At long last the saga has reached a conclusion. The Supreme Court handed down its judgment in the case of Ilott (Respondent) v The Blue Cross and others (Appellants)  UKSC 17 on 15 March, a case having its roots in the death of the late Mrs Jackson (Mrs Ilott’s mother) some 13 years ago.
Their Lordships and Lady Hale delivered a unanimous decision in restoring the order of District Judge Million and dismissing the reasoning of the Court of Appeal in rejecting that original order. Malcolm Skinner, Solicitor in the Lexis®PSL Private Client team, analyses the judgment and the case for reform.
This is the first time that a case on the Inheritance (Provision for Family and Dependents) Act 1975 has come before the Supreme Court and it is perhaps most notable for that, given that the facts are fairly mundane – daughter marries unsuitable man, estrangement with mother follows with no reconciliation before mother’s death, mother leaves assets to animal charities, daughter challenges disposition and asks for reasonable financial provision.
There can be no doubt that Mrs Illott’s finances were in a parlous state but she and her family had been financially independent, although much reliant on state benefits, for many years. The Court of Appeal sought to lessen the reliance on state benefits but at the same time preserving those benefits. Their novel idea was to award a sum towards the purchase of a property and a lump sum causing as little damage as possible to the means tested benefits. The Supreme Court was not impressed and roundly declared:
‘It follows that the District Judge did not, on fuller analysis, make either of the two errors on which the Court of Appeal relied to revisit his award. That is enough to require this court to set aside the order of the Court of Appeal (Lord Hughes para 42)
This dismissal came after a lengthy dissection of the law relating to the concept of ‘reasonable financial provision’ in the 1975 Act and it is this that practitioners will take forward when advising clients.
As the judgment reminded us:
‘The test of reasonable financial provision is objective; it is not simply whether the deceased behaved reasonably or otherwise in leaving the will he did, or in choosing to leave none. Although the reasonableness of his decisions may figure in the exercise, that is not the crucial test’ (ibid 2).
How to apply that objective test
This was the central tenet of the judgment and the court spent some time reviewing the provisions of the Act in relation to the concept of reasonable financial provision in a wider context than just this case. They made the point that ‘reasonable financial provision means such provision as it would be reasonable for the applicant to receive for maintenance.’(ibid 12)
Perhaps reflecting on the Court of Appeal decision, maintenance could indeed encompass the provision of housing (see In re Dennis, deceased  2 All ER 140 obiter) although the purpose behind the statutory provision is to provide income, not capital.
It is worth quoting the following:
Reasonable financial provision is, by section 1(2), what it is “reasonable for [the claimant] to receive”, either for maintenance or without that limitation according to the class of claimant. These are words of objective standard of financial provision, to be determined by the court. The Act does not say that the court may make an order when it judges that the deceased acted unreasonably. That too would be an objective judgment, but it would not be the one required by the Act (ibid 16).
However, the court conceded that the reasonableness of the deceased’s actions are still a factor to take into consideration notwithstanding the freedom a testator has in making will provisions and there will be cases where the testator acted reasonably but failed to make reasonable provision. The Court cited with apparent approval the test proposed by Oliver J (see In re Coventry  Ch 461 at 474-475). There is no reason to suppose that this will not continue to reflect the test that practitioners must try and satisfy with their clients.
The court plainly had some time for Oliver J as they approvingly reiterated his comments in respect of non-spouse claimants:
‘There must, as it seems to me, be established some sort of moral claim by the applicant to be maintained by the deceased or at the expense of his estate beyond the mere fact of a blood relationship, some reason why it can be said that, in the circumstances, it is unreasonable that no or no greater provision was in fact made’(ibid 20)
By way of clarification of this the court determined that in the case of an adult child capable of living independently more than being a child is needed to promote a claim – a moral claim is necessary.
The court then attempted to explain whether the needs of the claimant are the test for an order. In essence that cannot be the only consideration as there may be competing claims that impinge on the practicability of making an order that would satisfy those needs. Having said that it may well be that, in some instances, the relationship between the deceased and claimant was such that the whole of the estate is reasonable provision.
The questions that the court should ask themselves (as must practitioners) are:
- did the will/intestacy make reasonable financial provision for the claimant and
- if not, what reasonable financial provision ought now to be made for him?
It was confirmed that these questions should be addressed to the facts at the date of the hearing.
By way of an explanation of the above points the court dismantled the Court of Appeal decision. In determining the position it is clear that the court should not have adopted the approach of fixing a hypothetical standard of reasonable provision and then add to or deduct from it according to variable circumstances – it is for the court to look at all the factors (variables) in section 3 of the Act before concluding an order.
When looking at a potential order it is perfectly acceptable to look at the impact on benefits that the order may have. By this was meant means tested benefits, not tax credits which would remain intact. In other words what effect would an award have in reducing or annihilating those benefits?
A telling comment was that:
In some circumstances, different from those of the present case, receipt of state support greater than the testator could sensibly provide may be an understandable reason why it was reasonable for the deceased not to make financial provision for the claimant (ibid 45)
Lady Hale delivered a supplementary (rehearsed?) judgment which focused on the existing legislation or, rather, its deficiencies. In a thoughtful and insightful review of that legislation with some jibes at the Law Commission along the way. Her conclusion was that there was a:
‘……………….. wide range of public opinion about the circumstances in which adult descendants ought or ought not to be able to make a claim on an estate which would otherwise go elsewhere. That range of opinion may very well be shared by members of the judiciary who have to decide these claims. The problem with the present law is that it gives us virtually no help in deciding how to evaluate these or balance them with other claims on the estate’ (Lady Hale para 58)
With the legislation having no child age limit when dealing with adult children there is no guidance as to who would be deserving of support and who would not. This is at variance with the age limits contained in the Matrimonial Causes Act 1973 – surely a disconnection in family law.
Lady Hales’ conclusion signals important legislative food for thought:
I have written this judgment only to demonstrate what, in my view, is the unsatisfactory state of the present law, giving as it does no guidance as to the factors to be taken into account in deciding whether an adult child is deserving or undeserving of reasonable maintenance. I regret that the Law Commission did not reconsider the fundamental principles underlying such claims when last they dealt with this topic in 2011.
Malcolm Skinner specialises in Private Client work with particular emphasis on wills and probate including the contentious side.
Subscribers to LexisPSL Private Client can find further details on this matter in our Practice Note Family provision claims—children and those treated as children which includes a link to Ilott (Respondent) v The Blue Cross and others (Appellants)  UKSC 17 directly. If you are not a subscriber, take a free trial here to access.