Many people think of family disputes in terms of couples who are in the process of splitting up or who have separated and have outstanding issues to resolve such as how often a non-resident parent has child contact.
However, experience demonstrates that disputes about the wills of deceased loved ones and who is entitled to inherit what can be just as acrimonious and potentially, as difficult to resolve. Inheritance disputes often arise where the will of a deceased person makes little or no provision for an aggrieved relative/family member or dependent who may be of limited means.
The Inheritance (Provision for Family and Dependents) Act 1976 (known as the Inheritance Act) allows an aggrieved person to make an application to the court within six months of the date of death of the deceased requesting that the terms of the will are altered so as to make reasonable provision for him/her. In many instances, disputes about what amounts to “reasonable provision” can become very prolonged and bitter.
As with most court proceedings, in Inheritance Act claims there are costs implications. This is because any money spent by personal representatives in contesting such a case means that the value of the deceased’s estate will be reduced, perhaps very significantly. Accordingly, at the end of the day there will be less money available for many if not all of the beneficiaries or potential beneficiaries, including the person making the court application. If some or all of the beneficiaries named in the will are either of limited means or are charities considerable added pressures will be placed on all concerned and the personal representatives may find themselves in an impossible position. In some instances the considerable sums of money that are incurred in respect of legal and court costs may effectively outweigh any benefits that might result from the court proceedings having been started in the first place.
In Ilott the deceased left the vast bulk of her estate which was valued at around £5000,000 to three large charities. During the court proceedings the charities initially argued that even though the claimant was of limited means, there had been no contact between him/her and the deceased for years and that to all intents and purposes he/she was not a dependent.
Initially, in noting that the claimant was of limited means, a County Court judge decided that the deceased had unreasonably excluded the claimant from any financial provision in the will. However the County Court judge rejected the claimant’s claim for an award of approximately £250,000.00 and instead ordered £50,000.
In making what many will see as a very important decision, the Court of Appeal decided that the County Court decision should be set aside. Instead the Court of Appeal awarded £143,000 so as to enable the claimant purchase a property to live in.
Many will consider that the Court of Appeal decision amounts to a very significant change in the law and people intending to either make a will or alter an existing one would be very well advised to take legal advice and consider the costs and other implications of this case. However, as has often been demonstrated, even the very best prepared will is not “court” or “lawyer proof”. Equally, it is likely that rightly or wrongly the decision in Ilott will fuel discontent amongst those excluded from the wills of relatives or benefactors for years to come.
Mediation which could quite conceivably be started before the six month deadline for issuing court proceedings expires, will give the parties to an inheritance dispute the opportunity of considering the issues in the much cheaper, and easily arranged forum of a day’s mediation. Although the parties may want to their lawyers to be involved in the mediation process, in practice the costly correspondence, court related paperwork and the considerable expense associated with court hearings that would otherwise be required will be considerably reduced. The informal and confidential nature of mediation allows the parties to be full and frank with one another and helps to minimise the hostility and acrimony that all too often results from court proceedings.
Additionally, given that in many instances, the courts are concerned about people conducting expensive litigation, it is quite conceivable that in many instances, parties who either decline to go to mediation or who do not cooperate fully with the process could find that large costs penalties are imposed.
Taking into account the considerable amount of preparation that would be required the cost of a one-day court hearing alone could easily amount to several thousand pounds, much of which will be subject to an additional VAT of 20%. A one-day mediation with an Albert Square Mediation Limited mediator will generally cost £750 per day with no VAT. There will be no additional administrative charge. Even if the parties’ lawyers attend the mediation and charge at their usual rates, in practice the total costs will still be considerably reduced.
Some will argue that because an important principle was at stake, the parties to the case had no option but to go to the Court of Appeal. However, it is suspected that some of those who have been affected by this decision may consider that very little benefit was derived. In future the parties to such disputes may well feel that mediation gives best value and is a viable, effective alternative to costly, stressful court proceedings.
Additionally, and as is demonstrated in the first article in this blog, nowadays the courts see mediation in a much more favourable light and readily acknowledge not only the cost savings that it gives but that itis a just and fair process. Parties to court disputes about inheritance claims who either unreasonably refuse mediation or who do not co-operate in the process may find that whatever the outcome of their cases may find that either they cannot recover the bulk of the costs or that they are ordered to pay a significantly higher portion of an opponent’s costs than might otherwise be the case. In Inheritance disputes it is therefore in everyone’s interest not only to mediate but to do so as quickly as possible.
* case ref – B3/2014/2886
Principal Director of ASM PLUS, civil/commercial, workplace, employment, family and educational mediator and trainer with a judicial/legal background. He has knowledge and expertise in dispute resolution in a wide range of areas and disciplines and mediates online.