ADR offers attractive alternative in family trust and inheritance disputes

When family trust and inheritance cases move to litigation, minor disagreements between parties can easily turn rancorous. Regardless of the particulars, court proceedings are inevitably emotionally draining, sometimes stretching pre-existing frictions within family relationships to breaking point. There have been numerous cases in which, for example, siblings who are the beneficiaries of a parental will become estranged because they have such contrasting views about the distribution of the estate. 

However, with bitter disputes becoming increasingly common place in such matters, Alternative Dispute Resolution (ADR) can offer an attractive alternative to court action in inheritance and probate cases. It is easy to see why this might be.

Used in different types of probate dispute - including executor disputes, Will validity disputes and Inheritance Act claims – ADR is an umbrella term that encompasses various non-contentious ways of settling a legal dispute, thereby avoiding the need to have redress in court. It has been used in the UK for many years, particularly since 1999 when the Woolf Reforms gave rise to the Civil Procedure Rules (CPR). 

The CPR identified principles that aimed to make civil litigation quicker, fairer, more cost-effective and less adversarial for all parties involved. It is now expected that parties to any civil dispute, which includes any form of contested probate or inheritance dispute, will attend at least one ADR session. Methods such as Mediation, Negotiation, and Early Neutral Evaluation (ENE) offer a quicker and indeed cheaper alternative to lengthy court litigation in contentious probate cases. 

When parties agree to Mediation as a form of ADR, an experienced mediator - typically a barrister or solicitor - acts as a neutral third party. Parties usually meet separately with the allocated mediator, which can take place remotely rather than in a lawyer’s office. In normal circumstances, each party would also participate in mediation sessions accompanied by at least one member of their legal team, typically a specialist contentious probate solicitor.

If the Mediation route is chosen as the preferred form of ADR, the mediator’s primary purpose is to assist the parties in working towards a settlement that is less protracted. Rather than aiming for an agreement which everyone is happy with, they would instead by seeking a deal which all involved can find acceptable. Should a mutually acceptable deal be reached, a settlement agreement or confidential order will be drawn up which binds the parties. If litigation has already commenced, this would be filed with the court. 

Many high value inheritance claims can seem intractably contentious, and in those instances, it is important that parties work closely with their solicitors to obtain the best possible outcome for all those involved.

Similarly, with Early Neutral Evaluation (ENE) an independent evaluator is appointed to address disputes before entering into court proceedings. However, their opinion is non-binding. The onus is again on encouraging settlement discussions through an impartial expert assessment of the respective strengths and weaknesses of the opposing sides’ cases. 

Rather than offering a final decision, the evaluator gives a clear indication of whether a particular point might prevail – or not – if litigation were to happen, based on their professional experience in previous similar scenarios. The 2015 case Seals v Williams was one such dispute which paved the way for ENE as a means of enabling the judge to evaluate the respective parties’ cases in a straightforward way.

Irrespective of which ADR method is adopted by the parties, there are multiple advantages of choosing such a route.

First and foremost, ADR is far more cost-effective than costly and drawn out court proceedings. Avoiding the need for expensive legal action is therefore a clear draw for those involved in such disputes.

Moreover, retaining confidentiality is another very clear factor in favour of those adopting ADR as, unlike public court proceedings, ADR processes provide privacy, which can safeguard sensitive family matters and preserve the reputations of all those involved. Of equal comfort to parties is the fact that confidentiality in ADR discussions ensures that admissions made by either party cannot be later used in court. Given the often-sensitive nature of these cases, preserving relationships and avoiding the public scrutiny of court proceedings are also significant advantages that make ADR a superior choice.

Where litigation can cause irreparable damage as disputes turn bitter, ADR can assist families in preserving longstanding ties between relatives or close friends - even building bridges between parties who have moved apart because of the inheritance dispute. The process encourages collaborative discussions and amicable communication which can help preserve family relationships that may be strained or damaged in adversarial court settings. The fact that both Mediation and Negotiation can allow parties to walk away from a non-binding option can also be regarded as one of the clearest upsides of this process. 

A further advantage to ADR is the flexibility in the types of solution which it facilitates, allowing parties to create more bespoke and tailored solutions than those that a court may be able to offer. This can make it ultimately easier to find common ground between parties. It can also provide parties with greater control over proceedings than they would have in court.

ADR is something which should be entered into as early as possible, ideally before formal proceedings have started provided that all parties have access to all relevant background material.

For practitioners, the role of ADR is also only going to become more prominent. 

As of October 2024, courts in England and Wales now have the authority to impose legal costs on parties that fail to participate in ADR processes in relation to probate matters. The new power aligns with existing financial remedy proceedings in which similar sanctions were already in place under Family Procedure Rule 28.3(7).

Under the amendment, courts can disregard the standard “no order as to costs” principle when one of the parties in the dispute refuses to take part in ADR without any genuine justification. This is a departure from before when the rule only applied to financial remedy cases, but did not affect other proceedings.

As the case of Northamber PLC v Genee World Ltd & Ors [2024] EWCA Civ 428 has shown, a refusal to engage in mediation can have a severe impact on costs awarded, with the court stating the silence of two of the defendants “in the face of an offer to mediate” was “unreasonable”. It is clear therefore that, while ADR has become an invaluable tool when it comes to settling probate disputes, it is also now incumbent on all parties to try their hardest to reach a resolution through this new approach. Any form of ADR should not only be considered at the outset, prior to embarking in court proceedings, but also at any point during the course of the proceedings. 

In what can often be characterised as bitter and protracted disputes, ADR can not only save time and money, but also helps families reach a resolution while avoiding the emotional distress of court proceedings. Inheritance disputes are frequently highly emotionally charged, so it is clearly better for all concerned to enter into a more conciliatory dialogue that is more likely to provide participants with a result that they regard as fair.

When the proper rules are followed it should, in most cases, achieve a result that is at least equal to that which might be obtained in court, - if not better. ADR has a well-documented success rate and, although there is no guarantee, the majority of mediations result in settlements agreeable to all parties.

ADR is, therefore, a favourable first step in most family trust and inheritance disputes – one which can allow families to sidestep the attrition of court proceedings and avoid the need for costly and complex litigation.