Is a solicitor under a duty to warn their client of risks falling outside their retainer?
In 2015, there were 164 contested probate cases brought to the High Court. Of those cases, 116 were claims made under the Inheritance (Provision for Family and Dependants) Act 1975 ("the 1975 Act"). We await the 2016 statistics with interest but numbers aside it has certainly been another busy year for Will disputes culminating with the Supreme Court granting permission to appeal, and subsequently hearing in late December 2016, the case of Ilott v Mitson.
This was the first time that a case under the 1975 Act had been heard by the Supreme Court (or its predecessor the House of Lords). The judgment in Illott v Mitson is expected to be handed down in early 2017 but in the meantime I set out below some of the more interesting decisions in the contested probate sphere in 2016.
On 12 February 2016, the Central London County Court dismissed a claim bought pursuant to the provisions of the 1975 Act by the Deceased’s wife, Thandi Wooldridge, for further financial provision. The Court looked at the usual Section 3 factors, including the additional factors for a spousal claim, namely the age of the applicant, the length of the marriage and the contribution made by the applicant to the welfare of the family of the deceased.
In this case, Ms Wooldridge had inherited the family estate worth approximately £4.25 million and a further £1.6 million in other assets but sought to argue that she had an annual expenditure need of £372,000 and such financial provision was therefore not sufficient.
The Defendants to the claim, the Deceased’s two sons, argued that such a claim was entirely disproportionate and that there was only “a finite pot” of money available.
Her Honour Judge Karen Walden-Smith held that “the Will does make reasonable provision for [Ms Wooldridge] and the estate does not have the liquidity which would enable [Ms Wooldridge] to recover that which she seeks without the need to sell partnership assets, and possibly sell shares in the company, which would be significantly adverse to the interests of [the Deceased’s First Son] and would, in addition, most likely be adverse to the interests of [the Deceased’s Second Son”]. [Ms Wooldridge] has enough.”
It is thought that this is the first time that such a claim by a widow has been dismissed without any further financial provision being awarded. The case highlighted that every claim under the 1975 Act, including those by surviving spouses, will be decided on the facts and circumstances of the case in question. In particular, the starting point ought to always be the factors set out at Section 3, with particular focus on the financial needs and resources of the applicant and the other relevant beneficiaries, balanced against the size and nature of the estate. In this case enough was enough.
In July 2016, the High Court upheld a decision that an individual’s maintenance under the 1975 Act can extend to an arrangement for full consideration. Audrey Blackwell (the Deceased) had bequeathed her entire estate to Lynn Lewis (the Claimant), her only child. The estate was comprised primarily of the Deceased’s home where she had lived with Thomas Warner (the Defendant) for more than 20 years. Ms Lewis issued a possession claim against Mr Warner who responded by making a claim for provision under the 1975 Act.
Mr Warner was entitled to make an application under the 1975 Act having lived in the same household as the deceased throughout the two years up to her death.
Mr Warner was financially secure but, primarily as a consequence of ill health, wanted to stay in the Deceased’s house. At first instance, the court held that Mr Warner should be granted an option to have the property transferred to him. Mr Justice Newey said that the court was right to conclude that the Deceased’s Will had failed to make reasonable provision for Mr Warner and the court was right to compel Ms Lewis to transfer the house.
This case provides room for some interesting discussion as to what constitutes maintenance under the 1975 Act. Mr Warner and Mrs Blakwell were not married but had lived together for nearly twenty years. At first instance, Recorder Christopher Gardner QC said "I am unable to see why the maintenance of a roof over the head of an applicant for 20 years cannot come within the definition of 'maintenance' in s.1(2)(b) of the Act. Its provision had a financial value because, without it, the applicant would have had to rent or buy an alternative roof. Its removal, by there being no provision for the continuance of the same in the reconstituted will, meant, therefore, that it failed to make reasonable financial provision for him".
On appeal, Mr Justice Newey said that ""maintenance" does not seem to me to be necessarily confined to support with a person's "cost of … daily living" ........ It is capable, in my view, of referring to other forms of assistance with the requirements of daily life. If, therefore, a person is in want of a particular thing to sustain a reasonable quality of life, the provision of it could possibly represent "maintenance" regardless of his financial means. In other words, a person can potentially (albeit only very rarely) be in need of "financial provision" for his "maintenance" without being in any way short of money: his money may not be able to secure him what he requires."
What constitutes "maintenance" in 1975 Act claims would therefore appear to remain open to interpretation.
Randall v Randall  EWCA Civ 494
In May 2016, the Court of Appeal held that a creditor of a beneficiary of an estate had a sufficient interest in the estate to dispute the validity of the Will. A husband had agreed with his ex-wife as part of divorce proceedings that if her mother was to die leaving her more than £100,000 by her Will then she would share any excess with him. The husband’s ex wife’s mother subsequently died and left the ex-wife exactly £100,000 (with the remainder passing to her children), which meant that the husband received nothing. The husband sought to challenge the validity of the Will on the basis that it had been improperly executed in accordance with section 9 of Wills Act 1837.
The High Court found that the husband did not have a sufficient interest (as required by part 57 of the Civil Procedure Rules) in the estate to bring a claim.
The Court of Appeal overturned the decision. The husband was required to demonstrate only a “clear and accepted financial interest in the outcome” or a “real interest in challenging the validity of the will”. Lord Dyson emphasised that there is an important distinction to be made between a creditor of an estate and a creditor of a beneficiary of an estate.
The test for standing to challenge a Will is therefore now significantly less exacting than might previously have been considered to be the case, and the class who will possess the threshold considerably wider.
In June 2016, the High Court found that a woman who had left her farm to her son did not lack mental capacity, even though she suffered from dementia, confusion, forgetfulness, aggression memory loss and delusions. Mr Justice Cooke held that delusions were only relevant if they affected the testamentary dispositions made.
In 2005, the testatrix, Mrs Doris Harris, executed a Will. Her daughter, Sian Lloyd, was to receive £10,000 and the remainder of the estate was left equally to her son, John Harris, and his wife, or the survivor of them. The estate was valued at just under £600,000, of which £575,000 was represented by a farm.
Ms Lloyd challenged the validity of the Will on the grounds of lack of capacity and want of knowledge and approval of its terms. Her case was that her mother had begun to suffer mental decline from about 2001. By May 2004, when she was admitted to hospital after a collapse, she was suffering from confusion, forgetfulness, aggression and strange delusions and had developed Alzheimer's type dementia. Ms Lloyd argued the circumstances in which the Will had been prepared without legal assistance were suspicious, and that the Will had not been read to Mrs Harris, who had long-term glaucoma and could not read without a magnifying glass, which she had not had with her on the day of execution.
Although Mr Harris and his wife admitted that Mrs Harris had begun to suffer Alzheimer's type dementia from about the time of her hospital admission in 2004, the court heard that Mrs Harris had not suffered any mental decline either at all, or until 2008 onwards. It was said that the Will represented Mrs Harris’ long stated intention to leave the farm to Mr Harris and the Will had been prepared on her clear and specific instructions. The allegations of Mrs Harris’ wandering, delusions, aggressive behaviour and inability to care for herself were denied. There was nothing in the terms of the Will to cause the court to be especially concerned about whether Mrs Harris had understood them.
The test of capacity derived from the case of Banks v Goodfellow was applied. The court held that however bizarre the delusions had been, it was not suggested that they could have had any effect and it did not indicate a loss of understanding to the extent that Mrs Harris would have fallen below the threshold capacity. It followed from those findings that Mrs Harris had had both the necessary capacity to make a Will, that she had read it and understood its terms and that she had known and approved of the contents.
Ms Harris's Will was not prepared by a solicitor. Had a solicitor have been instructed it is likely that the solicitor would have arranged for medical evidence to prove capacity and for the rationale behind the bequests which differed so greatly in size to have been documented.
The Court of Appeal upheld the Will of an elderly testator despite documentation evidencing a marked decline in mental capacity at the time of execution. The judgment provides a helpful illustration of the way that the courts are approaching testamentary capacity and want of knowledge and approval claims, particularly those where a solicitor prepares the Will.
Mrs Burns died in May 2010. Her last Will, dated 26 July 2005, bequeathed her house in equal proportions to her two sons, Anthony Burns and Colin Burns. An earlier Will, dated May 2003, had provided for all of the beneficial interest in her house to be left to Anthony alone. Anthony challenged the validity of the 2005 Will on the grounds that Mrs Burns lacked testamentary capacity and did not know or approve its contents.
Anthony was unsuccessful at first instance despite seemingly presenting to the court strong evidence as to his mother’s diminished mental state. District Judge Woodburn relied on the rule in Parker v Felgate (1883). He concluded that despite contemporaneous assessments of Mrs Burn’s mental state demonstrating memory problems, the tests were not designed to test her ability to understand a Will. Moreover, witness evidence that Anthony sought to rely on was tempered by vested interests and it was clear that opaque instructions had been given by Mrs Burns in 2004 to prepare the Will that she subsequently executed in 2005. District Judge Woodburn was also of the view that whilst the solicitor responsible for the preparation of the Will did not follow the “Golden Rule”, his experience in drafting Wills meant that he would (“probably”) have been aware had Mrs Burns been suffering from any serious capacity issues.
Anthony appealed the decision on the basis that insufficient weight had been given to the medical evidence, District Judge Woodburn had failed to acknowledge the extent of the drafting solicitor’s failings and the judge had erred in law having failed to have proper regard to the burden of proof.
The Court of Appeal upheld the first instance decision finding that District Judge Woodburn had correctly identified the salient criteria for determining testamentary capacity. The Court of Appeal said that the Golden Rule did not constitute a rule of law but guidance as to a means of avoiding disputes. Whilst the Court of Appeal did express some concern regarding the weight of the medical evidence and the conduct of the solicitor, the judge was on balance entitled to make the findings he did.
The judgment at first instance garnered much criticism but whilst the reasoning and conclusion may have been flawed, it was not so bad to be unjustifiable:
“While throughout consideration of this appeal I have entertained doubts as to the judge’s conclusions in these respects, I consider that the evidence did entitle him to make the findings that he did.”
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