Inheritance Claims and the importance of mediation highlighted again in the case of Rochford v Rochford

Mediation is an effective form of alternative dispute resolution used to settle disputes outside of the courts.

The recent unreported case of Rochford v Rochford highlights the importance of parties taking part in mediation before proceeding to trial and the sanctions of the court where they have declined to do so.

The Claimant was due to receive £25,000 under the Deceased’s will (the Claimant’s father). However, she pursued a claim under the Inheritance (Provision for Family and Dependants) Act 1975 claiming that the will did not make reasonable financial provision for her due to her disability and lack of income. The Deceased’s residual estate was approximately £193,000 in total.

The Claimant was willing to attempt to mediate the dispute rather than the case proceeding to Trial. The Defendant, the Deceased’s sister, argued that financial provision should not be made as the Claimant owned a freehold property valued at approximately £500,000 and that her relationship with the Deceased was difficult.

The Defendant maintained that the claim was weak and lacking evidence and as such, refused to attend mediation.

The matter did not settle and the case proceeded to a two day Trial. The court found that the Claimant’s capital assets would not prevent a claim under the Inheritance (Provision for Family and Dependants) Act 1975 where the assets cannot be liquidated easily (maintenance of the property was also required).

The Court awarded the Claimant a lump sum payment of £85,000, in addition to the £25,000 provided for under the Will.

Further, the Defendant failed to beat the Claimant’s Part 36 offer. A Part 36 offer (usually payment of a sum of money) can be made by either party of a dispute to attempt settlement with a view to avoiding a Trial. Where a party has refused a Part 36 offer and loses at trial or does not achieve an award higher than the Part 36 offer, the costs consequences can be considerable.

As a result of the Defendant’s refusal to mediate and failure to beat the Part 36 offer made by the Claimant, in addition to the payment of the £85,000 and £25,000 from the Deceased’s estate, the Court ordered that the Defendant pay

  1. an additional 10% of the judgment,
  2. interest of 5%; and
  3. payment of the Claimant’s costs incurred (on an indemnity basis, to be assessed) with an interim payment of £60,000 towards these.

This case serves as a warning that parties should attempt to mediate at the earliest opportunity, particularly when dealing with small estates, to avoid the accumulation of costs. A failure to attempt mediation or tactical approaches to avoid it can have severe consequences at trial.