The Supreme Court’s ruling in the case of Ilott v Blue Cross and others [1] saw three charities succeed in the last battle in a course of litigation spanning over 10 years.
The case involved Heather Ilott, who made a claim under the Inheritance (Provision for Family and Dependants) Act 1975 to receive reasonable financial provision from her estranged mother’s £500,000 estate to meet her maintenance needs. Her mother’s will had split her estate between three animal charities, the Blue Cross, RSPCA and RSBP, and left nothing to her daughter. The county court initially awarded Heather £50,000. This was then increased to £143,000 by the Court of Appeal, plus an option to draw on a further £20,000.
The three charities appealed against the Court of Appeal’s decision to increase the award. The Supreme Court agreed with their reasoning, reinstating the original award of £50,000.
The Court of Appeal had criticised the original district judge’s award on the grounds that:
- the judge had failed to identify what award it would have made but for the long estrangement between mother and daughter (over a quarter of a century) and the fact that Mrs Ilott had not expected to benefit;
- the judge had made his award without knowing what the effect of it would be on Mrs Ilott’s receipt of state benefits.
Lord Hughes, who gave the leading judgment of the court, summarised the approach to be adopted by the courts as boiling down to:
(1) did the will/intestacy make reasonable financial provision for the claimant; and
(2) if not, what reasonable financial provision ought now to be made for the claimant?
In the case of claims by adult children (and the majority of other potential claimants under the Act) the award is limited to “maintenance”, which by definition is of an income rather than capital nature and “cannot extend to any and every thing which it is desirable for the claimant to have. It must import provision to meet the everyday expenses of living.”
In the course of its judgment, the Court of Appeal had commented that when balancing the factors deciding the appropriate award, Mrs Ilott’s lack of expectation (due to the period of estrangement) had little bearing, in part at least, because the charities likewise had no expectation of benefit either. The potential ramification of that would have been to relegate the interests of the charities behind those of the claimant in any case brought under the Act. Lord Hughes gave short shrift to the suggestion that the charities were not prejudiced because they have no needs. Acknowledging that charities depend heavily on testamentary gifts, he pointed to the obvious: an award to a claimant will reduce the amount that can pass to the charity, which is, after all, the testator’s chosen beneficiary.
The result for charities is that the court must have in mind the fact that an award under the Act to a claimant for their financial needs, will necessarily have an adverse impact on a charity, that was the chosen beneficiary of the will-maker.
Whilst this judgment does not stem the tide of potential claims by adult children, it does attempt to limit the awards to maintenance, reigning back from the more generous conclusion reached by the Court of Appeal. It contains a salutary acknowledgment from the highest court of the land of the importance of testamentary gifts to charities and the need to consider the implications on named charities of an award to a potential claimant.
[1] [2017] UKSC 17
James Burrows is a partner in the dispute resolution team at Stephens Scown in Truro. The team is top ranked in the Legal 500 guide highlighting the best lawyers in the country. If you have any queries then please do contact James on 01872 265100, by email solicitors@stephens-scown.co.uk.