Court of Appeal overturns decision on deadline for 1975 Act claim

The Court of Appeal has allowed a widow to bring a claim out of time for further provision from her husband’s £29m estate, overturning the controversial order dated 25 February 2019 of Mostyn J in Cowan v Foreman.

The issue

A claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the Act) should be made within six months of the grant of representation. Late claimants must apply for special dispensation to bring a claim after this time limit has expired.

It is common practice for parties to a potential claim to enter into standstill agreements to extend or suspend the time limit, usually to allow time for negotiations to reach a settlement.

The facts

Mrs Cowan’s claim to receive provision from her late husband’s estate was 17 months out of time. Her solicitors had entered into a standstill agreement with the trustees of the trusts created by Mr Cowan’s will to suspend the Act’s time limit (albeit this was done after the time had expired). 

In a surprising decision, Mostyn J dismissed Mrs Cowan’s application for an extension of the Act’s time limit. He stated that the common practice of using a standstill agreement “should come to an immediate end”, causing concern among estate practitioners.

In a judgment that signals to lower courts that reasonable extensions should be allowed, the Court of Appeal overturned Mostyn J’s judgment, noting in particular that:

  • it was inappropriate to draw an analogy between cases such as these and the strict rules that apply to applications for relief from sanctions;
  • the time limit should not be enforced for its own sake, but only if that is right and proper. A disciplinary approach would be inappropriate; and
  • there is a clear place for standstill agreements: “without prejudice negotiations rather than the issue of proceedings should be encouraged”. The court took a pragmatic view that whilst the court could still refuse to extend time, if a standstill agreement has been signed between legally represented parties, “it would be unlikely that the court would refuse to endorse the approach”.

Points to note

Estate practitioners can take comfort from the judgment that the common practice of using standstill agreements is appropriate. However, they must be used carefully: the court emphasised that any agreement should be in writing, signed by all the parties, and should clearly set out the terms and duration of the extension.

Where the normal time limit has been missed, this judgment gives considerable ammunition to claimants to obtain an extension, and we expect Asplin LJ’s guidance as to the proper approach to be quoted extensively. Nevertheless, a claimant always takes a risk by issuing after the normal time limit has expired; where possible, claims under the Act should be made within six months of the date of the grant of representation.

Read the Court of Appeal judgment here.