The much-awaited judgment of Hirachand v Hirachand was handed down by the Court of Appeal on Friday (15 October). So, what were the results?
The judgment confirmed the High Court’s finding that the Court may, at its discretion, make provision for a party’s conditional fee arrangement success fee when determining the appropriate award in a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”).
In this article we break down the case and explain what that means.
What were the issues?
The claimant in Hirachand v Hirachand  EWCA Civ 1498 was the deceased’s estranged daughter who suffered from mental health problems and had been unable to work for around 10 years. Notably the beneficiary of the estate, the deceased’s wife, did not defend or engage with the claim. As a result, she was debarred from participating in the hearing.
Conditional fee arrangements (often referred to as ‘no win, no fee’ agreements) are often agreed between a client and their solicitor where the client has limited resources or means of funding their claim. This is frequently the case in a 1975 Act claim, where the claimant’s case is often based on their own financial hardship.
Generally a conditional fee arrangement (CFA) will include a success fee or ‘uplift’, whereby the claimant is required to pay an additional sum (which can be up to 100% of their legal fees) to their solicitor if their claim is successful.
Until 2013, a success fee was reclaimable from the unsuccessful party, but that was brought to an end by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LAPSO”).
What was the decision in Hirachand v Hirachand?
Previous case law on recovering a success fee under a CFAs has been conflicting. The judge in Re Clarke  EWHC 1193 declined to include a success fee in the claimant’s award on the basis that it would be contrary to the changes made by LAPSO, whereas the judge in Bullock v Denton  (unreported) did make provision for the success fee when calculating the appropriate award.
The Court of Appeal have now found that an order for maintenance for a successful 1975 Act claimant can include provision for a success fee. The success fee is a debt of the claimant, which is payable if they are successful, and the Court is therefore entitled to regard it as a debt capable of inclusion in a maintenance award.
How is this going to affect 1975 Act claims?
Many potential claimants who would previously have been unable to fund litigation, and were previously too concerned about the effect of a success fee on what they might recover, may now be able to fund necessary litigation to ensure they receive reasonable provision from a relative’s estate.
Claimants should, however, be aware that an award in respect of the success fee is discretionary and cannot be relied on. Even where an award is made, it seems unlikely the claimant would receive the full amount of their success fee. Claimants should be confident that they can fund their legal fees themselves to avoid having to pay their legal costs from any award they receive from the estate.
Funding is always an important consideration for anyone considering bringing a 1975 Act claim. The Court’s decision in Hirachand v Hirachand has the potential to dramatically change the way in which these claims are funded and litigated and enable more claims to be brought by impecunious but meritorious claimants.
It is important to seek specialist legal advice early if you have any concerns regarding the estate of a loved one.