Private client | Presumption of Death Bill

When a person goes missing, the effects on the missing person’s family can be both devastating and wide-ranging. Often the most obvious impact is the emotional one. Less visible and talked about are the more practical consequences. Under the current law, the financial repercussions of a loved one going missing can be significant, and represent a further significant cause of stress and worry in themselves.

A new Presumption of Death Bill based on legislation already in force in Scotland and Northern Ireland has been approved by the House of Commons, and is in the process of being approved by the House of Lords. It is aimed at simplifying the law and remedying some of the practical difficulties experienced by family members left to pick up the pieces.

When a person goes missing and has likely died, but the absence of a body makes it difficult or impossible for the family to obtain a death certificate, the missing person is generally regarded as still alive in the eyes of the law. In the ordinary course, without a death certificate, the family cannot obtain a grant of probate (or letters of administration if there is no will) enabling the missing person’s estate to be administered. Similarly, if the missing person is married, his or her spouse remains legally married and is unable to re-marry without taking legal action.

The family are also not able to manage the missing person’s property or finances in the period between the person’s disappearance and the administration of his/her estate, which may result in the non-payment of insurance premiums, mortgage payments and other bills, and even in houses being repossessed.

There is no single coherent legal framework addressing these issues. Rather, there are various procedures available that may allow the missing person to be considered dead for specific and limited purposes.

For example, the non-contentious probate rules allows a district judge or registrar to grant an applicant leave to swear to the death of a person “to the best of his information or belief”, thereby allowing the applicant to apply for probate in the absence of a death certificate.
Under the common law, a person may also apply to court for an order that the missing person is presumed dead for a specific purpose, for example, to obtain a pay-out under a life insurance policy or to end a joint liability such as a mortgage. Similarly, section 19 of the Matrimonial Causes Act 1973 allows a missing person’s spouse to apply to court for an order that the person is presumed dead for the purposes of the marriage, and for the marriage to be dissolved.

Martin Houghton-Brown of the charity Missing People aptly described the law as a “crazy paving of legislation, of statutory and non-statutory provision”. The existence of multiple procedures can also lead to the strange result of a person being considered dead for some purposes and alive for others, which can be highly distressing for family members.

There are also practical problems with the current law. During a recent inquiry into the law on this area, the House of Commons’ Justice Committee (the Justice Committee) found that institutions such as banks and insurance companies sometimes refused to accept the effect of a court order that a missing person is presumed dead.

In summary, the current system is fragmented, complex, and difficult to understand. The process of sorting out a missing person’s financial and marital position and estate can be, at best, cumbersome, long-winded and expensive, and at worst, impossible.

?Purpose-made law?The current draft of the Presumption of Death Bill would establish a single procedure through which a missing person’s spouse, civil partner, parent, child or sibling, or another person with a sufficient interest in the application, could apply to the High Court for a declaration that the missing person is presumed dead. After the time for appeal of a declaration had expired, the name of the missing person would be recorded in a new register of presumed deaths. If enacted, it is anticipated that there would be 30 to 40 declarations made per year, based on the experience in Scotland.

The court would be required to make the declaration if it were satisfied that the missing person had died, or had not been known to be alive for a period of at least seven years. The declaration would need to include a finding as to the date and time of the missing person’s death, and the bill contains provisions to address a situation where the court is uncertain of when the missing person died.

Most crucially, a declaration under the Act would be conclusive of the missing person’s presumed death and effective against all persons and for all purposes, including for the purposes of the acquisition of any interest in any property, and the ending of the missing person’s marriage of civil partnership.

The bill includes provisions safeguarding the position of the missing person and certain third parties in the event the missing person returned alive, or evidence emerged that the missing person was alive or had died at a different date than had previously been thought. In such circumstances, it would be possible to apply for the declaration to be revoked or varied (a variation order). The variation would not itself effect any interests in property acquired as a result of the declaration. However, the court would be required to make such “further order as it consider[ed] reasonable” in relation to such interests.

Although this power appears wide, the bill provides that such an order would not be capable of affecting a related good faith transaction or an interest in property acquired under such a transaction, thereby protecting the interests of bona third party purchasers. In considering whether to make such an order, the bill would require the court to have regard to two principles, and these principles provide an indication of the kind of situations that the court’s powers to make such “further order as it consider[ed] reasonable” are aimed at.

The first principle is intended to address a situation where the effect of a variation order is that a person should have acquired an interest in the missing person’s property but did not.

This situation might arise, for example, where the missing person’s will had named two alternative people or classes of people as beneficiaries depending on the date of the missing person’s death. If a declaration was varied to provide that the missing person had died at a different date, and consequently a different person/class of people should have inherited property under the will, the court could order the trustee to transfer the property or the value of the property to the person/class of people who should have acquired the interest.

The second principle is intended to protect insurers, and provides that where an insurer has paid a capital sum as a result of declaration that has been varied or revoked, all or part of the capital sum should be repaid if the facts in respect of which the variation order was made justify such repayment.

The bill would also allow the court ?to direct that trustees or recipients of ?capital sums under life insurance policies take out insurance against the risk of claims arising upon a variation order being made.?Limits of the bill?Notably absent from the bill are provisions aimed at addressing the difficulties experienced by family members in the period between the missing person’s disappearance and the declaration that he or she is to be presumed dead. The bill provides no mechanism for enabling the family of a missing person to manage his or her property or finances or provide for any dependents during the period up to the administration of the missing person’s estate.

The Justice Committee recommended that the government introduce provision for guardianship orders modelled on the approach taken by some states in Australia. Such an approach would allow the missing person’s family to apply for a guardian to be appointed a short period after the disappearance. The guardian would have powers, for example, to pay the missing person’s debts, maintain any dependents, and take other actions for the care and maintenance of the missing person’s estate. The guardian would be required to act in the missing person’s best interests.

The Mental Capacity Act 2005 already contains provisions of this kind in respect of people who lack capacity. Some commentators have suggested that the quickest and simplest way of changing the law would be through amendment of the Mental Capacity Act 2005 so that it extends to missing people.

The government has acknowledged that “an ability to gain control of and access to the property of a missing person could be a powerful means to overcome the problems faced by those left behind and to protect the interests of the missing person”.
However, the government has delayed reaching a decision on whether guardianship legislation is needed on the basis that there are “significant and difficult” issues surrounding the tension between the financial interests of the missing person and those left behind who could benefit from the guardian’s actions.

The government is in discussions with the Law Commission about a possible investigation on this topic.

The new procedure has the potential to make it much easier, quicker, more straightforward and less costly for family members to sort out the missing person’s estate, and to achieve certain other outcomes such as obtaining a pay-out under a life insurance policy and ending a joint mortgage.

Most notably, it would no longer be necessary for the family to make multiple court applications to achieve multiple ends, since a declaration would be conclusive of the missing person’s presumed death and effective against all persons and for all purposes.

Disappointingly, the need would remain for a law allowing interim administration up the point when the missing person is presumed dead.
If the bill were enacted, our clients would still have no way of managing the missing person’s property or finances or providing for any of the missing person’s dependents during the period up to the administration of the estate.