28 February 2019

Time called on stand-still agreements in Inheritance Act claims?

This week’s judgment in Cowan v Foreman and ors [2019] EWHC 349 provides guidance as to the court's jurisdiction pursuant to section 4 of the Inheritance (Provision for Family and Dependants) Act 1975 (“IPFDA”) and condemns the use of stand-still agreements. In this case the court refused to exercise its power to allow a widow to bring a claim against her late husband’s estate under the IPFDA outside the statutory six month time-limit.

The concise judgment of Mr Justice Mostyn held that the time-limit was intended to avoid unnecessary delay and importantly to spare beneficiaries and the court from being burdened by "stale claims". Perhaps most interestingly, Mr Justice Mostyn concluded that the question of whether to allow a claim to be brought "out of time" was not one of discretion, but a "qualitative decision or a value judgment" (as the court must be satisfied that the claimant has shown (a) good reasons justifying the delay and (b) that she has a claim of sufficient merit to be allowed to proceed to trial).

Mr Justice Mostyn was highly critical of the use of stand-still agreements, suggesting that the practice of agreeing them is to “cock a snook at the clear Parliamentary intention” and should come to "an immediate end".

Whilst this judgment might be troubling for many practitioners, the court helpfully directed that it was preferable for claimants to issue protective proceedings and then apply to have the proceedings stayed (if necessary) for the purpose of negotiations. The extent to which this will also need to be the practice beyond the sphere of the IPFDA remains to be seen.

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