Roman Kubiak discusses recent judgments where success fees have been awarded to a claimant under the Inheritance (Provision for Family and Dependants) Act 1975, and how “moral claims” to estates are evidenced.
Higgins v Morgan and Others  EWHC 2846 (Ch)
Many readers will have seen the Court of Appeal decision of 15 October 2021 in Hirachand v Hirachand  EWCA Civ 1498 which has been widely reported and commented upon over the past few weeks.
Hirachand confirms, if there was any doubt, that the success fee element of a conditional fee agreement (CFA) can be recoverable as part of an award under the Inheritance (Provision for Family and Dependants) Act 1975 (‘the Act’).
For a more detailed background on this issue and the law, readers should read my article of June 2020 in which I discussed the first instance decision (Re: H  EWHC 1134 (Fam)).
In short, however, the Court of Appeal justified its decision to make such an award and sought to reconcile the potential conflict with section 58(A)(6) of the Courts and Legal Services Act 1990 (as amended by section 44 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012) by treating the contribution towards the success fee not as a recovery in respect of a costs order but, rather, as a settlement of a ‘debt’. This way, the success fee can – the court said – be treated as comprising a claimant’s financial needs within the meaning of section 3(1)(a) of the Act.
A less well-known, but equally interesting, decision followed less than a week later in the county court decision of Higgins v Morgan and Others  EWHC 2846 (Ch), the trial and draft judgment of which were heard and circulated respectively before Hirachand but the final judgment of which cited the latter case.
Higgins was a claim by Barrie Higgins under section 1(1)(d) of the Act as a person who was treated by the deceased, Stewart Higgins, as his child.
The 30 page judgment sets out the contextual background to Barrie’s claim well but, briefly, Barrie sought to claim reasonable financial provision for the payment of historic debts, a “capital cushion” of £20,000 to deal with contingencies, lump sum capitalised maintenance for 10 years and his success fee, which was 100% for trial.
The three areas of particular interest in this case were:
- the judge’s treatment of the success fee
- the consideration of a “moral claim” by Barrie or, to use the phrase adopted by HHJ Cawson QC, himself adopting the language of Lord Hughes in Ilott v The Blue Cross and others (No. 2)  AC 545, “something more”
- the conduct of the solicitor executor, the named first defendant in the claim
The success fee
The judge was directed to Re: H by counsel for Barrie who submitted that a claimant’s potential liability under a CFA was a relevant factor in determining their needs and so an award for reasonable financial provision should include the success fee element.
Counsel for the defendants argued that Re: H should not be relied upon as there had been no real legal argument regarding the recoverability or otherwise of the success fee, the defendants having appeared in person, and that an award which provided for a contribution towards the success fee would undermine the policy decisions behind section 58A(6) of the Courts and Legal Services Act 1990, as amended.
Ultimately, the judge was more convinced by the claimant’s submissions, a point which was later, in his view, further vindicated by the subsequent Court of Appeal decision in Hirachand which, of course, affirmed Cohen J’s first instance decision.
Subject to evidence that the success fee would become payable, the judge ordered a contribution of £14,200 towards Barrie’s success fee. In what may be seen as a frustrating decision, instead of applying a scientific approach to assessing the amount of contribution, the judge instead felt entitled “to take a rather broad view”, taking into account the size of the estate, the likely success fee and the likelihood that this would be negotiated down in any event between Barrie and his solicitors.
There has been much debate about the extent to which an adult child must evidence a “moral claim” in a claim under the Act particularly following the decision in Re Coventry (deceased)  Ch 461.
In the leading decision in Ilott, Lord Hughes sought to clarify the decision in Re Coventry when he affirmed that:
“in the case of a claimant adult son well capable of living independently, something more than a qualifying relationship is needed to found a claim, and that in the case before him the additional something could only be a moral claim.”
This has been termed the “something more” in the context of claims by adult children and adults treated as children of a deceased and was a factor to which the judge in Higgins gave weight. Indeed, there were a number of factors which, in his view, amounted to “something more” and included:
- the closeness between the Deceased and Barrie;
- the fact that the Deceased intended to fund the purchase of video equipment for Barrie to allow him to pursue a business with his partner; and
- the Deceased having expressed a desire to benefit Barrie in a will, despite having actually failed to do so.
As such, HHJ Cawson QC felt that this was a claim founded on more than just a qualifying relationship and need for maintenance.
Solicitor executor’s conduct
The judge was especially critical of the solicitor executor in this case.
He noted how “Mr Morgan was initially reluctant to confirm the contents of his witness statement, merely being prepared to confirm that it was “a witness statement” rather than his witness statement” and how his statement “inappropriately, sets out what are in effect submissions in relation to the claim”.
While most practitioners will be well aware of the position, it bears reminding that a personal representative’s duty in the face of a claim under the Act is one of neutrality and their role in any proceedings is generally limited to the provision of information regarding the estate and its beneficiaries in accordance with Section IV of Part 57 of the Civil Procedure Rules and the associated Practice Direction.
That is because a claim under the Act is not a hostile claim to the estate itself but, rather, a claim to establish the proper distribution of that estate such that a claimant under the Act may, if they are not already, become a beneficiary to that estate and so will be owed fiduciary duties by the personal representatives. This differs, say, to a hostile claim against an estate by a third party.
While a personal representative who is a beneficiary can defend a claim under the Act in that separate capacity, as a personal representative they must remain neutral.
Ultimately, HHJ Cawson QC cautioned that the solicitor’s conduct “was not a satisfactory state of affairs, and may have to be revisited on the question of costs”.
Ultimately, the court awarded Barrie £55,000, subject to evidence regarding the success fee.
The judge also clarified in the final judgment that this award was in addition to interim payments which had been made to Barrie under section 5 of the Act totalling some £12,000.
Though only a first instance decision, the case demonstrates that the courts now seem to be comfortable in awarding claimants a contribution toward their success fees, a trend which, given the Hirachand decision, looks set to continue.
It also acts as a stark reminder that personal representatives must adopt a neutral stance in claims under the Act and that, in the case of adult children or adults treated as children of the deceased, while not a pre-requisite to a successful claim, it will often help if one can show “something more”.