How to avoid a boom in UK succession disputes

This may not be welcomed by those in the midst of a bitter dispute. We often see people in difficult financial situations, but what tends to be more distressing is the family aspect. If the deceased has left an individual less than expected, for example, it is natural for that person to feel that perhaps they were not as loved or valued as others. Sibling rivalries frequently come to the fore, as do issues between step-parents and step-children.

As a result, many people are willing and even determined to go to court. However, in our extensive experience it is rarely in their best interests to do so.

The first reason is expense. Court costs can severely diminish even a significant estate. Another is the emotional cost. The court process will take months, and can take years – prolonging financial uncertainty, stress and heightening painful family disagreements.

Privacy is also very difficult to protect when you are going through a court process. The press may well take an interest in these kinds of disputes, even if no one involved has a public profile. Moreover, people who are not involved in proceedings may be able to get copies of court documents and perhaps make a claim of their own.

We therefore advise those we are acting for to consider alternative methods of dispute resolution at an early stage.

In some cases it may be as simple as writing a letter of claim before getting everyone together for a settlement meeting. While this may not always be appropriate – it is very difficult for parties to trust each other where there are allegations of fraud, for example – we have seen many cases resolved in these early stages.

Mediation is another helpful option. We have seen many times how managing a dispute outside of the courtroom can help to de-escalate conflict. Mediation is private, and can also be much more flexible than court, giving the opportunity to find a creative solution.

In one case where we acted, the two sides began their day with a seemingly intractable dispute between two siblings, covering a number of issues. However, the mediator eventually established that one sister’s real priority was to receive certain items of jewellery owned by the deceased. The other sister was quite willing to give those up for other assets that she could sell*.

We believe that for their own sake, and families’, legal systems need to be encouraging other ways of resolving cases.

In another, we represented a mother in a dispute with her adult children over a family inheritance. Despite having been estranged for many years, they were able to sit down together at mediation and agree a way forward. By the end of the day, they had managed to re-establish a friendly relationship. All parties were delighted*.

Besides the personal benefits, courts are very encouraging of mediation, and may take a dim view of parties who have not at least attempted it. We have even seen one judge take it upon himself to act as a mediator, telling the deceased’s wife and her stepchildren, who were adamant that their stepmother would not receive “their” inheritance and had refused to mediate, that they needed to make an effort to compromise. His unusual action on what would have been the first day of a highly charged court trial led instead to a settlement.

There are cases where mediation will not be possible – especially where there are allegations of fraud or dishonesty. And there is always the risk that someone’s desire to preserve family relationships will be abused by a more cynical party.

We have seen many times how managing a dispute outside of the courtroom can help to de-escalate conflict.

We acted for a father who was very generous in mediation because he wished to re-establish a relationship with his son. Unfortunately, it seemed the prospect of doing so was held out by the son only to get what he wanted in the mediation*.

While no one can be compelled to compromise at a mediation, there is a non-court option available to have an outcome imposed on the parties by an independent person. Arbitration Is a process commonly used in business disputes, very similar to court proceedings, but with a privately paid arbitrator instead of a judge.

The key benefits are speed (arbitration can be organised more quickly and tends to be run efficiently) and privacy (as in mediation, arbitration is kept confidential unless the outcome has to be approved by a judge).

The limitation is that at present not all jurisdictions allow arbitrations where there are minors involved. In the UK, the Law Commission is looking at changing the law to permit arbitration of trusts disputes. We hope that they will advise a change in the law, so that a professional can represent underage or unborn children’s interests at arbitration and the outcome will be binding.

We also hope that courts will continue to encourage parties to use alternative approaches – in time, using ADR could even become a formal requirement for going to court².

This will mean that even with rising numbers of cases arising from Baby Boomer estates, fewer clients are likely to see the inside of a courtroom. But more will benefit from privacy, speed and the satisfaction of a good outcome.

*Some details have been changed or omitted to protect confidentiality.

¹ https://www.ftadviser.com/investments/2021/04/27/what-are-the-real-implications-of-intergenerational-wealth-transfer/

² A report published last July by the Civil Justice Council concluded that compulsory ADR was both compatible with Article 6 of the European Convention, ‘lawful’ and ‘should be encouraged’.

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