A claim made under the Inheritance (Provision for Family and Dependants) act 1975 is for reasonable financial provision from an estate where you have not been provided for or properly provided for under a Will or pursuant to the rules of intestacy if there is no Will.
Only certain classes of people can make these claims and they are subject to very strict time limits.
The old and new time limits
Before 2014, the 6 month time limit to issue these claims would start to run once probate had been granted in an estate.
Inevitably, this gave rise to issues where the personal representatives would deliberately delay obtaining a grant to stall such claims. Whilst a potential claimant could force a personal representative’s hand, this did require court proceedings in absence of agreement so would incur further unnecessary costs and delay.
Following the introduction of the Inheritance and Trustees’ Power Act 2014, a potential claimant can now issue these claims whether a grant of probate has been obtained or not.
It can still present problems, especially given that until such time that you have an idea of the value of the estate, it makes it quite difficult to formulate your claim as to how the estate can meet your financial needs, the change has been welcomed by most as a resolution to potential stalemate situations.
The 6 month time limit
What remains though is the 6 month time limit which starts running as soon as probate is granted. 6 months is a very short period especially if you consider that for most civil claims, it is 6 years.
If you are not involved with the administration of the estate, sometimes you may not even be aware that a grant has been obtained and that time is ticking.
For anyone considering such a claim, the first thing you should do as a precaution is to do a search of the probate registry (known as a ‘standing search’). There is a £10 fee but the process is relatively simple (see guidance here) and the search will last for 6 months.
If no probate has been granted, you can also lodge what is known as a ‘caveat’ which will actually prevent someone from obtaining a grant, and this also lasts for 6 months and can be extended (see guidance here). Previously, this was not advisable given that an Inheritance Act Claim could not be initiated until a grant was obtained, but that hurdle was removed in 2014 as detailed above.
But a caveat should not be entered lightly, as there are processes which a personal representative can take against the caveat holder which has legal and costs implications.
Issuing outside the time limit
If you want to issue an Inheritance Act Claim outside of this 6 month time limit, you must make an application to the court (at the same time that you make your main claim) under section 4 of the 1975 Act.
This states that:
An application for an order under section 2 of this Act shall not, except with the permission of the court, be made after the end of the period of six months from the date on which representation with respect to the estate of the deceased is first taken out.
There is no statutory guidance on when a court should exercise their discretion under s4 but case law has developed some necessary pointers (most recently in Berger v Berger (2013)) which includes the following factors:
- Merits of the underlying claim
- Whether a potential claimant had acted promptly
- Whether there was a trigger for the late claim now being issued out of time
- The conduct of the parties
- Whether the assets of the estate has been distributed
Ultimately the court has a balancing exercise to do what is just and proper between the parties.
The longer you leave matters, the less likely that you will be able to successfully make an application out of time though, because time is ultimately of essence, given that the law makers had deemed it necessary to include such a strict time limit in the 1975 Act.
Claims made 6 years and 10 years respectively in the cases of Berger v Berger (2013) and Sargeant v Sargeant (2018) were unsuccessful.
Extending the time limit
Whilst the golden rule is never to be tardy with these claims, the reality is that 6 months is not very long and so it may just be impractical or impossible to issue the claim in time.
Also, the courts want to encourage people to try and resolve matters amicably without recourse to the judicial system.
Parties may therefore agree between themselves a stay on the limitation, known as a Moratorium or Standstill Agreement, which effectively is supposed to stop the clock on the 6 months from running. It is common practice in other areas of law and is useful to allow more time for pre-action investigations or negotiations.
However, this practice has now come under fire in the recent case of Cowan v Foreman and others (2019). Mr Justice Mostyn advised against such practice and parties should issue proceedings in time and then seek a stay from the court instead. He emphasised that parties did not have the power to suspend the time limit which had been prescribed by Parliament and embodied in the 1975 Act. He concluded that “absent highly exceptional factors, in the modern era of civil ligation the limit of excusable delay should be measured in weeks, or, at most, a few months.”
My own view is that Cowan was a harsh decision. The delay was only 13 months. This is likely to push premature and unnecessary issue of proceedings which contravenes the overriding objective of the Civil Procedure Rules. Also, some potential claimants will have to stump up the eye watering court fee of £10,000 to have the privilege of issuing a claim and I fail to see how this would uphold access to justice.
It seems I am not the only one to have reservations as just last week we have had a decision in the case of Bhusate v Patel & Others (2019) where a different judge has allowed an application 25 years out of time to proceed, albeit no standstill agreement had been entered.
There has also been some concern as to the wider implications for other civil areas of law. But I think these claims are unique because to issue an inheritance act claim out of time you must make an application under s4 of the 1975 Act. Other civil claims will rely on the Limitation Act 1980, and what the Moratorium in those claims provide for is that a potential defendant would not take issue in their defence with the fact that limitation may have expired and so judicial intervention is not called for in the same way. Also it is worthy to note that Standstill Agreements are expressly sanctioned by para 4.1 of the pre-action protocol for professional negligence claims.