Can you stop the clock on Inheritance Act claims?
Standstill Agreements are widely used in cases where parties are attempting to resolve inheritance matters themselves, but are up against time restrictions, specifically the date on which you have to issue a claim to keep it alive, known as the ‘limitation date’ (which is set out in the Limitation Act 1980).
The idea of ‘stopping the clock’ on Inheritance Act claims is appealing. It allows both sides to raise enquiries and engage in discussions to resolve a dispute without the pressure and expense of issuing proceedings. It is understandable why lawyers seek to expand the use of agreements into other areas of law, such as in Inheritance (Provision for Family and Dependants) Act 1975 claims.
What does the Inheritance Act 1975 say about claims?
Section 4 of the Inheritance Act 1975 requires claims to be made before the end of the six-month period from the issue of a grant of administration. This length of time can pass all too quickly, particularly when families are locked in unfriendly negotiations or necessary enquiries involve historic medical and financial records.
So why not reach an agreement to extend the time in which a claim can be issued? Why not stop the clock? Claims can go ahead outside of the six-month period. However, section 4 clearly states that an application cannot be made after the period ‘except with the permission of the court’. Consequently, it’s a decision for the court to make, not the parties involved.
Case study: A reminder to executors to remain neutral
Our Dispute Resolution solicitors recently advised the executors of an estate in which beneficiaries and interested parties were involved in drawn-out negotiations which had come to a standstill. One of the parties seeking an interest in the estate had presented a series of Standstill Agreements, supposedly to allow parties more time to talk.
The executors were reminded of their duty to remain neutral in the dispute in which both sides have repeatedly executed Standstill Agreements. However, and on our advice, our clients issued a number of warnings to all involved that, whilst the executors may choose not to rely on a defence that the claim is out of time, this was a matter for the court, who may not look favourably upon anyone seeking to take control of their authority.
Case study: It’s for the court to decide, not the parties
This view has recently been in the case of Cowan v Foreman & Others, overseen by Mr Justice Mostyn in the High Court family division. Mostyn J was clear that the court would look unfavourably on late applications in the absence of highly exceptional factors, e.g. if someone is mentally incapacitated. The judge refused a widow permission to claim against the estate of her late husband after filing her application nearly 17 months out of time, despite the presence of a Standstill Agreement.
The judge insisted it was for the court, not the parties, to decide on acceptable time periods in an inheritance claim. He said that the written rules and law (legislation) were unambiguous and clear. Mostyn J added that the correct approach was to issue the claim in time and then invite the court to pause the proceedings while negotiations are pursued.
Further information on Inheritance Act claims and Standstill Agreements
Where the court has authority to only entertain a claim that is brought in time, you have to rely on the judge’s discretion to allow a claim out of time, such as in 1975 Act cases. A Standstill Agreement will not necessarily mean that the court will allow you to do so. Barcan+Kirby advise that parties issue the claim, then agree a stay, rather than rely on Standstill Agreements in these cases.
Whilst decisions in such cases will always turn on the individual facts, the risks of relying on Standstill Agreements in such matters is plain to see.
Our litigators can advise you on claims, time limits for applications, and the best way to deal with both.