Recovering Success Fees In Inheritance Act Claims – The Parameters

Litigation is not always affordable, and to help individuals bring claims, solicitors and barristers have sometimes been able to represent clients on a “no-win, no-fee” basis (also known as a conditional fee arrangement). Conditional fee arrangements ordinarily involve a success fee being paid to the lawyers, and this is very often a percentage of the client’s “base costs”. By the time a case has made it to trial, in most areas of law, this can be a very hefty sum indeed.

Before 2013, success fees were recoverable from the losing party, provided the other party had been made aware that the other side’s solicitors were acting on a no-win, no-fee basis. However, the recovery of success fees was outlawed by the Jackson reforms as part of a wider drive to make sure legal costs were not disproportionate.

However, a recent decision in a successful claim under the Inheritance (Provision for Family and Dependants) Act 1975 (Inheritance Act) has opened the door to the recovery of sums to help Claimants pay success fees due to their legal teams. When a close relative of a deceased person (and only certain types of individuals qualify), or someone being maintained by a deceased person has received minimal or no provision from a Will, they may bring a claim under the Inheritance Act for either a sum of money (paid in a lump sum or instalments) or a settlement of property provided they can show financial need. Any claim under the Inheritance Act must be issued within six months of a grant of probate being obtained by the estate executor.

Recent case law

In one recent claim under the Inheritance Act, Hirachand v Hirachand [2021] EWCA Civ 1498 (15 October 2021), which we reported on here, the Court set a very important precedent, recognising that a Claimant who has brought a claim under the Inheritance Act will have done so due to their financial situation being difficult, will need help meeting the liability to pay a success fee to their legal representatives.

It was held by the Court that liability to pay a success fee is in itself a debt, and should be taken into account when assessing a Claimant’s financial needs and resources – a key factor Judges must address before making an order under the Inheritance Act. In theory, this is a very fair approach for the Court to take – it is no good providing a claimant with a sum that will maintain them only for that sum to then be consumed by the success fee. This decision sets a clear precedent that where possible when calculating an award granted to a claimant, the Court should include the claimant’s liability to pay a success fee to legal representatives.

The Claimant in Hirachand was awarded just over £16,000 towards their success fee. However, in the judgment, which is available here, the Court did make it clear that such an award would not be an automatic expectation for all claimants under the Act. It would be, however, a consideration for Judges to apply on a case by case basis. One particular observation made by Lady Justice King was that to seek such an award, it would be necessary for the claimant to show that there was no other way they could have brought the proceedings other than via a no win, no fee agreement.

This last point will be crucial – without that particular caveat, there is a danger that claimants who could afford to litigate privately would be able to enter no-win, no-fee agreements, recover their success fee at trial and gain an unfair advantage over defendants in settlement discussions. There is also a danger that when claims are brought against smaller estates, a permanent green light on success fee recovery could make some claims uneconomical. However, in certain specified circumstances, claimants may recover sums to help them pay success fees. This will hopefully ensure that those who do have desperate financial situations will end up in a healthier position after successfully bringing a claim.