The Practical impact of the decision in Ilott v Mitson & Others [2015] EWCA Civ 797

 In Comment

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Ilott v Mitson & Others [2015] EWCA Civ 797

Ilott v MitsonThe Court of Appeal handed down its judgement in the case of Ilott v Mitson to much publicity in the media in July.  What should practitioners make of it?

Facts

Mrs Ilott made a claim under the Inheritance (Provision for Family & Dependants) Act 1975 (“1975 Act”) challenging the will of her late mother (Mrs Jackson). Mrs Jackson left her £486,000 estate to various charities to the exclusion of Mrs Ilott, who was her only child. Mrs Ilott had been estranged from her mother since she was 17, a period of 26 years, and resided with her husband and 5 children in a council property on very limited means.

Previous decisions

Mrs Jackson died in 2004 and Mrs Ilott originally claimed against the estate in 2007. At the first instance DJ Million decided that despite Mrs Jackson having left a letter explaining her reasoning for excluding her daughter, Mrs Ilott had established that the will had made unreasonable financial provision for her. It appears that, at least in part, the Judge considered the strained financial circumstances of Mrs Ilott to be important and awarded her £50,000.

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However Mrs Ilott appealed the value of the award to the High Court, where the Court disagreed with DJ Million and awarded her nothing from the estate. This led to a further appeal by Mrs Ilott to the Court of Appeal, who reinstated DJ Million’s first instance decision that it was unreasonable for her to have been excluded from the will.

The Court of Appeal declined to deal with the matter of quantum and the matter was remitted back in to the High Court, who in March 2014 dismissed her appeal against the value of her claim. The effect was to mean that the £50,000 award would stand.

Mrs Ilott appealed the High Court’s quantum decision to the Court of Appeal.

The latest decision

What this case should bring home to any practitioner, is the importance of considering the practical realities of any award. Mrs Ilott’s award at first instance may have seemed a success, the practical effect was to place her in the invidious position of receiving money from her mother’s estate, and at the same time losing the benefits upon which she depended.

The Court of Appeal held that the Judge had not considered the actual effect his order would make, particularly upon her state benefits. Furthermore, they were clear that the Judge should not have proceeded without the necessary information, as doing so had placed her in a worse position than the one she had been in before her claim.

The making of the award to an amount which equalled Mrs Illott’s state benefits, was said by the Judge to have been partly on the basis that she had been able to live within her means for a long time due to her lack of expectation.  The Court of Appeal found this to be wrong in law, and held that just because someone had managed to live within their income, it did not mean that their income met their actual needs or requirements, let alone reasonable requirements.  In doing so they specifically referred to the case of Re Watson [1999] 1 FLR 878.

The Court of Appeal awarded her £143, 000 (a third of her late mother’s estate) meaning that she will now receive enough money to enable her to purchase her housing association house, plus the reasonable expenses of acquiring it. In addition she was granted an option (exercisable by notice in writing) to receive a capital sum not exceeding £20,000.

The impact

  1. Practitioners must be alive to the practical effect of any award and ensure that a Judge has the relevant information to appropriately calculate any sum.
  1. A claimant should not be penalised for living within their means. Maintenance is an objective standard, and the question is not whether he can or cannot live within his income, but whether his standard of living falls below the maintenance level.
  1. Practitioners will have to give serious consideration as to the extent to which (if any) testator’s wishes can be safeguarded. Testators should ensure that they establish a connection to any charity or person to whom they wish to bequeath a legacy, prior to their death.
  1. How the Court deals with estrangement will be an interesting point to follow. Lady Justice Arden’s remarks appear to suggest that the outcome may have been different if it had been the daughter who was estranged from the mother.
  1. The Judgment may have an impact upon whether charities choose to fight or settle a case, should an estranged relative come calling. In particular the Court of Appeal’s ruling that the charities had no real competing need, may be seen by many as a significant shift in the balance of such cases.

Many commentators feel that this is a significant challenge to a person’s freedom to dispose of their estate. However it is important to remember that cases will be decided upon their own facts; had the Claimant had a high income, had the beneficiaries had competing needs; had the daughter chosen estrangement from the mother, the outcome may have been very different.

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