Personal Estoppel

Despite testamentary freedom being a central tenet of English law, we have seen in recent years an extraordinary increase in the number of cases taken to Court, challenging wills and over promises made about who inherits land.  On figures up to 2017, Direct Line Group research found that an analysis of figures supplied by HM Courts and Tribunals service shows the number of disputes regarding applications for probate increased by an estimated 6% in 2018.

Why the increase? One of the main drivers is that family homes, often the only asset in the estate, are worth more. One need only look at house prices in the UK over 1975 - 1996 which hovered around £110,000. The next 20 years saw the average price rise to nearer £215,000, well beyond inflation.  If the family home has significantly increased in value, there could be equity in the estate which is far beyond the savings or earnings the elderly generation enjoyed in their lifetime. Whereas many people might be disappointed with the contents of a will of a loved one, the costs, time and uncertainty of a claim at Court may simply not be worth it. But sadly, where there is more to fight over, the cost-benefit changes.

There are multiple other reasons for increased claims, including the increase of cohabiting couples who may not be provided for in an intestacy. There is also greater awareness, for example, the llot v Mitson case brought under the Inheritance Act 1975 Act, and other high profile Court cases. 

What is proprietary estoppel?

In a proprietary estoppel claim, the following ingredients must be established:-

  1. An assurance is made – a promise which raises a reasonable expectation that the Claimant will be given an interest in land;
  2. The Claimant relies on the assurance;
  3. The Claimant suffers a detriment as a consequence of reasonably relying on assurance; and
  4. It would be unconscionable for the promise-giver to go back on the promise made.

If such a claim is established, the Court can intervene to grant a remedy if it considers it just to do so. The Court’s powers to do so are wide: they range from an award of money so the Claimant is not out of pocket, to transferring property into the Claimant’s name. There are some more dramatic awards which demand that the partnerships come to an end and family homes being sold, even despite this giving rise to an inefficient tax position. Such cases usually entail a long period of uncertainty, legal costs, and tend to deepen the mistrust and strained relationships. It is therefore prudent to consider the kinds of issues which are being seen to arise commonly, and plan to avoid conflict so far as possible.

What amounts to detrimental reliance?

In the case of Bradbury v. Taylor in 2012, where the clamant had moved house to another part of the country, and away from family, to provide companionship and care, this was held to be sufficient detriment.  In Lothian v. Dixon [2014] the claimants had moved from Scotland to Scarborough to support and care for a family member who later died was held to be sufficient detriment. This was despite the fact that had the benefit of living at the deceased’s property rent-free.

A proportionate remedy?

Whilst traditionally when considering remedies for proprietary estoppel claims, the Court will may look at the minimum necessary to do justice. In recent cases, the Court has tended to be more generous in their approach to such claims.

It is worth noting that in some of these cases, the claims were brought in circumstances where the people who had made the promises were still alive, and become defendants to the claim and the Court will consider the impact of any decision on them. When the promisor has died however, the estate and beneficiaries will be affected, but the Courts tend to be more willing to provide more generously for the claimant.

What steps should be taken to avoid a dispute?

Disputes often arise when succession has not been provided for and clearly communicated to all the family, or an event occurs which turns the expected course of events on its head. There really is no substitute for sitting down and talking about the future and understanding the needs and expectations of all those involved.  

In summary, despite testamentary freedom (the right to choose what happens to your estate when you die) being a fundamental tenet of English law, it is important to recognise and plan for the eventuality that someone could challenge your will. Whilst no process is bullet-proof to a challenge, there are certain steps which are sensible to take:

  1. Talk to your family, and friends and those who you wish to benefit from your estate
  2. Seek advice from a will drafter and estate planner.
  3. Record your reasons for making decisions, especially if what you leave in your will might raise eyebrows or which could have a negative reaction.