Under the Inheritance (Provision for Family Dependence) Act 1975 a dissatisfied beneficiary may bring a claim under the Act for reasonable financial provision if a Will did not make reasonable financial provision for that beneficiary. However, there is a strict time limit to bring in a claim, which is 6 months from the date that the Grant of Representation is obtained for the estate of the Deceased (although this can be extended in some circumstances).
This time limit in many disputes is insufficient, either to carry out pre-action work or to try and explore alternative dispute resolution. Most parties in practice use Standstill Agreements which allow parties to extend time by contractual agreement without the need to issue a claim through the Court.
The use of such Standstill Agreements has come into the spotlight recently however, in the judgment handed down by the High Court in the case of Cowan-v-Foreman & Ors [2019] EWHC 349 (Fam).
In this case, in the first instance, the Judge was of the view that the practice of entering into Standstill Agreements should “come to an immediate end”. He went on to state “if the parties want to agree a moratorium for the purposes of negotiations, then the claim should be issued in time and then the Court invited to stay proceedings whilst the negotiations are pursued”. This decision made by the High Court of course sent shockwaves to the legal professionals dealing with contentious Probate matters.
However, High Court’s judgment was appealed and interestingly, the Court of Appeal was critical of the Judge’s views, particularly in his assessment of stale claims and the interpretation of the overriding objective and costs principles, which it believed to be irrelevant. The Court of Appeal acknowledged that whilst there was a limitation period that applied under the Act, it was open for all parties required to extend time by using Standstill Agreements, as this did not preclude the parties from applying to the Court to extend time directly. The decision handed down by the Court of Appeal does give clarity to the use of Standstill Agreements in disputes relating to limitation and extending time between parties, which in practice is quite necessary particularly if parties need time to settle their dispute.
Notwithstanding this, in some instances, rather than parties entering into a Standstill Agreement, a preferred course of action may be to issue proceedings and stay those proceedings to avoid any dispute which may centre on the validity of a Standstill Agreement, if drafted incorrectly. It is therefore important that should a Standstill Agreement be required that you obtain specialist legal advice to ensure that the Standstill Agreement is drafted and prepared carefully to avoid it being invalid.
Should you feel that you have a claim against an estate or alternatively, you are an executor or beneficiary of a Will in which there is a claim, please do not hesitate to contact our contentious Probate department at [email protected]
