A claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 must be made within 6 months of the date a grant of probate or a grant of letters of administration is issued. This is a strict time limit and the court will only exercise its discretion under s.4 of the Act to allow a claim to proceed out of time in exceptional circumstances.
The Act itself provides no guidance as to how the court must exercise its discretion when deciding an application for permission to bring a claim after the expiry of the 6 month period and so each case will be considered, and decided, on its individual facts. This said, there is a body of case law in this area which has established some guidelines to assist the court (and practitioners) when deciding whether a claim is too late.
The key case in this area of law is Re Salmon, which was decided in 1981 and which provided non-binding, yet persuasive, guidelines to the court as to the exercise of its discretion under s.4 of the Act. More recently, in 2013, the case of Berger –v- Berger saw the court of Appeal confirm that the Re Salmon guidelines remain good law. Since that date, there have been a number of reported cases in this area including the much publicised, and heavily debated, 2019 court of Appeal decision in Cowan –v- Foreman which overturned Mostyn J’s first instance decision and allowed Mrs Cowan’s claim for reasonable financial provision to proceed out of time. This followed the 2018 case of Bhustate –v- Patel where a widow was granted permission to bring her claim nearly 27 years after the expiry of the 6 month deadline. Contrast this with the 2018 case of Sargeant –v- Sargeant & Anor where the High court refused to allow a surviving spouse to bring a claim 10 years too late.
The guidelines: what do they say and how are they applied?
The first thing to say is that the list of factors the court will take into account when considering a s.4 application is not exhaustive and the court’s discretion is both wide-ranging and unfettered. It is also important to note that the guidelines are not ranked in any particular order of importance and no single factor is necessarily of magnetic importance. This said, there are, arguably, some factors which will be given greater weight by the court than others.
First, and perhaps most importantly, the court will consider the underlying merits of the claim and whether it has a reasonable prospect of succeeding if allowed to proceed. If the answer is no, the court is very unlikely to grant permission. Even if the answer is yes, the court may decline to grant permission if one or more of the other factors counts against the potential claimant. For example, in the Sargeant case, although the widow’s claim had reasonably good prospects of success, she had chosen not to seek legal advice or to explore whether there was any way in which the terms of her husband’s will could be varied to improve her financial position. As a result, the Judge held that it was not ‘right’ or ‘just’ to allow the claim to proceed. This case demonstrates that the court will scrutinise the reason for the delay and is unlikely to allow a claim in circumstances where the claimant made a conscious decision not to pursue a claim until it was too late to do so. By contrast, in the 2002 case of McNulty –v- McNulty permission was granted despite a three and a half year delay because the true value of the estate was withheld from the claimant who, on discovering the truth, issued a claim immediately.
As well as considering the reason for any delay, the court will also look at what prejudice will be suffered by any potential party to the claim if the application for permission is allowed to proceed, or, if it is rejected. The court considered this factor in Re Begum where, despite a delay in bringing the 1975 Act claim, the estate could not have been administered following the expiry of the 6 month period in any event due to an ongoing dispute as to the the validity of the deceased’s will. The court held that the delay had not caused any substantial prejudice to the respondent and granted permission. The court’s decision in that case may, of course, have been different had the estate already been administered. Indeed, the court will certainly take into account the status of the estate administration when considering the exercise of its discretion under s.4. In Bhustate –v- Patel, a significant reason for the court overlooking the delay of over 25 years was the fact that no active steps had been taken to administer the estate.
The existence of an identifiable trigger for bringing the claim out of time will give a potential claimant a much better chance to succeeding in an application for permission to bring a claim out of time. This was a central factor in the McNulty case. Further, in cases where without prejudice negotiations have started within, and are ongoing at the expiry of, the 6 month period the court has shown a greater willingness to allow a late claim to proceed. Finally, and in addition to the factors mentioned above, the court will look at whether there is any alternative remedy available to the claimant if the application to bring a1975 Act claim out of time is refused. For example, in the 2004 case of Adams –v- Schofield the court found that the claimant could pursue a professional negligence claim against their solicitor for failing to provide advice about the 6 month time limit. In these circumstances, and where an alternative remedy exists, the court is less likely to grant permission.
The case law in this area is clear; there is no guarantee that an application to bring a 1975 Act claim out of time will succeed and the court will make its decision depending on all the circumstances of the individual case. Furthermore, the fact that the parties may have agreed an extension of time beyond the 6 month time limit will not usurp the court’s authority and permission will still need to be obtained if the claim is to proceed. In light of all of this, a potential claimant under the 1975 Act should not risk the chance of a claim being refused out of time and should seek advice at the earliest opportunity, even if the 6 month period has long since passed!
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Our specialist Contentious Trust and Probate Team has extensive experience in acting for those bringing and defending provision claims. If you think you may have a claim against an estate, or you are facing a potential claim against an estate in which you are interested, early action is key and professional advice should be obtained as soon as possible.