On 21 and 22 January 2021 I was involved in a two-day virtual trial before Recorder Williamson QC. I acted on behalf of the Claimant in bringing a claim against the estate of her late father under the Inheritance (Provision for Family and Dependants) Act 1975. James McKean of New Square Chambers acted as the barrister. Although only in the county court and not a substantial claim or estate, the claim is important as very few adult child claims under the Act go to trial. Usually, such claims are settled long before trial, either by negotiation or some form of Alternative Dispute Resolution (mediation especially), the risks of proceeding to trial on such claims and having to pay your opponent’s costs are usually enough to encourage parties to settle the claim.
In Rochford, the Claimant was an adult child who brought proceedings under the Inheritance Act on the grounds her late father’s will failed to make reasonable financial provision for her and she had an ongoing need for maintenance. It was necessary to issue court proceedings early on to avoid missing the very tight deadline for doing so and the claimant then started to try and resolve the claim with the Defendant. Quite unusually for these types of claims, the Defendant adopted an overly detailed approach to financial disclosure requesting excessive amounts of documents to be disclosed. She also strongly resisted attempts to attend mediation or settle the claim. The Defendant was so convinced that the Claimant’s claim would lose that she failed to take steps to protect herself against having to pay the claimant’s costs if she lost. Lose she did and at trial the Judge considered she had failed to make reasonable attempts to settle the claim at an early stage. The judge made a capital award for the claimant and ordered costs against the Defendant.
Ms Rochford was the only child of Mr Kenneth Rochford. Kenneth and his wife, our client’s mother, were divorced when Ms Rochford was young. Father and daughter maintained a close relationship through the years albeit in his latter years Kenneth lived in Lincolnshire and Ms Rochford lived in Essex. Ms Rochford was a single parent and had to retire from work in 2000 as a result of a rare genetic back condition. In 2016, which was a particularly low point in Ms Rochford’s life, whilst Ms Rochford’s son was in hospital, her father had tried to contact her by telephone but had been unable to do so. Ms Rochford later discovered he had been calling an old telephone number. As a result of this lack of contact Mr Rochford wrote his daughter a very hurtful letter in December 2016 implying he wanted nothing further to do with her. He later changed his will to leave her a legacy of only £25,000 with the bulk of his estate going to his sister. Ms Rochford was very hurt by the letter and accordingly contacted her father in 2017 to explain the situation and attempted to rekindle their relationship, which they subsequently did. Unfortunately, Kenneth died in 2018 without changing his Will. My client received only the £25,000 legacy.
Following her father’s death, Ms Rochford brought a claim against his estate as an adult child under the Inheritance Act for financial provision. She claimed she would have a drop in income for seven years when her income protection insurance ended but before she became entitled to receive the state pension.
The defendant (Mr Rochford’s sister) defended the claim. The claimant took steps to try and reach a compromise and avoid the need to attend court. She proposed mediation at an early stage but the defendant refused on various grounds including; that the claim was hopeless and that the claimant had provided insufficient financial disclosure of documents. In these types of claims, whilst disclosure of financial documentation is required at the start of the matter, this disclosure is limited to what is required in support of the claim and in view of the relatively small amount of the estate (circa £190,000) there is a requirement on parties to ensure their costs are not disproportionate to the amount in dispute.
By way of disclosure the claimant had provided months of bank statements, copies of her spending habits, details of loans, copies of her income protection insurance, details of the state pension shortfall and other information but the defendant argued this was insufficient and she could not understand the claimant’s financial position from the information provided. After extensive disclosure had taken place the defendant finally agreed to attend a mediation by which time the matter had been listed for trial and the legal costs of the parties had probably become a bar to settlement.
The matter did not settle and was heard at a two-day virtual trial on 21 and 22 January 2021.
At trial, the claimant was successful. Recorder Williamson QC considered the various factors in the Inheritance Act and awarded her £85,000 in addition to the £25,000 legacy she already received under the will. In addition, because the claimant had ‘beaten’ an offer made under part 36 of the Civil procedure Rules in August 2019, he made a costs order in her favour of:
- Costs on the indemnity basis (higher rate) from September 2019,
- An additional 10% on top for beating the offer,
- Interest of 5%,
- An interim payment of £60,000 towards costs on the grounds the costs should be assessed if not agreed.
The judge considered the defendant’s arguments on disclosure and reasons for her failure to mediate at an early stage but was not impressed. He stated that these types of matters should consider mediation at an early stage especially where the estate is of a low value. In respect of disclosure, he considered that in cases where the parties involved are not of substantial means such arguments were not warranted. In this matter there were no complex trusts or offshore accounts and these were not super wealthy people. The defendant therefore could have taken a view on the amount of disclosure required. Notwithstanding it was the claimant’s beating of her part 36 offer that justified the making of the costs order.
The Rochford cost decision is a stark warning to defendants whose belief in the strength of their claim spurs them on to a trial without considering the litigation risk or the need to make reasonable attempts to settle a claim. Inheritance Act claims are fact specific with each case considered on its own merits and the court has a wide discretion as to whether to make an award. What is clear from the Rochford decision is that the court is not overly impressed with tactical arguments on disclosure or refusal to mediate, especially where the estate is a low value estate. In Rochford, the defendant argued she was unable to mediate because of a lack of disclosure, despite considerable disclosure having been provided. The judge was unimpressed with this argument and adopted a more pragmatic approach to disclosure. The judge considered that the parties were not super wealthy people and unless there was some suggestion that monies were being hidden (there was not) then he was not overly interested in such arguments.
Therefore, when faced with either bringing or defending a claim under the Inheritance Act, clients should be aware of the litigation risk and the associated costs. Whilst my client was successful in this claim, she still took steps to try and resolve the dispute before it ever reached trial, which is a practice actively encourage by the courts. The risk is far worse for defendants who have little choice in whether a claim is brought and usually have to seriously consider whether to make offers of settlement or attend mediation at an early stage.
It is always best to seek early legal advice from specialist solicitors who are ACTAPS (Association of Contentious Trusts and Probate Specialist) qualified to avoid incurring substantial costs. The Burnside Partnership is able to offer empathetic, constructive and realistic advice together with funding options for such types of claims.