Ilott v The Blue Cross and others

The family provision jurisdiction qualifies testamentary freedom but does not create forced heirship. For a claimant other than a spouse or civil partner, reasonable financial provision is limited to maintenance. Maintenance covers everyday living expenses at the standard appropriate to the claimant, and may be provided through a lump sum.

The statutory question is whether the will objectively failed to make reasonable financial provision, not whether the deceased acted reasonably. Need is necessary but not sufficient. The court must assess all relevant statutory factors holistically, including the relationship, estrangement, testamentary wishes and competing beneficiaries.

An appellate court should disturb that value judgment only for an error of law or principle. It must not substitute its preferred award merely because it would have reached a different assessment.

Ilott v The Blue Cross and others concerned an adult daughter who had been estranged from her mother for 26 years and had lived without financial support or any expectation of inheritance. The daughter lived in straitened circumstances. Her mother left an estate of about £486,000 principally to charities.

The District Judge held that the will failed to make reasonable financial provision and awarded the daughter £50,000. After several appeals, the Court of Appeal, in [2015] EWCA Civ 797, reported at [2016] 1 All ER 932, identified two errors of principle and substituted an award sufficient to purchase the daughter’s home, together with an option to receive a further £20,000.

The charities appealed. The central issue was whether the identified errors justified appellate interference with the District Judge’s assessment under the Inheritance (Provision for Family and Dependants) Act 1975.

1. Appeal allowed unanimously. Lord Hughes delivered the principal judgment, with which every member of the court agreed. The Court of Appeal’s order was set aside and the District Judge’s award of £50,000 was restored.

2. The Inheritance (Provision for Family and Dependants) Act 1975 preserves testamentary freedom subject to a limited jurisdiction to order reasonable financial provision. For claimants other than spouses and civil partners, provision is restricted to maintenance. Maintenance meets everyday living expenses at an appropriate standard. It is not confined to subsistence and may be provided through a lump sum, but the jurisdiction is not a power to confer capital for its own sake.

3. The statutory test is objective. The question is whether the will produced an unreasonable result by failing to make reasonable financial provision, not whether the deceased behaved reasonably. The deceased’s reasons and conduct may nevertheless be relevant statutory circumstances. Need is necessary for a maintenance claim but is not sufficient merely when combined with a qualifying relationship.

4. The two statutory stages—whether reasonable provision was made and, if not, what provision should be ordered—usually overlap substantially. The section 3 factors apply to both. The judge must make a single holistic assessment rather than calculate a hypothetical headline award and then apply separate additions or discounts.

5. The District Judge’s treatment of the estrangement disclosed no error. The prolonged estrangement, the daughter’s independent life and her absence of any expectation of inheritance were relevant and could limit reasonable provision. They stood alongside her straitened financial position as dominant factors.

6. The District Judge had also considered the effect of a capital award on means-tested benefits. The £50,000 award was not valueless. It could meet the necessary replacement of worn-out household goods and other essentials of daily living. Such expenditure fell within maintenance and could reduce retained capital below the benefits threshold.

7. An appellate court may disturb this highly individual value judgment only for an error of law or principle. It must be very slow to interfere merely because it would have made a different assessment. The two errors identified by the Court of Appeal were not established.

8. The court cautioned that testamentary wishes and the position of chosen charitable beneficiaries retain weight. A qualifying claimant’s need does not itself displace them. Lady Hale, with whom Lord Kerr and Lord Wilson agreed, also observed that the legislation gives inadequate guidance for distinguishing between deserving and undeserving claims by independent adult children.

1. United Kingdom Supreme Court: The charities’ appeal was allowed unanimously. The order in [2015] EWCA Civ 797 was set aside and the District Judge’s order was restored.

2. Court of Appeal: In [2015] EWCA Civ 797, reported at [2016] 1 All ER 932, the court identified two errors of principle, set aside the £50,000 award and substituted £143,000 to purchase the daughter’s home plus an option to receive £20,000.

3. High Court: Parker J had upheld the District Judge’s £50,000 award after the earlier remittal.

4. Court of Appeal: In [2011] EWCA Civ 346, reported at [2011] 2 FCR 1, the daughter’s appeal against Eleanor King J was allowed. The court held that the District Judge had applied the correct statutory question and remitted the quantum appeal.

5. High Court: Eleanor King J, in [2009] EWHC 3114 (Fam), reported at [2010] 1 FLR 1613, had allowed the charities’ cross-appeal and held that reasonable financial provision had not failed.

6. District Court: District Judge Million held that the will failed to make reasonable financial provision and awarded the daughter £50,000.