Ilott: Testamentary freedom restored?

‘Daughter loses fight to overturn will’ was one of the many misleading headlines that popped up following yesterday’s Supreme Court ruling in Ilott v The Blue Cross and Ors [2017] UKSC 17. Heather Ilott did overturn the will, and it remained overturned – just not by as much as the Court of Appeal awarded her.

Melita Jackson was determined that her daughter should get nothing, but in the end Mrs Ilott got £50,000 and a private deal with the appellant charities, which is referred to in paragraph 48 of the judgment – ‘some arrangement has been arrived at between these parties in the event that the appeal succeeded’.

The partner from Wilsons Solicitors representing the charities was questioned about this by the BBC outside the Supreme Court, but declined to comment as it was a private matter. It may of course be a pragmatic arrangement, possibly related to the questioning by the justices of the lead counsel for Mrs Ilott relating to the recovery of the discount available on the purchase of the property by a sitting tenant if a property is sold thereafter, or it may be something else entirely.

Having attended the handing-down and watched the reaction of the barristers when the conclusion was reached, I was surprised at the calm reactions by the losing side, indeed by all present. However, in view of the private arrangement that was revealed in the judgment, I can better understand their reactions.

After the Court of Appeal judgment one of my partners wondered whether there was any point making a will anymore. I wouldn’t be surprised if some commentators take a similar line even after the Supreme Court judgment. Or they may want to portray it as a win for the charities and testamentary freedom, and imply that there is now clear and easy guidance for people making their will and they are free to do whatever they want again – which of course would be a mistake.

As explained by Lady Hale in her judgment, the reality is that the law has not changed and is still unclear, prompting her to call for the Law Commission to look again at this topic. ‘I have written this judgment only to demonstrate what, in my view, is the unsatisfactory state of the present law, giving as it does no guidance as to the factors to be taken into account in deciding whether an adult child is deserving or undeserving of reasonable maintenance,’ she said.

I am not an expert on the agenda for the Law Commission and what chance there might be that it will recommend change in parliament. Intuition tells me that even if it agreed that parliament needed to amend the Inheritance (Provision for Family and Dependants) Act 1975 to clarify the weight which needs to be given to each section 3 factor, or the definition of maintenance, the government’s legislative programme will be too busy with more pressing issues in the foreseeable future, to do with the economy or the constitution. I also suspect that parliament may feel that it should remain up to individual judges to weigh up the different section 3 factors in their discretion, or as a value judgement, taking into account all the circumstances of the case, as they are already required to under section 3(1)(g).

Ironically, it is worth noting under paragraph 65(2) of the Supreme Court judgment that the court felt that one of the options open to the original District Judge Million was to make an award similar in size to that made by the Court of Appeal.

So, we have reached the end of the judicial road, by reaching the Supreme Court, and how are testators and solicitors helped by this judgment in advising adult children who want advice about a possible claim?

Here are the takeaways from this case:

1. The section 3 factors in the Act remain paramount and Re Coventry [1980] Ch 461 was commended (yet again) as containing the right test.

2. Although not included in the list of section 3 factors, two other factors are implied by the Act, namely freedom of testamentary disposition and the testator’s wishes (paragraph 47).

3. Arguably there is one further factor, namely that despite charities having no obvious need, nevertheless there is a public policy aspect insofar as charities rely heavily on income from legacies (paragraph 66).

4. The need for a judge, or a testator for that matter, to consider a two-stage test (a three-stage test was discussed in the December hearing) was criticised by the Supreme Court as being unduly complicated in many cases (paragraph 23 and 24).

5. Needs should not be confused with maintenance. Need (judged not by subsistence levels but by the standard appropriate to the circumstances) is a necessary but not sufficient condition for an order (paragraph 19 of the judgment). In other words, an adult child may be in necessitous circumstances but quite capable of maintaining themselves if they got a job, and will not meet the threshold for an order.

6. Estrangement matters. As the court put it in paragraph 35, ‘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’.

7. Spending up to £50,000 of an award immediately (so as not to break the capital threshold which would impact on their benefits) on new white goods, carpets, curtains, beds, a car, and a holiday is still ‘maintenance’.

8. There is no new definition of ‘maintenance’ – the court quoted with approval the summary of Mr Justice Browne-Wilkinson in In re Dennis, deceased [1981] 2 All ER 140 which refers to ‘payments which directly or indirectly enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him’. Paragraphs 14 and 15 summarise the court’s thinking on maintenance.

9. Letters of wishes are important – in paragraph 6 of the judgment, the justices quote extensively from the deceased’s 1984 letter of wishes.

Peter Hopkins is a partner at Mercers Solicitors

www.mercerslaw.co.uk

@DisputedWills