It is one year since the decision of the Supreme Court in Ilott v Mitson [2017] UKSC 17. Has the case changed the approach of courts when looking at claims under the Inheritance (Provision for Family and Dependents) Act 1975? Apart from the obvious implications for adult children left out of a will, the decision has been a useful attempt by the court to try and reign in some of the more excessive claims.

The media portrayal of the decision has generally been overstated and inaccurate. Many members of the public, prior to reading the press coverage of the Ilott case, were surprised to know that if an individual doesn’t like the provisions of a will, they can take it to court, have the judge rip it up and re-write it. What of the deceased’s wishes or reasons for excluding someone from their will? The courts appear to have been quite prepared to disregard these in favour of the paramountcy of the claimant’s stated ‘needs’. This is, of course, a loaded, colourful and overly simplistic description of the exercise which a court undertakes when hearing claims under the Inheritance Act 1975. The Daily Mail’s headlines proclaiming that ‘Animal charities [are] going to war with grieving families to grab their inheritance’ or descriptions of Ms Ilott being ‘spitefully’ left ‘without a penny’ are, perhaps, equally loaded and inaccurate. Neither stated position is accurate or fair.

There has been significant historic confusion as to the applicable principles employed which has resulted in wildly differential treatment of certain categories of applicant. The Supreme Court in Ilott was set to clarify the area. Portrayal of that clarification has varied from a declaration that the decision spells the end of 1975 Act challenges to wills per se (such as the BBC coverage) to those who decry the unfairness of Ms Ilott’s predicament (being awarded £50,000 as opposed to the £160,000 set by Court of Appeal in 2015).

Clarifying the historic confusion

The 1975 Act allows certain qualifying individuals (eg children, partners, spouses, dependents) to bring a claim arguing that a will fails to make ‘reasonable financial provision’ for them. Once they have convinced the judge that the will fails to do just that, the judge can then consider whether to make an award. If he or she was married to the deceased, the claimant can ask for ‘reasonable financial provision whether or not required for their maintenance’ whilst everyone else must make do with ‘reasonable financial provision required for their maintenance’. This can be a distinction without a difference depending on what type of applicant you are and whether or not your claim is heard in the Family or Chancery Division. It is also true that, despite being held to the same legislative ‘maintenance only’ standard, co-habitants (that is, unmarried co-habiting partners of two years or more) have been treated far more favourably than, say, adult children or dependent family members generally.

Maintenance: whatever you want?

Prior to Ilott, courts had failed to set down any real and robust principles. ‘Maintenance’ doesn’t mean ‘whatever you want’. Equally, ‘maintenance’ does not mean ‘subsistence level’ or a level which we may equate to welfare (Re Dennis [1981] 2 All ER 140 and Re Coventry [1980] Ch 461). If you happen to be the claimant in Negus v Bauhaus [2007] All ER (D) 353 (Oct) or Musa v Holliday [2012] EWCA Civ 1268 then ‘maintenance’ certainly did appear to include everything one could ever wish for. In fact, it can include provision for a large mortgage-free property, hundreds of thousands of pounds, private healthcare, Sobrani cigarettes, fine wines, dining experiences, spa treatments and luxury holidays to name a few. It would entirely depend upon the individual person, their ‘station in life’ and the circumstances of the case (the full criteria are set out in s 3 of the Act). Ms Negus and Ms Musa (co-habitant girlfriends who had short relationships with the deceased) were supposedly restricted to the maintenance standard, but it is hard to imagine a more lavish award (indeed both women became millionaires). King v Dubrey [2014] EWHC 2083 is another example of a large award in circumstances which didn’t justify it (£75,000 to a nephew from a £350,000 estate on the basis that he lived with/cared for the deceased for four years). The Court of Appeal agreed that the award was excessive (although were not invited to interfere with the quantum) during submissions from counsel on the alternative case being pursued.

Negus was such an exceptional case that the media portrayal was most likely justified. The Telegraph headline in 2007 declared ‘Lover wins court fight with dead tycoon’s son’ and further described Ms Negus as being ‘lavished with jewelry and gifts’. The Times headlines of the same year described the award expressly as being for ‘a lavish lifestyle’. It is hard to disagree.

Grossly unfair outcomes

Needless to say the legal position has been delphic and unprincipled. It has resulted in grossly unfair outcomes – Negus being a good example; the claimant already had £600,000 from provision that the deceased expressly made for her, but the court decided that her ‘maintenance’ demanded a further £600,000 worth of cash and assets. Equally, the court has been quite prepared to pinch the virtual entirety of UK-based assets (in Musa) and give them to an unmarried partner on extremely shaky grounds including the fact that the defendants had not justified why they should receive the money. The assets included a long-standing family business. The defendants were so aggrieved by the claim that one of them famously tried to murder the claimant (and was sent to prison for six years as a result). Interestingly, Musa attracted virtually no press attention despite being a far more exceptional/lavish award than that made in Negus.

It cannot have been Parliament’s intention in 1975 that the purportedly ‘less generous’ maintenance standard would be deployed to transform claimants into millionaires.

The decision in Musa has led the Family Division (more so than the county court or Chancery Division) to disregard the express burden set out in the legislation and instead apply its own; if the defendant failed to go through the process of presenting a financial case as to why they needed the money, they were treated as having no needs ergo the whole estate could be made available to meet the claimant’s needs. In other cases, charities were unjustly determined to have ‘no needs’ by default meaning that they found it especially difficult to defend claims (see the Court of Appeal decision in Ilott for a full example of this reasoning). This difficulty was compounded by the fact that a charity will very often have no personal knowledge of the claimant or any real basis upon which to challenge their evidence. The Daily Mail headline quoted earlier is, thus, entirely unfair; it is usually the family members who ‘go to war’ with the charities over cash destined and intended for the charity itself.

Beneficiaries held to ransom?

The 1975 Act has long been a framework in which some more demanding claimants have been able to hold the rightful beneficiaries (be it charities or family members) to ransom by demanding unreasonable settlements. The risk is rarely with the claimant. They will only have to win ‘something’ to be safe from costs risks (unless suitably large offers are made and refused). The defendants can only lose the claim (unless the claimant is awarded nothing at all which, in fairness, is not unusual in adult child cases). It gets worse for the embattled defendants – the claimant’s award is ringfenced and treated as a specific pecuniary legacy with priority. The court will decide the claimant’s award without looking at the costs of the litigation. A court may well decide to make an award to a co-habitant claimant on a basis which represents a 50:50 split which meets the claimant’s and defendant’s needs. The notional 50:50 split begins to look a lot worse when the court then goes on to award the claimant their costs from the estate; which inevitably must come from the defendant’s share. This imbalance has led to many claimants running riot with unreasonably large offers which defendants often have no choice but to accept if they either can’t fund the litigation or otherwise find the whole affair too distressing and distasteful. Any defendant who does dare to fight the claimant risks being labelled as ‘antagonistic and resentful’ by the judge (which is the description ascribed to the defendant in Negus).

No free will

The Supreme Court in Ilott was set to clarify the operation of the Act in early 2017. My view is that the main principle to be derived from Ilott is that the appellate courts should not interfere with decisions on quantum made by a judge who has heard the evidence. This is quite right – the Court of Appeal in Ilott seemed to believe it was appropriate to look into whether Heather Ilott’s mother was being unreasonable in falling out with her and deployed all manner of mental gymnastic reasoning to give the claimant an unreasonably large award (which was reduced back to £50,000 by the Supreme Court).

"It cannot have been Parliament’s intention in 1975 that the purportedly ‘less generous’ maintenance standard would be deployed to transform claimants into millionaires"

However, James Aspden, the solicitor acting for the charities in Ilott gave a comment to the BBC when the judgment was handed down, in which he declared that the Supreme Court had unanimously reaffirmed ‘that principle that we’re all free to choose who will benefit when we die’, and this was certainly the way the decision was framed by the BBC and sections of the media. I think this goes too far; the Supreme Court fell well short of making any such comment. The decision does not change the fact that we are not free at all to choose who will benefit because any qualifying individual can still bring a claim under the 1975 Act and be successful. There have, for example, been several successful ambitious claims by co-habitants and other dependents in 2017 which were made despite the fact the deceased wanted their children to inherit instead. It would be fairer to say that the Supreme Court simply overruled an earlier line of reasoning that the deceased wishes were not irrelevant nor to be disregarded by the court as unimportant. The Supreme Court did set down some very useful safeguards which I believe the lower courts have been quick to take on board. For example, it is not right that the defendant ‘has to justify their inheritance’ by reference to their needs. The claimant’s needs are also to be assessed with some objectivity as opposed to being an entirely subjective exercise.

Sensible and authoritative reasoning

Is the death-knell tolling for the more ambitious claims? The biggest casualties of Ilott have been ‘adult children’ and (to a lesser extent) the claimants who are restricted to the maintenance standard. Recently Wilson v Lassman [2017] EWHC 85 (Ch) held that the claimant should demonstrate a ‘palpably convincing reason why provision should be made’ when referring to claims brought by adult children beyond simply needing the money. There has also been a much more conservative measure applied to what is meant by ‘maintenance’ since Ilott. It is no longer the case that claimants can present the court with a long luxury wish-list and be taken at their word in relation to every item. Certainly, the months following the decision in Ilott have shown a much more robust approach. In Williams v Martin [2017] EWCH 491 (Ch) the High Court held that outright transfers of property will ordinarily be excessive provision. The court in Lewis v Warner [2016] EWCH 1787 (Ch) was equally sceptical when looking at whether or not a co-habitant should be expected to pay for any transfer of property.

In my view the regime is developing into one where the court has a bedrock of authoritative reasoning upon which to make awards for those in genuine need. It is my hope that this area is headed toward a more sensible and measured future; maintenance rather than opulence. Notwithstanding, the decision in Ilott does not mean that we are ‘free to choose’ our beneficiaries, nor did it spell an end to claims under the Act.

Contributor Oliver Ingham is a barrister in the commercial and Chancery teams at 3 Paper Buildings