Well, the Supreme Court gave its judgment on this elderly case this morning, and decided that the District Judge who heard it the first time, back in May 2007, got it right, and that all the other hearings in between – two in the High Court and two in the Court of Appeal – got it wrong. So Mrs Ilott got £50,000 from her mother’s £486,000 estate, and the animal charities got the rest. The costs of the exercise would need to be provided for, of course, although Mrs Ilott’s team were acting pro bono throughout. However at least there is now an authoratitve decision on the area of law in question – well one would hope so, but I’m not so sure about that. More on that later.
How We Got Here
Let’s start by going back to basics. The brief facts are that Heather Ilott was the only child of Mrs Jackson, and ran away with her boyfriend, whom she subsequently married, when she was aged 17. Her mother never forgave her , and there was virtually no contact between them until her mother’s death 26 years later. During this time Mrs Ilott had 5 children, and lived with her husband in difficult financial circumstances, depending largely on state benefits, and living in social housing. When she died, the mother’s last will left virtually all her estate to three animal charities, with whom she had no prior connection, and nothing to her daughter, and indeed a direction to her executors to resist any claim made by her daughter.
The daughter made a claim for a share of the estate under the Inheritance (Provision for Family and Dependents) Act 1975 (“the 1975 Act”). This allows various people – spouses, former spouses, children, and people being financially supported by the deceased – to make a claim on the grounds that the will and/or intestacy provisions did not make reasonable financial provision for them. But in the case of an applicant other than a spouse reasonable financial provision is restricted to reasonable financial provision for their maintenance. And the Act set out in s3 a number of matters which the court must take into account when it makes an order. These include:
(a)the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
(b)the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future;
(c)the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
(d)any obligations and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased;
(e)the size and nature of the net estate of the deceased;
(f)any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased;
(g)any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.
The court hearings (all of which were under the name of Ilott v Mitson until the SC hearing) were:
- DJ Million – awarded Mrs Ilott £50,000 (about 10% of the fairly modest estate) as being an appropriate amount in the circumstances. She appealed for more and the charities cross-appealed on the grounds that she should get nothing.
- King J – allowed the charities’ appeal and dismissed the claim. Mrs I appealed.
- CA – allowed Mrs I’s appeal. Case sent back to H Ct to deal with Mrs I’s appeal on quantum.
- Parker J – dismissed Mrs I’s appeal on quantum and reinstated the DJ’s award. Mrs I appealed.
- CA – allowed Mrs I’s appeal, held that the DJ had made serious errors of law, and substituted an award of £143,000 (to buy her social housing house) and a further £20,000. The charities appealed.
- SC – appeal allowed. DJ’s award of £50,000 reinstated.
The Supreme Court Decision
This runs to 66 closely argued paragraphs and came out this morning, so I’m not going to analyse them in detail here. If you want that there are a number of other articles out already, and there will no doubt be more soon. However, the important points are:
- Maintenance has an established meaning and means provision to meet everyday living expenses, more on an income basis than a capital basis, and at an appropriate level – not limited to subsistence levels.
- Reasonable Financial Provision is an objective test. You look at what the result is, and not whether the deceased was unreasonable, or the applicant was disappointed. The case of In re Coventry got it right:
It is not the purpose of the Act to provide legacies or rewards for meritorious conduct. Subject to the court’s powers under the Act and to fiscal demands, an Englishman still remains at liberty at his death to dispose of his own property in whatever way he pleases or, if he chooses to do so, to leave that disposition to be regulated by the laws of intestate succession. In order to enable the court to interfere with and reform those dispositions it must, in my judgment, be shown, not that the deceased acted unreasonably, but that, looked at objectively, his disposition or lack of disposition produces an unreasonable result in that it does not make any or any greater provision for the applicant – and that means, in the case of an applicant other than a spouse for that applicant’s maintenance. It clearly cannot be enough to say that the circumstances are such that if the deceased had made a particular provision for the applicant, that would not have been an unreasonable thing for him to do and therefore it now ought to be done. The court has no carte blanche to reform the deceased’s dispositions or those which statute makes of his estate to accord with what the court itself might have thought would be sensible if it had been in the deceased’s position.
- The questions to ask are normally: (1) did the will/intestacy make reasonable financial provision for the claimant and (2) if not, what reasonable financial provision ought now to be made for him?
- These are essentially questions giving a large amount of discretion to the trial judge, and the Act plainly requires a broad brush approach from the judge to very variable personal and family circumstances.
The court went through the history of the case and in particular the decision of the CA that was under appeal. This identified two apparent errors in the original decision of the DJ, and therefore felt able to set his decision aside and look at matters anew. These were:
- He stated that as Mrs I had no expectation of receiving anything from her mother’s estate, and lived modestly, and within her limited means, any provision now must be limited. However he didn’t explain what the provision would be otherwise and how it was being restricted, and this breached the requirement to give a full reasoned judgment.
- And he did not know what effect the award of £50,000 would have on her state benefits. He made a working assumption …that the effect of a ‘large capital payment’… would disentitle the family to most if not all of their state benefits, Failure to verify this assumption undermined the logic of the award.
The SC disagreed strongly with the CA’s views on both of these matters. On the first they said (para 35) that such a two-fold explanation was quite unnecesary.
But without going through any such exercise, and yet adhering to the concept of maintenance, a judge ought in such circumstances to attach importance to the closeness of the relationship in arriving at his assessment of what reasonable financial provision requires. In the paragraphs leading up to the one criticised by the Court of Appeal, this Judge had dutifully worked his way through each of the section 3 factors. The long estrangement was the reason the testator made the will she did. It meant that Mrs Ilott was not only a non-dependent adult child but had made her life entirely separately from her mother, and lacked any expectation of benefit from her estate. Because of these consequences, the estrangement was one of the two dominant factors in this case; the other was Mrs Ilott’s very straitened financial position. Some judges might legitimately have concluded that the very long and deep estrangement had meant that the deceased had no remaining obligation to make any provision for her independent adult daughter – as indeed did Eleanor King J when it appeared that she had scope to re-make the decision. As it was, the judge was perfectly entitled to reach the conclusion which he did, namely that there was a failure of reasonable financial provision, but that what reasonable provision would be was coloured by the nature of the relationship between mother and daughter.
On the second the DJ had been presented with a wholly unrealistic wish-list by Mrs I’s counsel at the first hearing, which he described as “unhelpful” and disregarded it. However, the DJ sat regularly in the Principal Registry of the Family Division and had a good working knowledge of the effect of awards of capital on the state benefits of the recipients. Although he had not been given formal evidence on the benefit position, he had been given evidence which showed that Mrs I was managing to pay her way by failing to spend anything on the replacement and repair of the ordinary household belongings;
Mrs Ilott made a strong case for the necessity of spending a substantial sum on items which could properly be described as necessities for daily living. They included such things as essential white goods, basic carpeting, floor covering and curtains, and the replacement of worn out and broken beds. That list did not include other similar necessities such as a reliable car, nor a holiday.
In the circumstances an award of £50,000 would allow her to carry out these replacements, and this kind of necessary replacement of essential household items was not such an indulgence; rather it was the maintenance of daily living. Furthermore reasonable expenditure of this type would rapidly reduce the family’s capital below £16,000 where the cut-off for various benefits occurred. So there was nothing wrong with this part of the award either.
As the CA’s criticism of the DJ’s decision was wrong the appeal was allowed, and the DJ’s award restored. The court emphasised that the long period of estrangement had to be taken into account, although exactly how was a matter for the trial judge, and that the award under appeal, giving Mrs I about 1/3 of the estate, did not do so adequately, while an award of £50,000 did.
And there was a supplementary judgment by Lady Hale (who agreed with the main judgment as well) setting out some history, and a number of studies and reports, and a strong plea for a revision to the Act to give greater guidance to the weight to be given to the various factors set out in s3 of the Act, especially in the case of an able-bodied adult child.
And the Guidance?
Fortunately the SC can’t rabbit on for 66 paras without giving some guidance to the rest of us, and there are various things here, which I’ve tried to set out above. But the result does seem to me, at least at present, to be disappointing. We had hoped that something would have been said about the way to weigh up the various factors, and we have just ended up being told that it is a matter of judicial discretion, that different judges might decide in different ways and still be correct, and that legislative intervention is required. Not a matter of the highest priority in these Brexit-filled times.
It is useful to have the emphasis placed on the elements of “maintenance” and the fact that the test is an objective one. It is also helpful for the CA’s enthusiasm for rewriting wills to be reeled in a bit, because it makes it easier to predict, at least in broad outline, what a court is going to do. The charities are no doubt pleased with the result, and Mrs Ilott must be wondering why she appealed the 2007 decision in the first place. But it is a long way from answering all the questions, which we had been hoping for. Still, it preserves some uncertainty upon which those of us in practice can make a living – you never litigate in areas where the law is entirely clear, do you?
This is the case about the lady who cut out her only daughter from her will and left everything to some animal charities. The courts varied this under the Inheritance etc Act and after various hearings the case eventually reached the Supreme court just before Christmas. I have mentioned it on a number of occasions – here here and here.
The case changed names when the Executor defending the will died, as an added complicating factor.
Anyway, the judgment will be out tomorrow at 9.45, and as the decision, whichever way it goes, will give a lot of very authoratitive guidance on how courts implement the law, so there is bound to be a lot of comment afterwards. And I’m sure that I will add another piece here. But not for a day or two,
You will have noticed the case in the CA today which refused to allow a Civil Partnership between a heterosexual couple – Steinfeld & Keiden v SoS I’m not sure quite where this is going or why they wanted a Civil Partnership rather than a marriage, but it is part of a larger question – how to deal with cohabiting couples, who have far fewer legal rights and a lot less protection than they think.
I wrote a piece on this some time ago when there was the suggestion of having a Cohabitation Rights Bill. If you are interested in the legal aspects than by all means go back and have a look. However, the final part of the piece is worth reading again now.
I have a proposal which would make a real difference to cohabitation in future.
Parties intending to live together permanently should enter into a “cohabitaton agreement” which would give them significant enhanced rights. The agreement would not be compulsory but should be encouraged by say tax benefits and social pressure. After a time I would expect it to become normal and for people who did not do so to be a small minority.
The agreement could be fairly short, and merely require the parties to live together and look after each other to the exclusion of third parties. In order to make it more attractive and romantic you could include phrases about “in sickness and in health” and “to love and to cherish”.
The parties should make the agreement by saying the words out loud before some state official and in the presence of at least two independent witnesses. This way there could be no argument about whether they consented to it or not. They may give each other small gifts such as a ring. Then they would all sign a register. Clearly this will need to be set up beforehand, and they will no doubt get their families and friends to attend. There may be some singing or at any rate music, and everybody will no doubt go off for a few drinks or even a full-scale party afterwards.
The basics would only cost a couple of hundred pounds, although if you wanted to pay more then nobody would stop you. Your parents may well chip in, and of course everybody would dress up. It may become fashionable or indeed standard for the woman to wear a fancy dress of a distinctive colour, and the man would wear a very smart suit which he may have to hire.
Afterwards the parties would have all the rights and privileges of a married couple. As indeed they would be.
You cannot be serious!
Well perhaps not. But I think a lot of people have overlooked the distinction between a marriage and the wedding. You don’t need a vast multi-thousand pound celebration to be married, but you do need to enter into some basic commitments if you are going to live together for the long term. Societies have had marriage for thousands of years and they can’t all be wrong. Perhaps the problem today is that we have the solution to the difficulties of cohabitation right in front of us and can’t see it.
Perhaps this doesn’t help Miss Steinfeld and Mr Keiden, but I can’t do everything.
Lawyers are often asked by their clients what they think about an offer that has been made by the other side. This is one of the most difficult parts of lawyering, but one of the most rewarding, and when I do this I feel that I am really earning my fees.
Because there are no end of factors to take into account. Some of the more obvious are:
- How the offer compares with the amount claimed
- What your chances of success are
- How these will affect the likely result – might you lose, or only win less
- And how much this depends on inponderables – like how key witnesses do at trial, or what the undisclosed documents might show
But you rapidly get on to more complicated areas:
- Will the other side pay the amount of the offer?
- Will they be able to pay any judgment for more?
- Can your client afford to take the case to trial?
- Can your opponent?
And then there is the nature of the advice that you give:
- You need to give a young, inexperienced client more advice than an older, wiser one
- But if the client has little money you can’t spend too much time or money in doing this
- Some problems are legal and need detailed explanation
- Some are really matters of business and more for the client to decide
However, few clients are aware of the possible cost, or risk, of substantial litigation, and most need to be advised on this, so that they can make an informed choice on what they want to do.
Of course, not all clients have the same goals. Some want certainty, and a rapid settlement even if they might get more by pushing on. Others want to get the most possible, even if they are taking a lot more risk of failure, or significant irrecoverable expense.
No, advice of this sort is where litigators really earn their money, and it was in the spotlight recently in the case of Graham Seery v Leathes Prior EWHC80(QB) which was a professional negligence claim against a firm of solicitors in Norwich by a disgruntled client who settled a claim, with their advice, and then felt that he might have got more if he has pushed on a bit further.
What I always like about this sort of thing is the chance to read the letters of advice written by other lawyers. This one, written by Dan Chapman, was a cracker. It was given against a background of a very slippery opponent, and a claim against a company wth a doubtful financial position. The Claimant had been made offers from the other side that were getting up to £310,000 but negotiations were stalling and a decision had to be made on whether to take the offer, or make tactical steps which might get more. Part of a letter quoted in the judgment reads:
“… I have a strong feeling that we might be at the end of the road in these negotiations; I know my counterpart feels that his clients are also being ’emotive’ about the dispute and thus perspective is being lost. He feels also there is not likely to be any more movement from his clients, rightly or wrongly.
So I suggest you discuss the current offer – which totals 310k with 210k being paid up-front (I think we should be able to reallocate the figures to get it all net, so assume this for the time being) and the remaining 100k paid over 18 mths with interest – with your wife tonight. It seems to me a huge financial decision for you and your family; if we reject this now I think we will be tied down to litigation for sometime. We will need to fight the Tribunal claim, issue winding up petitions and, to gain any real value (since the Tribunal claim is worthless in real terms), issue (and succeed on) a High Court unfair prejudice claim. The costs will be enormous (not by SJ Berwin standards, of course, but huge nonetheless) and no guarantee of any return whatsoever if FWA go bust in the meantime (or manage to reallocate their assets). So take some time to seriously consider your options, and check that you and your wife are comfortable with where we are going – as I say, my very strong hunch (and I am usually right on these things) is that their offer is now their final offer. Of course, that doesn’t make it right or mean you should accept it – but I need to advise you of the consequences of rejecting what might well be their final offer. As experienced litigators, we tend to have a feel for how these sort of cases pan out, and you don’t pay me to tell you what you want to hear, but what I would advise. In this particular case, if it were me then I would accept the offer, bank the cash (as galling as it undoubtedly is to you) and get on with my life. But it is not me who is living this case, and I shall do whatever you instruct me to do!
Please don’t misunderstand me – I (and my firm) will be more than happy to fight this all the way. However, I have a duty to ensure that you (and your family) are fully aware of what you are getting yourselves into. I don’t want to be walking out of the High Court in 2 years time, telling you that whilst we have won the total damages you are able to recover from FWA amount to zero since the company has gone into liquidation, and then handing you my firm’s bill for 70k, at which point you might wish you had accepted the 310k on offer! You would not be too pleased with me, either, if I had not have advised (sic) you to accept that 310k! And then I would be getting sued for negligence!”
All excellent stuff, especially the bit that I have emphasised.
In the light of this you won’t be too surprised to hear that Sir David Eady, an immensely experienced judge, now sitting in retirement, dismissed the claim. A warmer judge (Sir David being notoriously unemotional) might have congratulated the solicitors on the quality of the advice given. I do so here, for what it’s worth.
Aurel Sari: Biting the Bullet: Why the UK Is Free to Revoke Its Withdrawal Notification under Article 50 TEU
Not my normal area of interest, but a very good piece here by Aurel Sari of the University of Exeter on whether an Art 50 notice can be revoked.
‘There is no going back.’ These were the words of Lord Pannick, uttered before the High Court in response to the question whether the United Kingdom could rescind its notification to withdraw from the European Union once issued under Article 50 TEU (Santos and M v Secretary of State for Exiting The European Union, uncorrected transcripts, p. 17). The claimants and the Government appear to agree on this point and accept that the UK cannot reverse its notification of withdrawal.
It is easy to see why this position should be attractive to both parties. For the Government, it means that once the notification has been issued in accordance with the UK’s constitutional requirements, it would be shielded from any subsequent domestic legal challenge. For the claimants, the irreversibility of the withdrawal notification is of ‘vital importance’ (uncorrected transcripts, p. 14). It is this irreversibility which…
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You will remember that the Government decided that illegal immigrants would be deterred from coming to Britiain (or more specifically England) if they weren’t allowed to rent a place to live, or take lodgings, or indeed to stay in anybody else’s rented flat or house. They set up the Right to Rent provisions, which originally just covered the Midlands – see my piece here – and then extended them to the whole of England (but not Wales, Scotland or Northern Ireland) – see here.
The original penalty on landlords, and their agents, who didn’t carry out the necessary checks was a civil penalty of up to £3,000 per immigrant. However, somebody thought that this wasn’t severe enough, and as from 1st December 2016 landlords who knowingly let to people who don’t have a right to let can be prosecuted, along with their agents, and fined or imprisoned for up to 5 years. So it is vitally important to not only carry out the checks, but be able to prove that you have done so.
However, there is another way out of a criminal conviction. If the landlord takes steps to evict the offending tenant within a reasonable time – defined in the statutory guidelines as 3 months from discovering that they had no right to rent – then no offence is comitted.
The landlord can of course take the normal steps to evict the tenant, such as serving a s21 notice, but he (or she) has been given two new weapons by the Immigration Act 2016:
- Ground 7B – inserted into the Housing Act 1996. This allows the landlord to end a tenancy, even during a fixed term, by serving an appropriate s8 notice, waiting 14 days and then bringing possession proceedings in the County Court in the normal way. If not all the tenants are prohibited from renting the Judge can either end the whole tenancy, or he can alter the tenancy so that it is transferred to the legal occupants only, provided the illegal occupants leave. It’s complicated to explain but here is the provision in the Act. There is an equivalent provision for the (very) few remaining Rent Act tenancies.
- A 28 Day Notice – This is most unusual. If the Home Office send a formal notice to the landlord telling them that their tenant or all of their joint tenants in one property are renting illegally then the landlord can serve a prescribed notice unded s33D(3) on the tenants, giving them 28 days’ notice to end their tenancy. After the 28 days are up the tenancy comes to an end, the occupants lose their rights not to be evicted without an order of the court, and the landlord can either exclude them peacefully, or get them removed by a High Court Enforcement Officer, because the notice can be enforced “as if it were an order of the High Court” – see here.
We shall see how this all works, but I don’t think the courts are going to be very happy with the way in which the Minister can serve a notice, and the landlord can get it enforced as if it were an oreder of the High Court, all without involving the courts at all.
New s8 Notice
Because there is a new ground for possession under s8 Housing Act, there is a new prescribed form of s8 Notice, whoch must be used in all cases from 1st December 2016 onwards, which refers to s41 of the Immigration Act 2016 in the heading, and to ground 7B a few times in the text. It must be used in ALL CASES even if the claim is based on non-payment of rent or whatever, or it is invalid. So if you are a landlord or a tenant, or advise either of them, do check the notices that are used from now onwards, or the court won’t make a possession order. The new form of notice is here.
As usual these matters are covered in more detail elsewhere, and probably the easiest to follow is on the Landlord Law Blog. But at least you know there’s a problem here.
Well, its been and gone. The hearing lasted one day on 12th December and the decision will be out some time in the New Year – if not too badly delayed by the Brexit kerfuffle, we hope.
PS As at 22.2.17 no sign of the judgment coming out.