Mediation and Inheritance Disputes

At the end of my piece on Bleak House and the Court of Chancery I wrote:

That is enough for today.  In another blog I will write about the need for a greater understanding of the value of mediation in resolving inheritance disputes, however intractable: I helped to resolve many of them myself during the days I practised as a mediator after I had retired from the Bench.

I am now fulfilling that promise.

When I retired from the Bench in 2006, I wanted to do something completely new and different).[1]   I therefore embarked on a new career as a mediator of civil disputes. I have already posted a description of the things I had to learn at the three different training courses I attended. In 2009 I returned to this topic when I told a legal journalist in 2009 that:

“[I]t’s a very, very different role, but there are some similarities. One has got to get on top of the papers – although I know some mediators don’t, but I find it gives more confidence to the parties if I am on top of it.

The process is very different. The whole business of getting a rapport going between the parties and listening to them and exploring what they really want is new. I thoroughly enjoy it. Sometimes you get to 4pm, and you are getting nowhere, but maybe the pressure caused by the process gets through, and by 6pm you can have a settlement.

It helps when you have a third party who is truly neutral who can point out the cost implications of continuing a dispute and that unless there is a resolution they will have to continue paying out and paying out until the loser has to pay all.

You get real job satisfaction. After an emotional day’s meeting, sometimes you ask them if they want to see each other again, and they reluctantly say yes, and then sometimes they have a hug – it’s the relief of reaching a settlement.

Most sides do thank me when a settlement is achieved, and that never really happened very much as a judge.”

Since that time I was kissed a few times by delighted female litigants, and on one occasion a very relieved male litigant gave me a grateful bear-hug because he was so pleased the case had settled.

In the event I conducted over 200 mediations before I retired from practice two years ago. A great many of these were in the fields of personal injury claims, family property disputes or inheritance disputes. Temperamentally I always preferred to be involved in helping to resolve disputes involving human beings rather than corporate bodies.  In this context I found the training I received from Paul Randolph and his team at the Regent’s College School of Psychotherapy and Counselling[2] particularly helpful.

In this blog I am concerned only with the enormous value of mediation in resolving inheritance disputes. I have been able to identify 16 of these which I mediated myself. They all gave rise to a lot of emotion and, often, very bad feelings, and the task of the mediator was to calm passions down and to concentrate on the value of resolving the dispute, so that the different members of the family could get on with their lives without running up further costs and exacerbating fractured relationships even more (particularly if they proceeded to a contested trial).

Of the 16 cases I identified, ten were settled on the day, four more were well on their way to an agreed resolution and only two ended with an agreement to disagree. Of these two, one was coloured by the very strong feeling on one side that a will had been deliberately destroyed after the testator’s death: the size of the estate did not justify the engagement of counsel who might have been able to bring home to their respective clients the ruinous cost of continuing the battle. In the other, the hurt suffered by a wealthy widow who felt that her husband’s executors had not been fulfilling his wishes led her to continue with protracted, costly and ultimately unsuccessful litigation.

In the Annex below I will describe briefly the 14 other disputes in a completely anonymous fashion. I went all over England (and on one occasion, to Wales) and they cover a six-year period. They had the common feature that there was usually a good deal of bad blood between the parties at the outset, but the parties usually wanted to move on, and the mediation process gave them the opportunity to take a properly informed part in the settlement process. Their lawyers were usually extremely helpful, although on two occasions counsel had some difficulty in adjusting themselves to the quite different role played by lawyers outside a courtroom environment. Mediation advocacy is a skill in itself, and  wise lawyers are learning its nuances in increasing numbers.

I have never favoured compulsory mediation. However, in my opinion, based on my experience, there should be a strong (but rebuttable) presumption now that every inheritance dispute is suitable for mediation, so long as the parties are given appropriate assistance in identifying a mediator who has the skills and the temperament that enable him or her to control the emotions that are inevitably likely to be predominant when the parties first meet, and then to keep the trust of all sides throughout the process.

 

ANNEX

The ten cases which settled on the day

First case

Because the solicitors for an executor had wrongly assured the deceased’s daughter that some farmland fell into the residuary estate she was due to inherit, she entered a caveat which led to litigation. A district judge spotted that the case cried out for mediation, and I was able to resolve it within four hours. The solicitor wrote a letter of apology and agreed to bear her costs of the mediation and to go light on the bill he rendered to the executors, and her brothers did not ask for any costs against her. Everyone had wanted to settle, but did not know how to achieve this.

 

Second case

A daughter who had given up a life of her own in order to look after her widowed father for the last 38 years of his life maintained he had promised that she would be his heir. Just before he died at the age of 97 he made a new will, leaving his estate to a charity but letting her live in his house so long as she paid 30% of a market rent, and giving her the benefit of a life interest in the capital of the deceased’s estate. She maintained that she was entitled to the benefit of a proprietary estoppel and that her father had lacked testamentary capacity when he made the new will. Both these issues would have led to a very expensive dispute if they had been taken to trial, and the case was resolved after seven hours on the basis that she could have the house together with £10,000 for immediate repairs, with all sides’ costs being paid out of the estate.

 

Third Case

This was a well-nigh intractable dispute between two brothers (and co-executors) [A and B] over the distribution of their deceased mother’s estate, which was left to them equally. They had both assisted her in what was originally their parents’ family business for 15 years after their father died, but B then left the business. By the time the dispute reached mediation (for which two days had been allowed) A, with B’s consent, had been running the business for a number of years after their mother’s death, but there was a total breakdown in trust between them, and also a lack of confidence on B’s part in the solicitor who had first obtained probate.   Suggestions from one side always encountered a stormy reaction from the other, but with the help of wise and experienced lawyers we had inched forward towards a framework for settlement by the end of Day One. At the start of Day Two, B had performed a volte face on a number of issues on which he had been unshakable on Day One, but although tensions still boiled over from time to time we were able to structure an alternative framework for settlement, which was achieved by about 4.30 on that second day. Both A and B (and their partners) were absolutely delighted that a complete settlement had been reached. Any trial would have been long, bitter and expensive and would never have achieved such a satisfactory outcome.

 

Fourth Case

This was another, much smaller, case in which a beneficiary was seeking the proper administration of her mother’s will. The problem here was that her father had treated his deceased wife’s estate as if it was his own to deal with, and somehow or other had got the jointly owned family home registered in his sole name. He accepted that this was wrong, but was desperate to avoid an order for the sale of the house.   There was a good deal of hostility underlying this family dispute, but in reality the only live issue was the identification of the size of his wife’s share, coupled with a desire not to evict the father from his home. In the end, an agreement was reached after six and a half hours which enabled the father to stay in his home for life but which provided proper protection for the beneficiaries’ interests.   Again, everyone was very pleased with the outcome.

 

Fifth Case

This was a complex family dispute over a deceased father’s estate involving three different groups of interests. He had had 13 children by three different women over a very extended period, and 11 members of the family attended the mediation (with three sets of lawyers): the interests of the other two were looked after by some of those who were present.   He had left his estate equally between his children, and the issues at the mediation were whether he had made adequate provision for the maintenance of the two young children of his own old age, and whether one of his daughters should be entitled to special treatment because of her claim that she had deprived herself of a full-time job to look after her father in his old age. The mediation was a protracted affair because both these different claims were hotly disputed and no settlement was possible until they were both resolved. In the end a complex agreement covering all disputed issues was reached, thereby obviating a very expensive and highly acrimonious trial.

 

Sixth Case

This was another dispute over the estate of a man who had married twice. He had become estranged from his two children at the time of the breakdown of their mother’s marriage, and they did not see him again until shortly before his death, when they learned that he was dying and that divorce proceedings against his second wife were far advanced. At about that time he made a new will under which his second wife would receive nothing, and the question at issue was whether he had made reasonable provision for that lady, who owned a 50% share of their matrimonial home in which she was still living.   An agreement was reached after about five hours.   Her wish to continue to live there was respected, so long as she paid all the overheads and nobody else would possess any occupation rights when the house eventually became vacant. A feature of the settlement was that his daughter was to be permitted to recover some mementos of her grandparents which were still in the house, an outcome she would never have achieved through litigation.   Everyone was very relieved when the agreement was reached.

 

Seventh case

This was a dispute between three brothers (A, B and C) about the implementation of their mother’s will. A and B were the executors, and on the eve of the mediation B told A that he wouldn’t be turning up because C would never agree to anything.   A and C agreed to carry on, and eventually, after about four hours, they reached an agreement whereby A would pay C an agreed amount even if B was not willing to contribute his fair share. There were a few very minor loose ends to tie up in order to bring the case completely to an end, but it was a good illustration of the way in which mediation can achieve the most unlikely results, with an element of good will (and an anxiety to settle) on both sides.

 

Eighth case

This was another dispute between siblings about the disposition of their mother’s estate. It took place eight years after her death. The situation as complicated by the fact that two of them were living in cottages on the estate. There were also claims that the trustees should restore to the estate a sum equivalent to the diminution in its value because of a delay in selling the mother’s property, and a dispute about the value of shares in a family company. The parties started a long way apart, and the claim was eventually compromised on the basis of what the defendants could afford to pay rather than the true value of the claim. Everyone was very satisfied and relieved by the result.

 

Ninth case

This was a dispute about the testamentary capacity of a testator. He was a 74-year old bachelor who lived by himself and who made a new will 7 months before his death in which he left his entire estate to the 18-year old son of neighbours who had befriended him in his final years. He professed the wish that the boy should enjoy the same opportunities in life that he had had. His two siblings challenged the will, and if the case had come to court there would have been expert evidence which could have gone either way. There was a great deal of bitterness at the start of the mediation, but eventually a settlement was reached after about four hours, which included the disclosure of the place where his ashes were buried and an agreement that each side could take significant items from the house before the estate was divided.

 

Tenth case

This was a claim by a wife for reasonable provision out of the estate of her deceased husband (after 55 years of marriage). He had left the sole asset of the estate to a woman who had worked for him for many years at a modest wage.  She claimed to have made a significant contribution to the value of the asset, and she needed money to bring her house up to a reasonable state of repair. The matter was settled on agreed terms which embraced the sale of the property, a division of the net proceeds and provision for the costs of the dispute.

 

The four cases which were well on their way to settlement

Eleventh case

This dispute over the implementation of a will would have resulted in settlement but for the fact that the parties had agreed to limit the mediation to four hours, which did not provide sufficient time to mitigate the effect of a great deal of family bitterness. The parties very nearly reached a settlement on the day.

 

Twelfth case

This was a dispute between an overseas charity and the surviving executors of a will under which 80% of the deceased’s residual estate had been left to the charity. The leading executor was now dead and he had been in the habit of sending money to two ladies loosely connected with the charity in circumstances when it was unclear how much money was sent and how much, if any, money had reached the charity itself. There was not much money left in the estate.  The mediation proceeded slowly, but the parties were moving towards each other, and by the end it was agreed that the executors might be allowed two weeks to see if they could raise enough money from an extended family to come close to the sum for which the charity was willing to settle. When the mediation was formally adjourned, neither side wanted to litigate further – or could afford to do so.

 

Thirteenth case

In this claim brought by a widow, the dispute centred round the value of an overseas discretionary trust which she maintained should be treated as an asset of the estate. Although the parties were very close to settlement after nine hours, a global settlement could not have been reached on the day because there were other beneficiaries who would need to be told of the executor’s intentions. Another inhibiting factor was the very late disclosure of documents which tended to show that a very large sum of inheritance tax would be payable (contrary to the parties’ earlier belief) and the precise IHT position needed to be ascertained. Both sides wished to settle, and they agreed that the negotiating process had not broken down.

 

Fourteenth case

18 people attended the first plenary session before they split up into five different groups, four of whom had legal representation. This was a dispute which followed the death of the last of four unmarried siblings who had been co-owners of a bungalow (registered as being held by them as tenants in common) in which they had all lived together for 30 years until each of them died, one by one. The main issue was whether the final survivor owned the bungalow herself (so that its value should be divided between her four residuary legatees), or whether the three siblings who predeceased her had all been entitled to a 25% share which now fell to be devolved, in two cases under an intestacy and in the other pursuant to the terms of a will. The costs were already disproportionate, and the trial date was only three weeks away. By the end of a very long day the parties had narrowed the gap very considerably, and when we ran out of time one of the two main parties was going to prepare a counter-offer in order to avoid what would be a ruinously expensive trial.

[1] Rather than returning to sit in the Court of Appeal as a retired judge for the next five years, or starting a new career as an arbitrator (because that process would be very similar to the process of judging, which I was just giving up. I did occasionally accept invitations to sit in the Judicial Committee of the Privy Council, as an exception to this general rule.

[2] Now part of Regent’s University.

3 thoughts on “Mediation and Inheritance Disputes

  1. Very interesting. With your track record as a senior judge, I can see that litigants or their solicitors would think you a very suitable person to be their mediator, particularly after you had a few successful mediations under your belt.

    I have the impression that a small percentage of those who are qualified as mediators actually get regular work as mediators. Is that your impression, and do you have any suggestions on how someone who doesn’t have senior litigation experience might make a successful career move into mediation?

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    1. Your impression is correct. This was an issue with which I was concerned all through the four years I spent as chair of the Civil Mediation Council (CMC). The training schools were producing far, far more accredited mediators than the market could possibly absorb, and there was then a reluctance by many experienced mediators to provide “observerships” which were, like pupillages and traineeships, obligatory if one could be recognised by the CMC.

      Because mediations are conducted confidentially in private, there was then no way in which the market could perceive who was good and who was bad, and I am afraid that a few busy mediators had reputations in the marketplace that were not justified by their performance. I wanted to move to a world in which someone who wished to specialise could obtain some form of quality kitemark by some means or other, but illness four years ago prevented me from pursuing this.

      The CMC needs much more funding (and more mediators to register with it) in order to pursue initiatives like this, that are badly needed. Public funding will not be available however great the public interest in ensuring that the public is served by mediators who are fit for purpose, and who are regularly re-assessed. Pro bono mediations for a local community mediation group are a good way of getting practical experience, although they will need to be satisfied that anyone who mediates for them is properly equipped to handle the disputes that come their way.

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