When a person is excluded from the will of someone on whom they were ‘dependent’, the Inheritance (Provision for Family and Dependants) Act 1975 provides that the dependent person can apply for ‘reasonable financial provision’ to be made for their maintenance out of the deceased’s estate.

But where such a challenge is made, how are costs recovered? Often where an individual is in need of reasonable financial provision, they may not have the means to pay the legal fees. These are usually managed via a conditional fee arrangement, with the fees payable following the case outcome where the claim is successful. This is often referred to as an ‘uplift’ or ‘success fee’.

Guy Platon looks at the recent outcome of an eagerly awaited appeal, which, whilst being clear to assert that the facts of the matter would be important in any instance, ruled that claimants in Reasonable Financial Provision cases can now look to recover the success fee element of their claim from the estate.

Appeal decisions in this area of law will always get lots of attention, and this is no exception.

The Case – Hirachand v Hirachand & Anor [2021] EWCA Civ 1498

The case concerned an estranged adult child’s claim for ‘reasonable financial provision’ against her deceased father’s estate.

He had passed away and left his entire estate to his wife, the Claimant’s mother.  Under the Inheritance (Provision for Family and Dependents) Act 1975, the daughter was able to claim against the estate for financial provision as is necessary for her ‘maintenance’.

The Court would have to be satisfied that she did not receive such reasonable financial provision from the estate under her father’s Will and thereafter what kind of award to make.

She sought a mortgage free property of £450,000 which was in the region of half the estate (described in the judgement as ‘ambitious’).

To be successful, any such claimant would need to meet the so-called ‘maintenance’ standard, and this can be a struggle for any financially independent adult.

In the initial trial, however, she was successful and what appeared to set it apart was that it was accepted she had longstanding mental health problems which had a severe impact on her daily life and had what was described as a very modest income, all of which can be taken into account.

She received an award of £138,918 at the initial trial.  This was by definition made for her maintenance but as we can see this term is sometimes loosely applied as it comprised of £15,000 for ‘white goods’ and a replacement car.

Particularly of note however was that the daughter also recovered her ‘uplift fee’ directly from the estate as well (or at least a contribution towards it), this amounted to £16,750, based as it was on a 25% percentage uplift of her costs.

On Appeal

The appeal considered the facts and allowed the uplift fee of £16,750.

The way that the uplift fee ties in with a maintenance award is that ‘payment of debts may form a legitimate part of a maintenance award’.

It was noted that there was a definite tension between the two positions and the potential injustice to the losing party, given that the uplift fee was not their ‘fault’, was reflected in the cautious and ‘modest’ 25% contribution.

What this Means

The uplift or success fee is a hallmark of the no win no fee agreement and is based upon an additional fee payable to the solicitors, calculated as a percentage of the total costs, which accounts for the solicitor having taken all of the financial risk of an action.

Since 2013, the position is that usually the success fee is not recoverable from the losing party but is payable by the winning party/the party to the agreement.

However, under these sorts of claims the uplift is sometimes payable from the losing defendant/or out of the estate so it therefore amounts to an exception to the rule.

In any event, the decision was appealed on a few grounds. The most noteworthy being the uplift fee.

What perhaps sets these cases apart is that any award is calculated according to the claimant’s level of maintenance and therefore it seems counter intuitive and illogical that the success fee would be removed from the funds that had been set aside for their maintenance.

This decision provides some clarity in an area where authoritative decisions are quite rare but which poses a conceptual problem for some as arguably the funding of a claim has to be kept separate from the issue of the maintenance needs of a party.

If you have been excluded from the will of someone on whom you were ‘dependent’, you may be able to apply for reasonable financial provision.

At Watson Ramsbottom we are experienced in handling such matters and familiar with the different methods of funding a claim and will discuss these with you at our initial meeting.

Guy specialises in disputes arising from inheritance and probate, including the interpretation of Wills. He can be contacted directly at guy.platon@jameso193.sg-host.com or by telephone at 01254 67 22 22.

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