Ilott: Started from the bottom, now we're here
This chapter may have come to an end with the Supreme Court's ruling, but this is not the end of the story, suggests Julia Burns
In August 2015, I posted an article on LinkedIn entitled 'Now the Ilott v Mitson dust has settled'. In it I made reference to the widely held view that in the original instance, District Judge Million had incorrectly applied the law because he did not consider what effect his award of £50,000 would have on the claimant's benefits. It is now clear that DJ Million had not made any such errors and that after ten years of litigation, he was in fact right all along.
The Supreme Court has reinstated the original award of £50,000 to Heather Ilott from her mother's estate which was worth just under £500,000. In 2007, that original award had the effect of increasing claims being brought from adult children. This week's Supreme Court judgment is being hailed as a victory for testamentary freedom. However, it can't be ignored that Heather Ilott's mother did not wish for her daughter to inherit anything from the estate. Her testamentary wishes have therefore still been flouted, albeit to a smaller extent than would have been the case had the Court of Appeal's ruling been allowed to stand.
Lady Hale's judgment raises some extremely interesting points and while the Ilott chapter has certainly come to an end, this is not the end of the story as the fundamental question that the deputy president of the UK's highest court asks, 'What makes an adult child deserving or undeserving of reasonable maintenance?' has not actually been answered with any great clarity.
Lady Hale highlights that the current law as enshrined in the Inheritance (Provision for Family and Dependants) Act 1975 is 'unsatisfactory' as it gives no real guidance as to the factors to be taken into account in deciding whether an adult child is deserving or undeserving of reasonable maintenance.
We do, however, know more than we did before the Supreme Court's ruling as the following points were made clear:
1. Weight will be attached to a person's testamentary wishes;
2. Estrangement between parent and child will be an important factor in future cases. The message in the judgment was that the estrangement alone could have been a legitimate ground for dismissing Heather Ilott's claim entirely. Estrangement claims are very likely to be treated with great caution in future;
3. Maintenance is still not defined (deliberately so that it can remain a flexible concept) but it was stated that 'it cannot extend to any or everything which it would be desirable for the claimant to have. It must import provision to meet the everyday expenses of living';
4. A roof over one's head is considered to be fundamental to maintenance but this is more likely to take the form of a life interest rather than capital sum or outright gift; and
5. State benefits will continue to be taken into consideration as a resource of the claimant and the court must consider whether they will continue to be received.
Lady Hale raised some fundamental questions of jurisprudence which went to the heart of social attitudes in relation to inheritance.
She raised the point that in some jurisdictions in the world, passing inheritance down the bloodline was preferred to protecting surviving spouses. These are jurisdictions, such as France, who have a concept of forced heirship, where children always inherit something. In England and Wales, there is complete testamentary freedom, save for those cases which are affected by the 1975 Act.
Lady Hale also observed that there has for decades been a public interest in spouses discharging their financial responsibilities towards one another so that the state does not have to pick up the tab. This was originally within the context of divorce but it is also the case on death, hence why surviving spouses have a superior position when it comes to claims under the 1975 Act.
The concept of saving the public purse money by resorting to inheritance in favour of state benefits is likely to be a controversial one, but in times of austerity, one can see the logic. I raised this point on Twitter back in July 2015 when the Court of Appeal made its decision with the words, 'Should the state really have to keep paying benefits when there is family money available?' My colleagues accused me of being controversial. I again asked the question to a pre-eminent barrister some months later and was told that making an award which took someone off benefits would be 'going beyond maintenance'. I was therefore very comforted to read Lady Hale's words which echoed my own thoughts.
The Supreme Court has called for further reform to the law to bring greater guidance and clarity so the story is likely to continue for many years to come. For the time being, we are, more or less, back where we were in 2007, which was the start of a climate for increased claims. However, the balance seems to be tipping towards a tightening up of the law in favour of respecting the wishes of testators at the expense of underserving adult children.
Julia Burns is an associate in the wills, trusts, and estate disputes team at Irwin Mitchell