‘CFA fees in Inheritance Act claims’

The Supreme Court has granted leave to appeal in Hirachand (Appellant) v Hirachand [2021] EWCA Civ 1498. No reasons were stated. For a withering critique of the judgment on this website, search for, ‘Inheritance Act – 25% CFA cases – Hirachand v Hirachand (CA)(2021)’, in which I wrote: ‘A costs order made in proceedings may not include provision requiring the payment by one party of all or part of a success fee payable by another party under a conditional fee agreement, see: Legal Aid, Sentencing and Punishment of Offenders Act 2012, s.44: Legal Aid, Sentencing and Punishment of Offenders Act 2012 (legislation.gov.uk), see also: CFA Success Fees in Claims under the Inheritance | Ashfords Solicitors; and sections 8 (Offers to settle) and 9 (Costs in 1975 claims) of Chapter 7 of ‘Inheritance Act Claims’ by Sidney Ross. Is this decision likely to result in an increase in the making of hopeless (i.e. unmeritorious) claims using high success fees as leverage to negotiate a bigger settlement for Claimants, who on a forensic (i.e. legal merits based) analysis, have an unrealistic expectation of recovery at trial? In effect, what the court has done, is to shift the litigation risk of a successful claimant being unable to pay their own irrecoverable legal costs (i.e. the success fee), on to the defendants. Does this mean that Part 36 Offers will now need to arithmetically include an amount for a contribution to a CFA success fee, e.g. of 25%? … Has the court shifted the goal posts, to the advantage of unworthy claimants, at the expense of estates. If they have, is this likely to result in even more litigation and not less? The uncertainty this decision has created is not limited to just a future merits based analysis of Inheritance Act claims, and its impact upon the drafting and effect of settlement offers, it also leaves both practitioners and judges adrift about how in principle a contribution is to be calculated, as quantification of the contribution in this case was based upon supposition. Making an educated guess in any case is an unreliable method of quantification, because a belief may subsequently turn out to be based upon a false premise. By contrast with an empirical method, “best thinking” based upon supposition is both subjective and arbitrary. Consequently, it is prone to bias, which could result in an appeal. Has this decision increased the litigation risks involved in these claims, by adding yet another element of uncertainty into what is already a rather muddled, incoherent and unstable equation? Has the court just pushed up the price of doing a deal in mediation, i.e. where mediation is preceded by the making of a Part 36 Offer? I think it has. The problem now, is working out in any given case, “by how much?” Therefore, the earlier parties proceed to mediation, the better.’