You gotta’ have faith…in ADR

My previous blog examined whether Kenny Goss, the ex-partner of George Michael, may be entitled to a provision from the late singer’s estate, notwithstanding the fact that their relationship had broken down in 2009 (seven years prior to Mr Michael’s death). It was reported at the time that Mr Goss was seeking an award of £15,000 per month on the basis that Mr Michael had been financially maintaining Mr Goss at the time of his death. Pursuant to the Inheritance (Provision for Family and Dependants) Act 1975, Mr Goss made an application for reasonable financial provision from Mr Michael’s estate because he had not been left anything in the singer’s will.

It has now been reported that Mr Goss has settled his claim with the executors of Mr Michael’s estate.

There are of course cases which are litigated to trial, but many more are concluded by way of settlement. In probate and trust claims in particular, which involving emotive issues often between family members, the benefits of settlement can be considerable. There are considerable benefits to looking at alternatives to litigation, which I summarise below.

Advantages of Alternative Dispute Resolution (“ADR”)

1. Under the 1975 Act, the court has wide ranging powers to make awards to an applicant. These might not necessarily be an award that the applicant has asked for but it will be based on what the court believes would provide an applicant with a reasonable financial provision from the deceased’s estate, taking into account all of the circumstances. Because of this wide ranging discretion, it is difficult to advise a client what the ‘end result’ of an application may be. This makes claims of this nature unpredictable and the prospect of settlement more appealing.
2. Engaging in ADR can save significant time and costs; not only legal costs, but management and time costs which are inevitably lost when dealing with litigation. Cases can take a long time to come to trial, and legal fees can be significant. Even if a party has a strong prospect of success, they may prefer to save the stress of litigation in the long run, particularly if the claim is between family members.
3. Litigation in England and Wales is public (save for some specific types of cases). As soon as a claim form is issued, the details are in the public domain. ADR is a private process, so that the details of the process are private. Additionally, if you manage to reach a settlement, the terms of that settlement can also be kept confidential.
4. Settlement discussions (and any offers made) are usually ‘without prejudice’ to a party’s position. This means that a party can make an offer without it being referred to in court and without prejudice to their pleaded case. This allows parties to negotiate freely without worrying that the terms of any offers made will be seen as giving in or showing their hand.
5. Whilst the court has the ability to make awards which is considers are fair in all the circumstances, ADR means that parties can work towards creative solutions that a court may not be able to award. The most obvious of these, in family disputes, is simply an apology or an acknowledgement by one party that they have done something wrong. A court cannot order someone to apologise.
6. The court expects parties to have engaged in some sort of settlement discussions. Refusing to take part in mediation (or other forms of ADR) mean that a party can have costs awarded against them even if they are ultimately successful.

Types of ADR

There are several different types of ADR which may be suitable depending on the nature of the dispute, and the parties involved. Whilst many people may be familiar with the concept of mediation, it is also possible for parties to agree a less formal type of settlement discussion, such as a without prejudice meeting. In this forum, there is no independent third party and usually just the parties involved in the litigation along with their legal advisors.

Alternatively, parties may decide to take part in an Early Neutral Evaluation or Financial Dispute Resolution process, where a judge or specialist counsel reviews each side’s cases and provides their opinion as to who might succeed at trial, or what the outcome may be. Armed with that information, parties can go ahead and negotiate a settlement.

Each of these different types of ADR has its’ pros and cons and will be more suitable in certain types of situations. However, the important thing to bear in mind is that the court will expect parties to have attempted some form of settlement (unless there is a legitimate reason not to have done so).

Conclusion

The reality is that litigation can be unpredictable and costly, and it is not always about ‘winners and losers’, particularly when it relates to family disputes and inheritance. A party may ultimately win a claim but at the expense of a family relationship. Further, the range of awards which can be made mean that it is difficult to advise clients as to their ultimate outcome.

As such, it is not about knowing that you may be right but there are other practical reasons which should always be considered when deciding whether to engage in ADR or proceed to trial.

Further information 

If you would like to discuss any of the topics raised in this blog, please contact the author or a member of our Wills, Trusts and Inheritance Disputes team.

You may be interested in our Wills, Trusts and Inheritance Disputes web pages.

About the author

Laura Phillips is a Senior Associate in our Dispute Resolution team.  Laura has particular expertise in Wills, Trusts and Inheritance Disputes but also has a broad range of litigation experience.

Laura’s experience in the area of Wills and Inheritance Disputes  includes challenging wills on the basis of lack of testamentary capacity, want of knowledge and approval, fraud, forgery and undue influence, and includes dealing with multi-jurisdiction estates with a multi-cultural aspect.