Importance Of Unless Orders In Probate Claims

When acting as a personal representative to a deceased’s estate, there are several factors to consider, one of those being potential claims against the estate.

There are a number of claims that may be brought against a deceased’s estate, including but not limited to:

It is important to consider the possibility of any potential claims before distributing the estate. In the event distribution takes place before a successful claim is pursued against the estate, the personal representative stands personally liable for the claim on the basis that they should recover the estate monies from the receiving beneficiaries, which is not always possible. For this reason, personal representatives may choose to delay distribution until any claims have been dealt with or an applicant’s ability to bring a claim has passed. By way of example, it is common for personal representatives to delay distribution for 10 months after probate has been obtained in accordance with the time limits to issue and serve a claim made pursuant to the Inheritance (Provisions for Family and Dependants) Act 1975.

Whilst this is the primary limitation period to issue such claims, the Court can allow claims in this regard to proceed out of time.

Not all claims will be time-limited which in theory exposes personal representatives to an indefinite risk of a claim being pursued against the estate. Whilst personal representatives are able to defend claims pursued after a delay on the basis that it would be inequitable to allow the claim to be pursued, there is no guarantee such a defence would be accepted and in any event, the personal representatives would have to fund such a defence (which would have to be funded from their own resources on the basis that they had already distributed all of the estate funds).

What is an Unless Order?

In some instances, a claimant may raise the possibility of a claim being pursued however delay the issue of the claim, effectively leaving the personal representatives in limbo. On this occasion, a personal representative may consider obtaining an Unless Order against the proposed claimant.

An Unless Order can be used to provide the claimant with an ultimatum in respect of the claim and require the Claimant to issue proceedings within a prescribed timescale or otherwise lose the right to pursue the claim. These types of orders are commonly referred to as ‘put up or shut up’ orders.

A claimant’s failure to comply with an Unless Order in this regard has serious consequences and prevents them from pursuing their intended claim at a later date. This obviously provides personal representatives with a more solid foundation to proceed with distribution of an estate.

Phipps v Goulbourne (Re the Estate of Tetla Yvonne Goulboure otherwise Tetla Yvonne Butler)

Background

The recent case of Phipps v Goulbourne displays the severity of an Unless Order and the strict consequences. In this case, the claimant suggested a claim would be pursued to propound a copy of the Deceased’s Will, which could not be found on death.

The claimant was ordered to issue and serve her claim within 28 days of an order and her failure to do so would result in a grant in respect of the deceased’s estate being made on the basis the Will was invalid. The claimant failed to comply with the Unless Order and 6 months later sought relief from sanctions, seeking she be allowed to pursue the claim.

In consideration of a claimant’s application for relief from sanctions, the Court considered the relevant circumstances including the need for litigation to be conducted efficiently and the need to enforce compliance with the rules, practice directions, and orders.

In this case, the Court considered the breach to be serious and noted that there was further delay with regards to the claimant then seeking relief from sanctions. It was further noted that to grant relief from sanctions the Court would be undermining the previous Unless Order. The Court therefore concluded that the Unless Order was proportionate and the claimant’s breach had been serious. Therefore, the claimant was prevented from pursuing the claim following her failure to comply with the Unless Order.

Comment

This case confirms the strict application of an Unless Order and highlights the Court will be reluctant to override an Unless Order so as to not undermine their own decision.