Things to consider when a legacy meets a challenge

Nicola Evans, a senior associate at Bircham Dyson Bell, casts her eye over the lessons of the recent RSPCA legacy dispute

By its nature, litigation is unpredictable. This is particularly true of legacy disputes, where the best witness - the person who gave the legacy - is absent. The recent high-profile dispute between the RSPCA and Christine Gill, who successfully contested her mother's will, has highlighted some of the problems charities can face when a legacy is challenged. Gill's mother left her entire £2m estate to the RSPCA, making no provision for her daughter because she had been "well provided for".

In October, the High Court ruled that the will was invalid because Gill's mother had been coerced into making it by her father. The case is likely to be appealed.

The decision is unusual because it remains relatively rare for a will that appears to have been properly executed to be overturned. Some of the press coverage and commentary on the case suggested there was something 'non-charitable' about a charity defending or appealing such a claim. Such attitudes could deter charities from exercising their rights properly and risk making them a 'soft touch' for unmeritorious claims.

If faced with a challenge, charities should take appropriate advice and weigh the potential benefits of a proposed course of action against the risks. These include the risk to the charity's reputation from unfavourable press coverage, and voluminous commentary on the internet. A charity faced with a sensitive case should expect a media barrage and be ready to adapt to new developments that arise as the case progresses.

Another risk is, of course, the litigation costs, which can be substantial. Trustees can approach the Charity Commission for advice (under section 29 of the Charities Act 1993) on whether a decision to defend or bring a claim, and hence incur the ensuing costs, would be within their trusts. This is particularly pertinent where the charity is unincorporated and the trustees have primary liability for the costs. The charity should also not underestimate the internal cost of time and resources spent handling the case.

Trustees should consider opportunities to mediate or settle any dispute. It is commonly assumed, often with hindsight, that this is the best option, but it will not always be appropriate. Indeed, the commission's OG11 guidance suggests it would be 'unwise' to settle in certain cases. What is important is that trustees consider the options carefully. If they consider it would be in the best interests of the charity to settle, but are unsure whether they have power to do so, they can apply to the commission for an order to authorise this.

In some cases, trustees might feel morally obliged to make a payment, even if they have no legal obligation or power to do so - for example, when the testator's clear intentions to benefit someone have been frustrated. In such cases, the trustees can apply to the commission for permission to make an ex gratia payment.

The difficulty for charities is that they will usually not know during a testator's lifetime that a will has been made in their favour, so they cannot take steps in individual cases that could strengthen their case or, preferably, prevent disputes entirely. They have to try, therefore, to get the message across by informing the public and people who advise on wills.

Testators should be encouraged to discuss their intentions with close family if they mean to make little or no provision for them. Not everyone realises how hurt close family members can feel on finding they are omitted from a will - a public document - at a time of grief. This hurt, rather than money, is often the primary motive for challenging a will.

It can also help to leave an explanatory note with the will. In the Gill case, it was never determined why the parents chose to benefit the charity; such a note might have helped to clarify matters.

 

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