Under the influence

Posted on: March 1st, 2018

The Law Commission’s consultation on will reform closed recently. While its proposals on electronic wills grabbed the headlines, Chris Gambs argues its recommendations on reforming the law on undue influence are needed more – and have a much better chance of being implemented

Chris Gambs is an associate solicitor in the Inheritance and Wills Disputes team in Portsmouth.

The question of testamentary undue influence typically arises where one party surprisingly benefits to the exclusion of others, or there has been a sudden change to that effect. As the UK population ages, this is a situation that is going to become more prevalent, as over-65s tend to be more susceptible to financial abuse relating to the execution of their will and lifetime payments.

This area of law is confusing and inconsistent because, in the case of lifetime payments, undue influence may be presumed in certain relationships and where the transaction calls for an explanation. In the case of will challenges, it must be proved in all cases and no presumption arises.

The burden of proof in testamentary undue influence claims is very high; it is necessary to prove actual undue influence by coercion. Merely exerting even strong persuasion is not enough for a will to be voided (see Re Edwards [2007] EWHC 1119 (Ch)). In practical terms, even where there are strong suspicions, undue influence is therefore rarely pursued because of the huge cost risks involved.

Because of the evidential burden, cost risks and reluctance to allege fraud within what is often a family dispute, in practice undue influence is usually circumvented by relying on the alternative claim of lack of knowledge and approval as to the terms of the will. Whilst founded on the same facts, this alternative claim is preferred, because the test is easier to establish and, where sufficient grounds are raised, the burden of proving the will falls on the estate, together with costs.

The Law Commission consultation
One could say that the law is not working in practice to properly protect testamentary freedom where undue influence is present but isn’t pursued – when, rightly, it should be. This rather unsatisfactory state of affairs has been scrutinised in the Law Commission’s public consultation on reforming the law of wills from last year, although the press coverage was dominated by the topic of electronic wills.

The Commission examined whether there should be one unified principle of undue influence to bring about consistency and to ensure claims are pursued on the proper basis. The Commission was, however, eager not to propose reforms that both diluted freedom of testamentary expression and encouraged spurious claims.

Stakeholders highlighted the fact that financial abuse is most often carried out by family members or professional carers. The Commission stresses for the vast majority of families, such care is entirely proper and that any change in the law should not dissuade such socially beneficial arrangements due to the acts of a minority.

The Commission believes that one general doctrine of undue influence would be unworkable. For example, if a will did not correspond with a social norm, where, say, it favoured one child over another, that should not give rise to a presumption of undue influence. The beneficiary may have been unaware of the bequest and was unable to encourage the testator to take advice to avoid the presumption arising.

The Commission recommends reform through a structured, two-tiered test. A presumption of undue influence would arise where, first, there is a relationship of influence and, second, a disposition calls for an explanation. That follows the general doctrine, but the irrebuttable presumption would only arise where the testator’s relationship is with trustees; medical advisers; paid will drafters; or professional carers. This doctrine would not extend to family relationships, where actual proof would still be required.

The test is applied by considering the conduct of the beneficiary in making the will and the circumstances in which it was made. This would avoid problems with innocently-favoured children, for example, but the Commission warns that the test should not be applied too widely, for example, to catch family members who innocently arrange will appointments for elderly parents or relatives.

I have no doubt that if the Commission’s recommendations make it onto the statute book, it will inevitably lead to further litigation, to test the application of the new approach. However, the concepts should all be widely understood by solicitors and, arguably, the proposals mark a shift in focus rather than a fundamental resettling of the law, which would be unwelcome.

The Commission also recommends that the law on knowledge and approval should be limited to its narrowest interpretation. The test should be confined to whether the testator knows that they are making a will and what its terms are, and intends those terms to be incorporated and given effect in the will. A consideration of whether the terms of the will have been given freely should be limited to the revised law of undue influence. This approach seems logical and coherent to me.

What happens next?
The public consultation closed in November 2017 and the report to Parliament is being prepared. While it may take some time for Parliament to consider the report, the Commission does have a good track record when it comes to the ultimate implementation of its recommendations. I doubt the headline-grabbing proposals on electronic wills will get past the finishing post, but the Commission’s recommendations on undue influence deserve to be followed through. They represent a sensible evolution of the law that will allow claims to be dealt with on the right basis and considered within an easily understood framework.
This article was first published in the Law Society Gazette Private Client Section Magazine in February 2018.