CAN I CLAIM MY SOLICITOR’S SUCCESS FEE FROM THE LOSING SIDE IN AN INHERITANCE ACT CASE?
WillClaim Solicitors, specialist no win no fee will dispute and will contest Solicitors, discuss the 2024 Supreme Court decision in Hirachand v Hirachand. The court ruled that the ‘success fee’ portion of a winning side’s legal costs could not form part of an award under the Inheritance (Provision for Family and Dependants) Act 1975. We also explain how we handle will contest cases for clients without charging the kind of success fee discussed in the case.
What is a success fee?
Even when you have a strong case for challenging a will or bringing a claim under the Inheritance Act, success in court is never guaranteed. And going to trial is a significant financial risk. If you lose, how will you pay your legal costs and those of your opponent?
So-called ‘conditional fee arrangements’ (CFAs) are one way of reducing the risk of an unsuccessful party’s exposure to hefty legal fees. CFAs are common in a range of legal disputes, including will contests. Clients and their solicitors agree that the solicitor’s fees will only have to be paid in certain, limited circumstances – usually if the client wins the case.
CFAs are sometimes called ‘no win no fee’ agreements.
To reflect the risk being shouldered by the solicitor in taking the case on with no guarantee of being paid, CFAs often include a provision that the solicitor’s fees will be increased by a certain amount if the claim is successful – a ‘success fee’.
CFAs are complex legal agreements, and you should be comfortable with the terms before entering one. In particular, you should consider how your opponent’s fees will be met if you lose the case. Often, it’s possible to take out after the event insurance to meet these costs in appropriate cases.
What happened in Hirachand v Hirachand?
The case is a useful illustration of the complexities of CFAs. It examines whether success fees payable under this type of arrangement can be treated as a financial need of someone making a clam for financial provision under the Inheritance Act.
In the case, the deceased Navinchandra Dayalal Hirachand died leaving a widow, a daughter and a son. In his will he left everything to his widow. The daughter, who is disabled and cannot financially support herself brought a claim for financial provision from the deceased’s estate under the Inheritance Act.
To bring her claim the daughter entered a CFA with her solicitor. Under the agreement, if she lost the case, her solicitor and barrister would not receive any fee. If she was successful however her lawyers would receive their base fee as well as an uplift of 72% of this fee (a success fee).
The daughter’s claim was successful, and she was awarded a six figure sum by the High Court on the basis that the deceased had not made reasonable financial provision for her.
As part of the award the High Court included a contribution of £16,750 toward the success fee which the daughter was liable for under the CFA. In effect the High Court judge took the view that, given the daughter had no choice but to pay the success fee, it formed part of her financial needs
The widow appealed on the basis that the court was not empowered to include a success fee under a CFA in an award for financial provision under the Inheritance Act. Her appeal failed in the Court of Appeal, and the Supreme Court was required to resolve the issue.
The Supreme Court decision
It was almost a year from the hearing in January 2024 until Lord Richards delivered the unanimous decision of the Supreme Court in December 2024. It was a ruling that was eagerly awaited by practitioners because of the potential consequences for the funding of will contest cases.
Lord Richards explained that historically the liability of one side in litigation to pay the costs of the other has generally been treated separately from the case itself. When it came to a successful party being able to recover a success fee under a CFA as part of a substantive award, Lord Richards acknowledged that the approach of the courts has varied but he was clear that the logical position is that success fees should not be recoverable.
In Inheritance Act claims specifically, the court is required to have regard to the financial resources and financial needs of the applicant in determining whether reasonable financial provision has been made. A success fee was not, in the court’s view, capable of being treated as a financial need or resource of the applicant.
In short then, the Supreme Court agreed with the widow and ordered that the amount attributable to the success fee should be deducted from the daughter’s award for financial provision.
This decision in Hirachand is consistent with another case on costs in Inheritance Act claims, Jassal v Shah. Although that case concerned litigation costs generally, not success fees, it was nevertheless referred to extensively in the judgment of Lord Richards and it’s one which we have previously discussed.
How we charge for a will contest case
The discussion in Hirachand around success fees and the Supreme Court’s ultimate decision that such fees cannot be incorporated into an award for financial provision is important. It should be remembered that in practice the deduction of a success fee from a claimant’s award reduces – in some cases substantially – the net amount received by that claimant. If success fees could instead be added to an award, as the Court of Appeal had suggested, then claimants and their lawyers would have a greater incentive to pursue less deserving, weaker and even frivolous cases.
For clients of WillClaim Solicitors the treatment of success fees linked to CFAs is largely academic. That’s because we do not include any kind of success fee in our no win no fee CFAs. We only charge if the will contest or will claim is successful, and most of the costs can be recovered from the opposing party or the estate. Often, we will reduce our fees in the interests of finding an acceptable overall settlement for our clients.
Contact WillClaim Solicitors
If you consider any of these facts and matters are of interest, are likely to apply to you, or
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