Claim against stepfather's estate

Higgins v Morgan and others [2021] EWHC 2846 (Ch) – stepson successful in Inheritance (Provision for Family and Dependants) Act 1975 claim against his stepfather’s estate and the recoverability of success fees

Myerson’s contentious trust and probate team recently obtained a successful outcome at trial in the case of Higgins v Morgan and others [2021] EWHC 2846 (Ch). Associate Solicitor, Stephanie Ewan, acted for the Claimant, Barrie Higgins, together with Elis Gomer, Counsel at St John’s Buildings Chambers. 

The case is a rare example of a contested Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) claim reaching trial. It features a consideration of the requirements a Claimant must satisfy to qualify for an award under the 1975 Act, “moral claims,” and the recoverability of success fees under a Conditional Fee Agreement (“CFA”). A copy of the judgment can be found on BAILII.

Background

The case concerned the estate of Barrie’s stepfather, Stewart Higgins. Stewart died intestate in 2017, meaning that his entire estate passed to seven distant cousins. No provision was made for Barrie as he was not Stewart’s biological child. It was Barrie’s case that this was contrary to Stewart’s wishes and that he had been assured on several occasions that Stewart was to make a Will in his favour. Unfortunately, no such Will was found, possibly due to his premature death at the age of 59.

Barrie was in a poor financial position when he first contacted Myerson and was dependent upon his wife who is a wedding photographer based in France. Their situation deteriorated further due to the impact of Covid-19 on both the wedding and travel industry. A claim was brought pursuant to section 1(1)(d) of the 1975 Act. The claim was on the basis that the application of the intestacy rules failed to make reasonable financial provision for Barrie. An application for interim provision was made under section 5 of the 1975 Act, resulting in both a lump sum and monthly payments being received.

The claim was defended throughout, with the parties being unable to agree upon the size of the net estate. Although sworn for probate at £480,880 net, Dilwyns Solicitors (who acted for the Defendants) confirmed shortly before trial that the net estate was approximately £168,000. This figure was not accepted, and the judgment is on the basis that the net estate is approximately £195,000 (although this figure could vary due to the nature of the estate). 

Barrie sought provision that would be sufficient to assist with his income deficit for a period of 10 years, pay his debts and provide him with a contingency fund. 

In defence of the claim, the Defendants argued that Barrie had not demonstrated a need for maintenance or that the need was considerably less than what had been claimed. 

Judgment

At trial, the Judge held that it was appropriate to apply the following test when considering a 1975 Act claim: 

  • Whether the Claimant can discharge the burden of demonstrating a need for maintenance and, if so, to what extent?
  • Whether the Claimant can demonstrate that there is “something more” than just the relationship of adult child and parent (or, in this case, stepson and stepfather)?
  • If the above are satisfied, does the application of the section 3 factors demonstrate that reasonable financial provision has not been made for the Claimant?
  • If point 3 is satisfied, what reasonable financial provision ought to be made for the Claimant?

The Judge held that Barrie satisfied this test. In particular, he considered that the assurances provided by Stewart to Barrie resulted in “some form of moral claim” owed by the former to the latter. Other relevant factors included Stewart having a close relationship with Barrie in comparison with the beneficiaries and that there were no obligations and responsibilities owed towards the beneficiaries. An award of £40,800 was made, which included provision for the purchase of videography equipment to assist in the wedding photography business. 

Success fee

Due to his financial situation, Barrie had pursued this claim by way of a CFA, which allowed for a success fee. Following recent case law, including Re H (Deceased) [2020] EWHC 1134 (Fam), [2020] 2 FLR 561, Barrie was also seeking a contribution towards his success fee as part of his provision. This has been a controversial area amongst practitioners as some argue that it should not be allowed because it is contrary to statute which prohibits the recovery of success fees. However, the Judge in Re H held that a success fee could be taken into account in a 1975 Act claim. This is because a success fee is a debt of the Claimant and, therefore a relevant factor under section 3(1)(a). 

The Judge in Higgins v Morgan and others took the same view stating: 

“The overall conclusion that I come to is that I am required to take into account the success fee in considering Mr Higgins’ financial resources and financial needs for the purposes of s. 3(1)(a), but that the policy considerations behind s. 58A(6) CALSA fall within the category of “any other matter” which the Court is entitled to, and in my view should take into account for the purposes of determining the manner in which it should exercise the powers under s. 2 of the 1975 Act.”

The award was therefore increased to £55,000. 

Hirachand v Hirachand [2021] EWCA Civ 1498

Shortly after the draft judgment was circulated, the Court of Appeal handed down judgment in the much anticipated case of Hirachand v Hirachand [2021] EWCA Civ 1498 (the Re H appeal). In a landmark decision, the Court of Appeal confirmed that an award under the 1975 Act can include a lump sum which enables a Claimant to discharge all or part of their success fee. This decision (the analysis of which is similar to Higgins v Morgan and others) has provided some much needed clarity on the issue of the recoverability of success fees in 1975 Act claims. It is now clear that success fees are an increasingly important factor in these cases and something which Defendants cannot dismiss when considering settlement. 

Here to help

Our Contentious Probate Solicitors have considerable experience in 1975 Act claims. If you would like advice on a claim or have any questions about the judgment in Higgins v Morgan and others, please get in touch with a member of our Contentious Probate Team below.

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