The judgment recognises the importance of a testator's wishes and provides some assistance in valuing and determining these claims.
The previous Court of Appeal judgment at least gave the perception that it was easier for disinherited adult children to make claims against their parents' Estate. We received a number of letters of claim from disappointed adult children seeking a third of the Estate because of 'Ilott'.
Each individual case will very much be on its merits but the Supreme Court's judgments reemphasis that it will be difficult for disappointed adult claimants who are in comfortable circumstances to bring a claim under the 1975 Act.