Specialist Lawyers Say Latest Judgment Gives Clarity To Costs in Inheritance Act Claims

The UK Supreme Court has today ruled that a success fee under a conditional fee agreement (“CFA”) cannot form part of an award for reasonable financial provision under an Inheritance Act claim.

The case of Hirachand v Hirachand examines the Inheritance (Provision for Family and Dependants) Act 1975, which gives courts the power to order a lump or recurring sum to be paid out of the estate of a deceased person for their family and dependants if the will or intestacy rules do not make adequate provision for them.

When applying the 1975 Act, courts consider various factors, such as the applicant’s financial needs and the size of the estate, to determine the appropriate provision.

The UK Supreme Court was asked whether the Court of Appeal was wrong in law to decide that a CFA success fee was a debt, the satisfaction of which may constitute a "financial need" for which the court may make provision in an award under the 1975 Act.

Expert Opinion

The UK Supreme Court has clarified the interpretation of how ‘financial need’ should be considered when bringing an Inheritance Act claim. The judgment makes clear that allowing a success fee to form part of an award would undermine the costs regime and cannot form part of an award for reasonable financial provision.

If the judges had allowed success fees to be recovered from the estate it could have made it easier for those who have limited financial resources to bring a claim under the Inheritance Act 1975. This could have led to estates potentially facing a higher volume of claims and the value of those claims would be higher too, leaving less left over for other beneficiaries.

However, by making it clear that the success fee is not recoverable it is hoped we will see a reduction in speculative claims.

The case highlights how complex the probate process can be and the importance that people on both sides of the fence seek quality legal advice in the event of any disagreements or disputes. The increased awareness of rogue executors involved in probate recently and the inheritance tax changes in The Budget mean that we are likely to see an increase in disputed wills, trusts and estates in 2025. Paula Myers, National Head of Will, Trust and Estate Disputes

Read more about Irwin Mitchell's expertise in Inheritance Disputes.