Under the Inheritance (Provision for Family and Dependants) Act 1975 certain categories of individuals can bring a claim against the deceased’s estate if reasonable financial provision has not been made.  But the time limit for bringing a claim under it is short: 6 months from the date of the grant of probate. Section 4 of the Act states:

An application for an order under section 2 of this Act shall not, except with the permission of the court, be made after the end of the period of six months from the date on which representation with respect to the estate of the deceased is first taken out.”

A claim can be brought outside of the six months but only with the permission of the court, and the party has to show good reason for the delay.  The short time frame to bring a claim is designed to avoid unnecessary delay in the administration of estates.

For the cautious (such as myself) that meant issuing a claim irrespective of whether or not the parties were engaging in fruitful correspondence and a settlement looked likely.  But there were those who were prepared to agree between them that the deadline could be extended (a so-called standstill agreement).

Standstill agreements are an agreement between the parties that the Defendant to a claim will not take issue with the lateness of the claim brought by the Claimant.  They are usually entered into when the parties are engaging together with a view to resolving the dispute.  They are widespread in contractual or negligence disputes.

At first blush, why not agree to extend the 6 month deadline for bringing a claim under the Act if the parties are engaging and a settlement could be achieved?  It saves the not insignificant cost of preparing the evidence and issuing the claim.  But it is clear from the wording of the Act that it is not in the parties’ gift to agree.  And that is precisely what the High Court stated in Cowan v Foreman[1].

In Cowan v Foreman the Claimant had formed a relationship with the deceased in 1991 and had begun living with him in 1994.  They did not marry until 2016 after the deceased had been diagnosed with a brain tumour he knew would be fatal.

By his Will, the deceased gave his personal chattels to the claimant.  All other property and investments were placed in two discretionary trusts (for inheritance tax planning reasons) which shared the same potential beneficiaries, including the Claimant.  His estate was valued at approximately £16m.  An accompanying letter of wishes indicated that, save for some modest (in the scheme of the estate) sums set aside for others, the deceased wanted the Claimant to be treated as the principal beneficiary.

Prior to his death the deceased transferred $400,000 to the joint account and the balance of $375,000 passed to the claim by survivorship on his death.  Following his death, the trustees agreed a regular monthly payment of $17,250 (later increased to $26,250) with a back payment of $207,000.  Nevertheless, the Claimant did not feel reasonable financial provision had been made and she applied for provision under the Act.

The date for issuing her claim ran out on 16 June 2017 and the Claimant did not issue her application until 8 November 2018.  The judge pointed out that his discretion to allow an application out of time was not “unfettered” and that he had to look at (1) whether there was good reason justifying the delay and (2) that the claim had sufficient merit to be allowed to proceed to trial.

The judge concluded that the Claimant failed on both fronts: she could not show that her claim had sufficient merit having been provided for generously out of the two trusts.  As to the delay, the judge was referred to the standstill agreement and made the following comments:

I was told that to agree a stand-still agreement of this nature is ‘common practice’.  If it is indeed common practice, then I suggest that it is a practice that should come to an immediate end.  It is not for the parties to give away time that belongs to the court.”

This is the comment causing the most consternation amongst practitioners.  The courts encourage the parties to seek out compromise at the least cost possible but at the same time, in claims under the 1975 Act, are seemingly compelling the parties to embark on a costly step of issuing a claim even though the parties might be working together to narrow the issues or settle the claim in its entirety.

[1] [2019] EWHC 349 (Fam)