High Court Decision Challenges the Validity of Inheritance Act “Standstill Agreements”

Inheritance Act “Standstill Agreements” Under Scrutiny Following High Court Ruling

In a landmark decision that could reshape the landscape of inheritance disputes, the High Court has cast significant doubt on the future of “standstill agreements” under the Inheritance (Provision for Family and Dependants) Act 1975. This ruling, which emerged from the case of Cowan v Foreman [2019] EWHC 349 (Fam), has sent shockwaves through legal circles, potentially altering how parties approach the statutory time limits for making claims against estates.

Traditionally, parties involved in disputes under the 1975 Act have utilised standstill agreements to extend the six-month deadline for launching claims following the grant of representation. This approach, aimed at fostering settlement negotiations without the immediate pressure of court proceedings, has been viewed as a pragmatic solution to the rigid time constraints imposed by Section 4 of the Act. Such agreements have been seen as a way to encourage compromise and reduce the burden on court resources.

However, the recent judgment by Mostyn J has thrown the validity of these agreements into question. In a scathing critique, the judge condemned the practice of standstill agreements as an overreach by the parties involved, suggesting that it undermines the authority of both the courts and Parliament. The judgment emphasises that only the court has the jurisdiction to grant extensions beyond the statutory deadline, regardless of any agreement between the disputing parties.

The decision highlights several concerns associated with delaying claims, including the potential for complicating the administration of estates, the distribution of assets before claims are resolved, and the imposition of unnecessary stress on all parties involved. Moreover, Mostyn J underscored the importance of adhering to the Overriding Objective and the principles of “sanctions jurisprudence,” indicating that delays should be measured in weeks or, at most, a few months, barring exceptional circumstances.

This ruling signals a significant shift in how inheritance disputes may need to be handled moving forward. Solicitors and parties involved in such disputes are now faced with the urgent need to reassess their strategies, particularly in cases where the six-month limitation period has expired under the assumption that a standstill agreement would suffice. The judgment suggests that claims should be filed within the statutory timeframe, with any negotiations for settlement occurring concurrently under the court’s supervision.

Additionally, the decision sheds light on two notable aspects of claims under the 1975 Act. Firstly, it aligns the test for granting permission to apply out of time with the criteria for summary judgment, requiring applicants to demonstrate a “real prospect” of success. Secondly, it challenges the notion that a widow is entitled to guaranteed provision from her spouse’s estate, hinting at a rejection of “forced heirship” in English law.

The implications of this ruling are profound, urging legal practitioners to reconsider the use of standstill agreements and to ensure that claims are promptly initiated within the prescribed deadlines. As the legal community awaits further developments, this decision underscores the paramount importance of adhering to statutory time limits and the court’s authority in inheritance disputes.