On 18 December 2024, the Supreme Court delivered its landmark judgment in the case of Hirachand v Hirachand [2024]. Those involved in the legal industry, specifically the field of contentious probate, have been eagerly awaiting this decision since the hearing in January 2024. The Supreme Court ruled that a claimant’s award in a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act), should not include any success fee that they are liable for under a conditional fee agreement (CFA). Implications of Hirachand-v-Hirachand This Judgment will have a significant impact for those considering making a 1975 Act claim and the method by which claimants can fund their claims. It draws the funding of such in line with any other claim funded by way of a CFA and seems to be the correct ethical decision to make. We will see a fundamental shift in claimants having to pay their legal representative using the award that they receive under the 1975 Act if, funded by way of a CFA. Arguably, it also strengthens the position of Defendants in defending the weaker, and less meritorious claims on the basis of costs. At the very least, claimants and their legal representatives will now be considering: Whether a CFA should be used to fund a 1975 Act claim. Whether the costs of litigation will be proportionate to the award granted. Will a person’s access to justice be limited due to lack of funding options? Will the Court see a decrease in 1975 Act claims due to this ruling? A very careful balancing exercise will need to be undertaken when assessing the merits of a 1975 Act claim, especially those from an adult child and funding will continue to be a key consideration. There are of course, alternative ways to fund litigation which we offer at Morr & Co and are open to discussing with of all our clients on a case by case basis. Background to Hirachand-v-Hirachand Sheila Hirachand filed a claim against her late father’s estate, under the 1975 Act. Sheila contended that despite being estranged from her parents, she had not received reasonable financial provision from her father’s estate. Sheila relied on her severe health issues and financial hardship to support her claim. The sole beneficiary of the estate was her mother, Nalini Hirachand. Nalini herself was elderly and residing in a care home due to significant health issues. Case History Initially, the High Court ruled in Sheila’s favour, awarding her a lump sum, which included a sum representing 25% of the success fee owed to her solicitors under a CFA. The court treated Sheila’s obligation to pay her solicitors the success fee as a debt. This was in line with the existing legal framework within the Courts and Legal Services Act 1990 (the 1990 Act). Nalini appealed, arguing that the Court’s decision to include a contribution towards Sheila’s success fee was an error in law. The Court of Appeal upheld the High Court’s decision on 15 October 2021, asserting that it was within the court’s discretion to take into consideration Sheila’s success fee and factor this into the award she received. Nalini again appealed. The Supreme Court ruling After 11 months and careful considerations, the Supreme Court has overturned the decisions of both the High Court and the Court of Appeal, ruling that success fees under CFAs cannot be considered a debt constituting a “financial need” under section 3(1)(a) of the 1975 Act. The Judgment emphasises that the concept of ‘financial need’ should not be extended to cover litigation costs, particularly success fees. The Judgment also commented that offers of settlement under Part 36 of the Civil Procedure Rules would risk “injustice to the estate” and be unworkable. How can Morr & Co help? If you require assistance and advice on 1975 Act claims or any other issues concerning a contested trust or probate, please call our team on 01737 854500 or by email info@morrlaw.com Get in touch Disclaimer Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position. Authored by Katie Woodcock Senior Associate Solicitor Message Tags Insights On this page Related Stories Insights Millionaire Inventor’s Estate Sparks a High Court Dispute View more Contact our team today Contact Us
