ILOTT v BLUE CROSS AND OTHERS (previously known as Ilott v Mitson): THE CONCLUSION

The case we all know as Ilott v Mitson is like a long running soap opera.  Since 2007, the parties have been battling up and down the Courts over the estate of Melita Jackson, the mother of the Claimant Heather Ilott.  Today marks the conclusion to the saga as the Supreme Court, in its first decision on a claim under the Inheritance (Provision for Family and Dependants) Act 1975, gives its verdict on the case.  So, how has it got to this point:

BACKGROUND STORY

Heather Ilott was left nothing from the estate of her mother.  This was not entirely surprising given that she had been estranged from her parents for many years, having moved out of home at a young age to live with a boyfriend they did not approve of.  By the date of her mother’s death, she and her boyfriend were married, and had five children.  Her husband had health problems but worked, but she was unable to because of her caring responsibilities for the children.  The family relies on state benefits. Their 3 bedroom home is rented from a housing association, and they have financial needs.  Her mother’s estate amounted to £486,000 and was left to three animal charities.

Heather Ilott made an application for an order under s2 of the Inheritance Act for reasonable financial provision from the estate.

EPISODE 1

Proceedings were issued in the Family Division, and in August 2007 an order was made by a District Judge awarding Ms Ilott £50,000 as a capitalised maintenance sum. Neither she or the charities were happy with this, and both appealed – Ms Ilott contended that the amount was not high enough, and the charities argued that the claim should have been dismissed.

EPISODE 2

In October, the matter was heard by a Judge in the Family Division.  In a judgment dated 1 December 2009, the Judge dismissed Ms Ilott’s claim and allowed the charities’ cross appeal – so Ms Ilott was back to receiving nothing and the charities received the entire estate.

EPISODE 3

Ms Ilott appealed to the Court of Appeal who heard the matter on 8 February 2011.  On 31 March 2011, they allowed her appeal.  Consequently, they sent the matter back to the Family Division for a Judge (but not the same Judge as had appeared in Episode 2) to decide the appeal on the amount.  (At this point, the charities sought permission to appeal to the Supreme Court but were refused permission to do so – getting the Supreme Court involved at that stage would have shortened the story considerably).

EPISODE 4

A Judge in the Family Division heard the appeal in October 2013.  In a judgment dated 3 March 2014, that Judge dismissed Ms Ilott’s appeal against the original judgment of the District Judge.  The effect was that that original decision stood – and Ms Ilott was back to receiving the sum of £50,000.

EPISODE 5

Ms Ilott remained unhappy (as she had been 7 years before), and appealed again to the Court of Appeal about the amount of the award particularly because the District Judge had failed to appreciate the effect of the award on her state benefits.  On 3 July 2015, the Court of Appeal heard the case and in a judgment on 27 July 2015 they awarded her £143,000 for property acquisition (so that she could exercise her right to buy of the housing association property), and £20,000 as additional capital which would not affect her rights to means tested benefits.

EPISODE 6

It was the turn of the charities to be upset – and they appealed to the Supreme Court asking them to overturn the decision of the Court of Appeal.  The case was heard on 12 December 2016 and the judgment was published this morning.

CONCLUSION

The Supreme Court agreed with the charities, and allowed their appeal.  The effect of this is that the decision of the Court of Appeal made in Episode 5 has been overturned, and the original decision of the District Judge made in Episode 1 will stand.  The Supreme Court made the following points:

1. The Court of Appeal had not given sufficient weight to the mother’s clear wishes.  She did not want her daughter to benefit from her estate and this should have been taken into account.
2. The Court of Appeal had also not given sufficient weight to the long estrangement between the parties – although the Supreme Court emphasised that awards under the Inheritance Act are neither rewards for good behaviour or punishment for bad.  Whilst Ms Ilott had clear financial needs, the Court also emphasised that many charities rely on bequests for their income, and any award made in an Inheritance Act claim will impact on the beneficiary who consequently loses out.
3. The level of maintenance awarded in any particular case is not limited to subsistence level but nor does it mean simply providing whatever the Claimant says they need.  It should be the provision of income rather than capital, but it might be most appropriate for it to be provided in the form of a lump sum from which both income and capital could be received . ‘Maintenance’ might include a car to allow someone to get to work, white goods and redecoration for a property, a life interest in a property and a holiday.
4. For any Claimant who is not a spouse, they will probably need to show a moral claim as well as the need for maintenance.
5. State benefits will be one of the resources of the Claimant, and the Court has to consider (with evidence) what effect a judgment will have on state benefits.

Very few Inheritance Act claims ever reach Court – most involve disputes within a family where people do not have the appetite for airing their dirty laundry in public, or where the size of the estate simply does not warrant it.  In this case, the costs must be many times the value of the estate and many of the barristers involved have worked pro bono.  In addition, this case highlights the slow moving nature of Court proceedings – appeals have to be lodged within 21 days of a decision and yet it has typically taken approximately 2 years between each of the judgments.  10 years from Episode 1 to Episode 6 is a huge amount of time, requiring a degree of stamina (by both the parties and the lawyers) which not everyone would possess (although it appears that an arrangement had been reached between the parties in the event that the appeal succeeded which would mean that Ms Ilott will keep her home).

Anthony Gold specialise in Inheritance Act claims – acting for both Claimants and Defendants (executors and beneficiaries).  For further advice on a claim, please contact a member of our contentious probate team.

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