The Court of Appeal has overturned a High Court decision which prevented a widow from being able to bring an out of time claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) against the estate of her late husband.
Mr and Mrs Cowan, who had been in a relationship since 1991, married in 2016. Shortly after the marriage, Mr Cowan updated his Will to leave the majority of his estate in two trusts:-
- A business property trust containing all of his business assets (estimated to be worth £15 – 16 million). This was a discretionary trust of which Mrs Cowan was one of the potential beneficiaries;
- A residuary estate trust (estimated to be worth £4.75 million) of which Mrs Cowan received a life interest, with the remainder passing to Mr Cowan’s charitable foundation.
After Mr Cowan’s death in 2016, Mrs Cowan claimed to struggle to have access to funds for her living expenses and intimated a claim under the 1975 Act. A standstill agreement was entered into by the parties, however, proceedings were issued following failed settlement talks. By the time the claim was issued, Mrs Cowan was 17 months out of time to do so and was required to make an application for permission to bring her claim out of time.
High Court Judge, Mostyn J, refused to give permission for Mrs Cowan’s claim to be brought out of time as he believed there were no good reasons for the delay and also that her claim did not have good prospects of success due to the ‘generous’ trust arrangements which Mr Cowan had put in place. Mostyn J also criticised the practice of entering into standstill agreements, saying that “if it is indeed common practice, then I suggest that it is a practice that should come to an immediate end.”
The case created confusion amongst practitioners in this area given that, around the same time as the Cowan v Foreman decision, the court allowed the claimant in the case of Bhusate v Patel & Others to bring a claim under the 1975 Act despite being 25 years out of time.
The Court of Appeal held that each out of time claim under the 1975 Act should be decided on a case by case basis and after taking into account all the relevant considerations. Further, it was held that there is no requirement for the claimant to show that there were good reasons for the delay. Mrs Cowan was, therefore, given permission to continue with her claim.
The Court of Appeal decision has also helped provide practitioners with guidance on the use of standstill agreements in this area. Lady Justice Asplin commented, “without prejudice negotiations rather than the issue of proceedings should be encouraged. Although the potential claimant will have to take a risk if an application is made subsequently to extend time in circumstances where negotiations have failed, if both parties have been legally represented, it seems to me that it would be unlikely that the court would refuse to endorse the approach.” Lady Justice King agreed with this view commenting that the issuing of proceedings could lead to a hardening of the parties’ attitudes, but stressing that “if parties choose the ‘stand-still’ route, there should be a clear written agreement setting out the terms/duration of such an agreement and each of the potential parties should be included in the agreement.”
For advice on bringing out of time claims under the 1975 Act, contact our contesting a will team on 0161 941 4000 or lawyers@myerson.co.uk