Judgment was handed down by the Court of Appeal in Cowan –v- Foreman [2019] EWCA Civ 1336 on 30 July 2019, confirming that Mrs Cowan can make a claim out of time under the Inheritance (Provision for Family and Dependants) Act 1975 (the Inheritance Act) and thereby allowing the appeal against Mostyn J's judgment at first instance on 25 February 2019.

In this case, the parties were engaging in without prejudice correspondence and had attempted mediation at a pre-action stage; and a standstill agreement had been entered into to suspend the time limit for Mrs Cowan to issue proceedings in order to allow pre-action negotiations to continue.

Following a failed mediation, Mrs Cowan eventually issued proceedings under the Inheritance Act on 12 November 2018, nearly 17 months after the six-month period for the purposes of section 4 of the Inheritance Act had expired.

Section 4 not a disciplinary power: each case turns on its own facts

In refusing Mrs Cowan's application for permission to bring a claim out of time, Mostyn J had drawn parallels with the overriding objective, as per CPR1.1.(2), concerned with managing a claim proportionately and fairly once it has been commenced, stating that:

"a robust application of the extension power in section 4 would be consistent with the spirit of the overriding objective…it would also echo the ever-developing sanctions jurisprudence exemplified by Denton & Ors v TH White Ltd & Ors [2014] EWCA Civ 906."

In allowing the appeal, Asplin LJ disagreed with the parallels Mostyn J drew with the overriding objective; confirming that section 4 of the Inheritance Act is simply concerned with whether, given all the circumstances of the case and the delay, it is appropriate to allow a claim to be issued more than six months after a Grant of Representation.

Asplin LJ disagreed with Mostyn J's view that a robust application of the extension power is necessary, stating that there is nothing in section 4 of the Inheritance Act or in the principles from the case law which requires such an approach to be adopted.

Asplin LJ went further, confirming that there is no disciplinary element to section 4. Unlike the provisions of the CPR, the six month time limit is not to be enforced for its own sake. The time limit is expressly subject to the permission of the Court and is designed to bring a measure of certainty for PR's and beneficiaries alike, rather to protect the Court from 'stale claims' as Mostyn had indicated in his judgment at paragraph [4].

The disciplinary view adopted by Mostyn J at first instance, led him to decide that there must be good reason for the delay. Asplin LJ emphasised that it is not necessarily true that there must be a good reason for all delay in every case, as each case turns on its own facts.

The approach from the Court of Appeal is likely to be welcomed by proposed Claimants and is consistent with the comments of Chief Master Marsh in Bhusate v Patel [2018] EWHC 2362 (Ch), where he stated that to have regard to the overriding objective or the approach to relief from sanctions in Denton when exercising discretion under section 4 of the Inheritance Act "involves conflating issues that, if they are related, are at best distant cousins."

Relevant factors when considering a section 4 application

In allowing the appeal, it was held that Mostyn J had erred in his approach to take a disciplinary view rather than to adopt the proper approach and consider all of the relevant factors laid down in the case of Berger v Berger [2013] EWCA Civ 1305 and to give them appropriate weight in the particular circumstances of the case, including:

  • the size of the estate
  • the length of the relationship between Mrs Cowan and the Deceased
  • whether the estate had been distributed
  • whether any prejudice would be caused were permission granted to make a claim out of time

The Court of Appeal decided that in light of the size of the estate and the value of the claim, although the pecuniary legacies have been paid, there was no risk to the Personal Representatives that any of the legacies would have to be returned to the estate.

Standstill agreements

As above, in this case the parties were engaging in without prejudice correspondence and had attempted mediation at the pre-action stage. The Court of Appeal found that as soon as Mrs Cowan became aware of her true position and had the opportunity to take legal advice, a claim was intimated.

A standstill agreement was entered into by the parties, to suspend the time-limit for Mrs Cowan to issue a claim in order to allow pre-action negotiations to continue. At the time of the standstill agreement, there was no indication that a point would be taken by the Defendants about lapse of time.

In refusing Mrs Cowan's application for permission to bring a claim out of time at first instance, Mostyn J commented that standstill agreements are "...a practice that should come to an immediate end. It is not for the parties to give away time that belongs to the Court."[37]

Further, Mostyn suggested that if parties want to agree to suspend matters to enable them to negotiate, then a claim should be issued and the Court thereafter invited to stay the proceedings.

In allowing the appeal, Asplin LJ commented that without prejudice negotiations, rather than the issue of proceedings, should be encouraged and further suggested that it is unlikely that the court would refuse to endorse the approach of entering into a standstill agreement.

Indeed the use of standstill agreements, aimed at enabling parties to negotiate without the costs associated with issuing proceedings, is consistent with the spirit of the CPR and the practice direction on pre-action conduct.

Collective sigh of relief

The decision of the Court of Appeal is likely to be welcomed by potential claimants in Inheritance Act claims. Practitioners will no doubt welcome the comments on the use of standstill agreements and the consistency in application of the Court's power under section 4 of the Inheritance Act with the recent case of Bhusate –v- Patel.

The decision emphasises that each case is to be considered on its own facts and the decision to exercise the power under section 4 of the Inheritance Act is dependent upon an evaluation of all of the relevant factors and circumstances in the present case.