A recent 1975 Act claim judgment opened with a play on ABBA and went on to award the claimant, who co-habited with the deceased for just over three years, a home for life, a capital payment and, unusually, a contribution towards her legal team’s success fees (under their funding agreements) from a sizeable estate. The couple had gone to an ABBA tribute band at some point in their relationship, allowing the Judge licence to demonstrate familiarity with popular culture…
Yvonne and Simon struck up a friendship in 2007 (Yvonne worked at a petrol station which Simon regularly used). They both subsequently married and Yvonne moved away, but they stayed in touch, speaking on the telephone most weeks (a fact they did not appear to share with their respective spouses).
In 2010, Yvonne found herself unable to work and reliant on benefits. Simon offered to help her (and her husband) out financially, acting as guarantor for their tenancy.
Both marriages broke down and Yvonne and Simon grew closer. Romance developed and Yvonne moved in with Simon (to his home, near his farm) in December 2013.
Yvonne and Simon did not have a joint bank account nor did they pool their income, but they did their food shopping together. They could not go on holiday because Simon could not leave his farm, but they went on dates, for example, to an ice-skating display in Hull and seeing an Abba tribute band.
They had some tensions in their relationship – Simon apparently had a habit of putting dead game in the fridge after a hunt which he might later skin, cook and eat, which Yvonne felt was unhygienic. Yvonne and Simon’s close friend, Arthur did not get on (and Arthur later alleged that, at one point, Yvonne assaulted him).
Simon made a Will in April 2015 leaving his estate to his brother Christopher. He named Christopher and Arthur as his executors. He told the solicitor who drafted the Will that he did not have a partner.
In the spring of 2015, Yvonne caught the flu. Simon went out for the day with Arthur, rather than looking after Yvonne. Simon then became ill, and Yvonne went to visit her son rather than looking after him. This triggered a ‘rocky period’ in the relationship. Yvonne moved out in July 2015, although continued to see Simon and go to the pub together (and do his laundry).
By February 2016, Yvonne and Simon had reconciled and she moved back into his house. They continued to go out on day trips and bought two donkeys together.
On 4 May 2017, Simon sadly collapsed at home, aged 56, having suffered an aneurism. He passed away the next day.
Yvonne brought a claim for reasonable financial provision under the 1975 Act. She said that she qualified as a cohabitee as she had been cohabiting with Simon for the minimum two years before he passed away. Even if she did not qualify as a cohabitee, Simon had supported her financially and so she qualified to claim as a dependant.
- Was Yvonne cohabiting with Simon for two years before his death?
- Christopher and Arthur defended Yvonne’s claim (as the Judge criticised) ‘vigorously’.
- Their barrister cross-examined Yvonne at length as to whether she was in a romantic relationship with Simon or whether she was, in fact, his housekeeper or friend whom he assisted by providing a roof over her head. The evidence showed that Simon had told some of his friends that Yvonne was his housekeeper.
- The cynicism about Yvonne and Simon’s relationship extended to instructing a handwriting expert to analyse Yvonne and Simon’s Christmas and Valentine’s Cards.
- In his judgment the Judge said ‘I never understood why that mattered’, as Christopher and Arthur had already accepted that Yvonne qualified to apply under the 1975 Act as a dependant.
- In any event, the Judge decided that Yvonne and Simon were in a relationship from late 2013 to his death; even though Yvonne moved out in February 2016 (ie during the two year period before Simon’s death), their relationship had not ‘irrevocably broken down’ and they remained living in the ‘same household’.
- What is reasonable financial provision?
- Yvonne’s income and outgoings fluctuated throughout her evidence, but it was clear that her outgoings exceeded her income, she had debts of around £25,000 and, if she succeeded in her claim, she had potential future debts to her first solicitor under a damages based agreement and her second solicitors and barrister under conditional fee agreements. Yvonne sought a property (worth up to £198,000), a new car, replacement of white goods, and a capital cushion of £20,000.
- Arthur and Christopher argued that Yvonne should receive, at most, a payment representing two years rent.
- The Judge ordered that Yvonne be given £140,000 to purchase a property on a life interest trust, with independent trustees. This corresponded to the obligation which Simon took on when he invited her to live with him (and had the advantage of capital returning to Simon’s estate when Yvonne passed away). The Judge awarded Yvonne a further £6,000 for removal expenses and legal advice in relation to the trust.
- He also awarded her £10,000 to buy a new car, £24,000 as a lump sum to repay her debts and £5,000 to replace her white goods.
- Finally, the Judge considered whether he should make a further payment for Yvonne to meet liabilities to her solicitors and counsel. Christopher and Simon resisted (on the basis that, under general costs rules, a successful party is unable to recover their success fee from the losing party).
- The Judge acknowledged that deciding the case in Yvonne’s favour may leave her, conversely, in a difficult financial situation – with significant liabilities to her solicitors which she could not recover from Arthur and Christopher as part of her costs. He decided that the success fees should be treated as a debt that Yvonne has incurred since Simon’s death and are part of her future financial needs – so he should take them into account, looking at the ‘reality of the situation’. He awarded her £25,000 to assist with these payments.
Less than a month later, Mr Justice Cohen in the High Court found himself also looking at solicitors’ success fees in an anonymised 1975 Act claim (known as SH v NH and KH).
Mr Justice Cohen commented on Yvonne’s case, saying that he thought that the £25,000 awarded to Yvonne was likely to be less than half the success fees that Yvonne’s legal team were entitled to. In his case, he decided that ‘it would not be fair on [the Claimant] for me to ignore completely her liability to her solicitors’ and awarded, as part of the Claimant’s needs, a 25% uplift on the costs (her solicitors were entitled to 72%).
Even though in both cases, the Claimants were left bearing some, but not all, of their advisors’ success fees out of their award, both Judges attempted to ‘make right’ the risk that in awarding what they regarded as reasonable financial provision should not be fundamentally undermined by the subsequent burden of success fees.
However, this opens the door for claimant’s solicitors to assume that they can add in a success fee to their clients’ claims, circumventing Lord Justice Jackson’s costs reforms which, in 2013, effectively put an end to the recovery of success fees from the other side in litigation.
Inevitably there may be unsavoury consequences where judges make awards on costs as part of the substantive 1975 Act decision (rather than, as usual, making their decision on the claim and then making a separate decision on costs, taking into account any offers made). Including the success fee as part of the substantive award undermines a significant plank of the Civil Procedure Rules designed to drive parties towards resolution well before trial.
If the Defendants had made a Part 36 offer which the Claimant had rejected and then at trial only ‘beat’ that offer because the Judge had added an element of the solicitors’ success fee to the award they might legitimately have complained ‘But I was a fool, playing by the rules…’.