HC Deb 16 July 1975 vol 895 cc1681-94

10.30 a.m.

The Solicitor-General (Mr. Peter Archer)

I beg to move, That the Chairman do now report to the House that the Committee recommend that the Inheritance (Provision for Family and Dependants) Bill [Lords] ought to be read a Second time. The Bill changes certain provisions of the law relating to claims on a person's property after death. In the interests of brevity, I hope that I might, without offence, avail myself of the rule of construction that the word "his" is used to mean "his" or "hers".

Every legal system has to decide certain general questions in this area. For example, to what extent should a person be free to say while he is alive who is to receive his property when he no longer has a use for it, or to what extent should the law prescribe what is to become of it?

Basically, there are two areas of disagreement. First, how much of one's property should be allocated to provide for one's family and for those for whose welfare we have some personal predeliction, and how much should accrue to the benefit of the community generally? Happily, that is not a question that falls to the Committee to debate on this occasion. Secondly, and much more within our terms of reference, to what extent should a person be accounted the best judge of what his obligations are and how to discharge them, and to what extent should the law recognise that people may overlook their obligations or behave unfairly, through spite or prejudice, and provide against that by general rules?

In another place, Lord Simon of Glaisdale asked how far should the law actively uphold the family as an institution. Until about the seventeenth century, the law prescribed fairly rigidly, as I understand it, that if a husband died leaving a wife and children for whom he had not made provision during his life- time, his wife was entitled to one-third of his estate, the children to a further third, and it was only in respect of the remaining third, the "dead's part", that he enjoyed a freedom of disposition. I understand, although I do not claim to be an authority on the subject, that that is still the situation in Scotland.

Between the seventeenth century and the early nineteenth century, there were a number of ways in which those restrictions were whittled away until, by 1925 at the latest, there was complete freedom to benefit or to cut off whoever the deceased chose. It was often said that he might leave his property to a cat's home. I cannot believe that there can be any complaints against that as a proper object of generosity. I have often had personal reasons in my work with non-governmental organisations to be grateful that some testators feel concern outside their immediate household, but there was a feeling that there might be justifiable grounds for complaint if a person's generosity to a cats' home led to a failure to make provision for those who had, perhaps, devoted years of their life to his service, or to whom he owed an obligation greater than his general obligation to cats and other fitting objects of generosity.

It was only after 1925 that there came to be limitations on that general freedom of choice. The Inheritance (Family Provision) Act 1938 was the first. Perhaps I should mention that that was a result of a campaign by Eleanor Rathbone. In another place, Baroness Ward reminded us that in International Women's Year it is right that we should not overlook what our family law owes to the endeavours of that remarkable woman.

The Act of 1938 provided that where, by a will, a testator failed to make reasonable provision for certain close relatives who were dependent on him, the court would have power to intervene. It would not overrule the will but it was given power to make provision out of the estate, and the will took effect subject to that provision. The provision lasted only until the surviving spouse or the dependent members of the family died, remarried or ceased to be dependent. The will was then restored to its full effect, although the estate may have been depleted by reason of the provision. That applied only in a situation in which there was a will.

In 1952, those powers were extended to the situation in which the deceased made no will—where there was an intestacy. In 1958, the right to apply was extended to a former spouse who had not remarried even although there had been a divorce. In 1969, the right was given to an illegitimate child.

In due course, the subject came to be considered by the Law Commission. In 1971, the commission published a working paper on family property law, in which it considered various possible ways of dealing with the subject, including matters such as "community of property". It adopted its usual course of consulting widely, and in 1973 published its first report on family property which rejected these more sweeping solutions, upon condition, first, that there should be introduced the principle of community ownership of the matrimonial home, and, secondly, that the powers of the court to alter family provision should be extended to make them parallel at least with the court's powers on a divorce. The report on the matrimonial home and matrimonial property is still awaited.

In 1974, the second report on family property dealt with the second part of the conditions and recommended an extension of the court's powers to order provision out of the estate. This Bill seeks to give effect to the recommendations in that report.

I hope the Committee will agree that it is right that that report should be implemented, because it is yet a further example of the careful and valuable work of the Law Commission even during the present heavy legislative programme, rather than have it confined to a pigeon hole to await some less crowded period in the affairs of this House. Perhaps we should express our gratitude for the care and skill that the Law Commission has directed to this subject—as it has to all its other subjects—and agree that its labours should neither be wasted nor their effects delayed.

The Bill seeks to extend the powers of the court to intervene in four ways. First, for the surviving spouse, the provision is no longer confined to maintenance, but the court may make any financial provision which could have been made in matrimonial proceedings. That affects the amount of the provision. It means that the court is no longer limited to the concept of an amount sufficient to maintain the spouse. The possible financial provision as between surviving spouses has been greatly extended in recent years and the Bill seeks to extend provision on death in parallel.

In another place, Lord Simon of Glaisdale pointed out that family property is at present dealt with in two divisions, namely, the Chancery Division and the Family Division. There are a number of anomalies. For example, if there is a divorced wife with children, the wife goes to the Family Division but the children have to go to the Chancery Division. Therefore, the same estate is being dealt with in two divisions.

The Law Commission recommended that all this work should be brought into one division—the Family Division. My noble and learned Friend the Lord Chancellor has considered this recommendation carefully. He has consulted a number of those who are best qualified to advise, and he believes that the best solution would be to leave the matter out of the Bill. The intention is to provide for it by rules of court. However, the intention is that the rules of court will not exclude the jurisdiction of one division but continue the concurrent jurisdiction of both divisions in such a way that it will be open to an applicant to choose which is the more convenient division for a particular purpose. It is hoped in that way that the anomalies will be ended while the possible advantages of having two divisions will not be lost.

Secondly, the Bill seeks to extend the powers of the court by enlarging the class of persons who may apply. The proposal is that any child of the deceased may now apply, regardless of age or marital status, bearing in mind that the court is required to take account of their present financial position, their age and all the other relevant circumstances in deciding what is a reasonable provision. In other words, the court will be entitled to make provision for this wider class but it does not have to.

Clause 21 renders admissible certain written statements by the deceased, for example, as to his reasons for including or excluding a particular individual. The court will be entitled to make provision for any child whom the deceased has treated as one of the family even if that child is not one of the family by blood, and it may make provision for any person who is being maintained by the deceased in whole or in part at the time of his death. That includes the position of the common law wife.

The Bill has been referred to as a "mistress's charter", but I believe that that is misleading. The court will have regard to the conduct of the parties, and it is not likely that, under these provisions, it would award the whole estate to an undeserving mistress at the expense of a blameless wife. Many of us who have practised in this area have come across tragic cases of a common law wife whu has devoted years to the deceased and, perhaps, helped him to build up a business and who then finds that she is deprived of any benefit or redress because she cannot produce a marriage certificate.

Thirdly, the Bill extends the kind of provision which the court can make so that not only may it make periodical or lump sum payments but it may order the transfer or settlement of property or even the acquisition of property, for example, by buying it. Therefore, the court has more flexible powers to do what is fair and what accords with common sense.

Fourthly, the Bill provides that additional property shall be available to the court for the purpose of making this provision, for example, property which the deceased owned jointly. In particular, the court is given power to review transactions or contracts made by the deceased before his death if he parts with property in order to defeat applications under these Acts and if those transactions were made less than six years before his death. This Bill would be one further example of conferring on judges a jurisdiction enabling them to decide not only questions of fact and law but what is reasonable and proper.

Over the past few years, we have increased the area in which judges have been called upon to act as the conscience of society in matters which do not involve political decisions. We should recognise that that is not an easy task. However, there have been very few complaints about the way in which this power has been exercised. I hope that the judiciary will not feel that it is being overburdened if it is called upon to perform a further moral judgment, but we should express our gratitude for the way in which it has exercised its jurisdiction.

The Bill represents a modest measure of law reform which seeks to set right some obvious injustices to those who are not always in the best position to ride over these misfortunes.

Dr. Maurice Miller

I am always interested in legislation which enlightens a situation. The Explanatory Memorandum makes it quite clear, as does Clause 27, that the Bill does not apply to Scotland. Do the Government have any intention of making similar provisions for Scotland? I am mindful of another difference in the law between Scotland and England, the result of which every week is the baulking of an attempt to bring the law of Scotland into line with the law of England. It is ridiculous that there should be this dissimilarity. Will my hon. and learned Friend indicate that this principle will apply to Scotland as well as to England and Wales?

The Solicitor-General

I have no wish to be unhelpful, particularly to my hon. Friend, but I do not think I can answer that question for two reasons. First, I am abysmally ignorant of the law of Scotland and, secondly, because it does not fall within the ministerial responsibility of my noble and learned Friend the Lord Chancellor, but rather of my right hon. and learned Friend the Lord Advocate. I can say that there would be advantages in equating the law of England and Scotland, but they have developed differently and there are differences between them. I would be open to censure, if not the sack, if I were to embark on a prediction of what the future may hold in this respect.

Dr. Miller

Will my hon. and learned Friend draw to the notice of the Secretary of State for Scotland the necessity for bringing into line the law of Scotland and England in this and other respects which I have mentioned? Will he mention it to him in order that there should be some thought in the mind of the Secretary of State and the Government to bring forward legislation?

The Solicitor-General

I am in the happy position of being able to give an unconditional and unqualified under- taking that I will do that, and if I am not treading on anyone else's toes I will try to follow through the discussion and keep my hon. Friend informed about what happens.

As I was saying, this is a modest measure of law reform, the intention of which is to set right some of the abuses and injustices that it has not always been possible for those concerned to override.

10.47 a.m.

Mr. Daniel Awdry

I thank the Solicitor-General for explaining the Bill with his usual care and clarity. We are grateful to him and I would also like to express our gratitude for, and acknowledge the debt we owe to, the Law Commission not only for its reports and recommendations, but for drafting the Bill itself and the helpful explanatory notes which go with it.

This is an instalment of the reform of family property law, and although it is an important instalment there are still more important reforms to come. I had the honour to be a sponsor of the Divorce Reform Act in the House and a member of the Standing Committee on it. I realise that it was a controversial Bill, but it has made a major advance in removing the bitterness from the breakdown of marriage.

I have been a member of the House for about twelve years, and I can remember no law change which has had a greater impact on the people than this one, and it is a beneficial one. But it emphasised the need to amend the law on matrimonial property. As soon as we changed the law on divorce, we had to look again at the law on matrimonial property, and this was duly done. Again, we are grateful for the help we got from the Law Commission and the result of all this has been to make the legal position of divorced wives more favourable than that of the wife of a subsisting marriage.

I therefore look forward to the Law Commission's proposals on the principle of co-ownership of the matrimonial home and its contents. This would be a far-reaching change and affect millions of people. I hope that that major instalment of property law reform will not be long delayed.

This Bill, as the Solicitor-General has told us, further develops the principles set out in the Inheritance (Family Provision) Act of 1938. As the hon. and learned Gentleman says, it simply does four things. It increases the provision which can be made for spouses and, indeed, equates the provision more closely to the provision which can be ordered for a divorced spouse in matrimonial cases. Secondly, it enlarges the classes of person who may apply for maintenance from the estate. I will come back to that point in a moment because there is one further class of person I want to suggest should be included.

Thirdly, it gives the court much wider powers to make whatever orders are appropriate in any particular circumstances. Finally, it makes additional property available for applicants, for example, property which was jointly owned or property which the testator or testatrix had given away before death to defeat the claims of family provision. These are wide-ranging changes, and they are to be wholly welcomed.

As I told the Committee, I wish to return to the question of the class of person who can make a claim, and I give notice that I will be tabling an amendment in Committee to meet his point. I did not think of it myself; it was brought to my attention by the National Council for the Single Woman and her Dependants. It commented on working paper No. 42, and its name appears in Appendix 2 to the second report of the Law Commission.

The list of classes of people who can apply has been increased by adding in Clause 1(1)(e). These classes are: any person (not being a person included in the foregoing paragraphs of this subsection"— the wife or husband, the former wife or former husband who has not remarried, a child of the deceased and any person who was treated by the deceased as a child of the family— who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased;". To have these extra classes of persons is entirely right and is a humane and sympathetic extension of the law. I entirely agree with the Solicitor-General that the criticisms which have been made and the use of words in some sections of the Press to suggest that this is a mistresses' charter are misplaced.

The extension is to be welcomed, but does it go far enough? Does it cover the people who maintain or help to maintain or nurse an old person in his or her home? In these cases, it is not the survivor who can be described as the dependant, but the deceased. Under the Bill as drafted, these people will not be able to claim. These matters are better dealt with by giving the sort of example which one has in mind.

I can imagine the case of a spinster niece who goes to live with her aunt and nurses her and cares for her for many years. The niece may be fifty or fifty-five and may have a small private income. Indeed, she may have largely contributed to the household budget, so it cannot be said that it is a case of her being maintained wholly or partly by the deceased. But I feel that if, in such a case, the aunt had made a will many years before and had forgotten to change it, that will could give everything away to another relative who had done nothing to help her. I think the niece in such circumstances should be able to make a claim, but she would not be able to get herself into any of the categories of subsection (1) as drafted. The amendments which I have in mind would enlarge the classes of those who can apply by adding a subsection (f) along the following lines: any person (not being a person included in the foregoing paragraph of this subsection) who immediately before the death of the deceased had been living with and treated by the deceased as a member of the family for an uninterrupted period of not less than three years;". We can discuss in Committee whether that is the right period of time. Clearly, these are committee points which we can return to later.

I am a solicitor and deal with wills and the administration of estates in my daily life. For a long time I have felt unhappy about the existing state of this part of the law. I and many other solicitors have seen many hard cases, so the Bill will be a positive and helpful step in improving the law, and most solicitors and the Law Society welcome it.

However, I have a letter from a senior partner of a firm in London who has one grave misgiving which I ought to put forward. We can again discuss the point in committee. I will quote from the letter which he wrote one of my hon. Friends. It says: As I have said in my letter to the Law Society the objects of the Bill are well merited and this is obviously intended to cover a common law wife or illegitimate child who has been brought up as a child of the family, but I am considerably concerned about secret relationships such as a mistress or an illegitimate child unknown to the immediate family, and being maintained by the deceased without the knowledge of the immediate family. These may indeed arise in a small minority of cases, but whether or not they exist is not the point. What is more important is the fear in the mind of an independent Executor or Administrator that such persons might possibly exist without the knowledge of the family or anyone who can advise the Executor or Administrator as to the deceased's activities. Section 20 of the proposed Act gives the Personal Representative of the deceased protection only in respect of distributions to the beneficiaries that he has made after the end of six months from the date of the Grant It seems to me therefore that any independent Executor who is properly advised will not distribute the estate in a majority of the cases with which he deals and Institutional Executors if they think there is any possibility whatsoever of a claim most certainly will not. This will happen in many ordinary cases where there is no question of any secret relationship but where the personal representatives for his own protection thinks there is a possibility however faint that possibility may be. As a result the widow and lawful family will have no funds distributed to them for a period in excess of six months after the death and this is surely intolerable from their point of view. I shall be grateful if you will see that these views are made known in the proper quarter … I have now done that. My opinion is that such a proposition is not likely to arise except in rare cases, but I think we ought to look at the point.

It is a pleasure to spend a little time in this place debating a comparatively non-controversial Bill, and I hope it will soon be passed into law.

10.56 a.m.

Mr. Charles Fletcher-Cooke

The Solicitor-General was right when he said that, in our history, in only about thirteen years out of ten centuries has there been complete freedom of testamentary power, and we all accept that, for the purposes of upholding and protecting the family, as Lord Simon of Glaisdale, pointed out, it is necessary to interfere with that complete freedom.

Successive Governments since 1938 have widened the power of the courts to re-write wills, or as now, to act in the absence of a will of the testator or deceased. This Bill is a considerable widening. That can be seen from the title because the title of previous Acts have always restricted themselves to provisions for the family. The original was the Inheritance (Family Provision) Act and in the table of repeals and amendments one finds the Family Provision Act. But this Bill deals not only with the family but with dependants. As my hon. Friend the Member for Chippenham (Mr. Awdry) said, the most significant feature of the Bill is found in Clause 1(1)(e), which says: any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased. The interesting point about this wide inclusion is that there is no need for residence in or near the family, and there is no need for any open acknowledgement. The relationship may be distant and secret. This aspect should make us pause to think whether to go so far is really to uphold the family.

In the case of the niece referred to by my hon. Friend the Member for Chippenham, I agree that she is part of the family and should have something for her pains, but where there is no residence, acknowledged link or connection of any sort that might be described as a family connection, it seems to me, though I may be alone, that we are going way beyond provision for the family.

I know that the Law Commission and noble Lords in another place think this is a wise extension, but I see it as setting out on a large and hitherto uncharted ocean. It is not just a question of mistresses; there might be all sorts of people who have no obvious family link with the deceased, yet have the power to apply, with all the threat that holds to the executor, particularly to the institutional executor.

This is a very difficult practical as well as theoretical problem. We ought to consider whether there should be an amendment to Clause 1(1)(e) limiting it to those people who have some sort of I will not say open, but easily recognisable relationship equivalent to a family relationship. Otherwise the freedom of testamentary power, which has rightly been whittled away in favour of the family, is now being trenched in a way the authors of the 1938 Act, which started all this, could never have contemplated. I hope the Solicitor-General can tell us that my fears are not well-founded. It is the remoteness of the applicant that troubles me. He need have no family, quasi-family, physical or residential connection. He may come from the other ends of the earth. We will not only put executors in danger, we will extend the principle of family protection way beyond the ambit of the family.

The Chairman

I remind the Solicitor-General, that, as this is a Second Reading debate, he may speak twice only with the leave of the Committee.

The Solicitor-General

Thank you, Mrs. Jeger. I ask the leave of the Committee. I am most grateful to the hon. Member for Chippenham (Mr. Awdry) and the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) for giving notice of matters which we will obviously have to discuss at greater length in Committee. Two points raised by the hon. Member for Chippenham are obviously important, but I think the best service I can offer at the moment is not to comment on either of them, for otherwise I might almost inhibit the scope for considering them at a later stage, but I undertake they will be considered before we discuss them in Committee.

A matter of principle which might be at issue in this Bill has emerged horn the two speeches. How do we get the balance right between leaving it, as far as possible, to a person to decide who are the proper objects of concern when he is

Jeger, Mrs. Lena (Chairman) Newens, Mr.
Awdry, Mr. Daniel Rodgers, Mr. George
Bryan, Sir. P. Rooker, Mr.
Fletcher-Cooke, Mr. Solicitor-General, The
Hayman, Mrs. Stoddart, Mr.
Miller, Dr. Stradling Thomas, Mr.

leaving his earthly goods behind, and how far should that person be inhibited in the interests of the family, and, perhaps, the community generally? The hon. Member for Chippenham pointed out that, in one respect at least, we may not have gone wide enough and the hon. and learned Member for Darwen feared we may have gone too wide.

This is a matter of balance, and getting the balance right is essentially a matter for the Committee stage. I remind the hon. and learned Member for Darwen that we are at present confining the proposed extension to people who were maintained wholly or in part by the deceased at the date of his death, so it is not quite as wide as he suggested at one point. I would be less than wise if I tried to comment further at this stage. Those who have been concerned with this subject at various stages are anxious that we should get the balance as right as possible so that we will not need a succession of Bills to amend it, although of coure, we will never get the balance right to the satisfatcion of everybody.

I wish to thank you, Mrs. Jeger. With your normal combination of liberality and firmness, you have enabled us to confine the debate to a very brief period. I am most grateful to you.

Question put and agreed to.

Ordered, That the Chairman do now report to the House that the Committee recommend that the Inheritance (Provision for Family and Dependants) Bill [Lords] ought to be read a Second time.

The Committee rose at seven minutes past Eleven o'clock.