Consultation - Law of Succession
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Law Society of Scotland
The Law Society of Scotland produced a very interesting paper on the Rights of Cohabitants in early March. It sought to review the operation of s28 and s29 of the Family Law (Scotland) Act 2006. Certainly in relation to s29 the timing could not have been less fortunate with the Scottish Government issuing a further consultation document in relation to succession rights only a few days later.
The Society states “We have a statutory duty to work in the public interest” as the rationale for the paper although that rather rewrites the duty to the public in relation to the solicitors’ profession contained in the 1980 Act. At any rate, expressing views on the operation of the provisions in relation to cohabitants is a worthy exercise.
In relation to s28 the right of a cohabitant to seek financial provision the Society express concerns about the 1 year time limit from the termination of cohabitation to raise proceedings. They note establishing exacting when cohabitation ended may not be entirely clearcut and they suggest that the legislation should be amended to permit the court some discretion to accept late applications outwith the one year time limit on cause shown.
They also discuss the case of Courtney’s Executors v Campbell  CSOH 136 where it was held that unjustified enrichment actions could not be brought by a former cohabitant on the basis that Parliament had created a statutory remedy in s28 which had expired. Although there were academic statements that in such circumstances unjustified enrichment could be pursued the general principle was the existence of the remedy precluded the claim. The Society state that it appears unlikely this was the intention of the Scottish Parliament. However the 2006 Act derives from the Scottish Law Commission Report on Family Law No 135 (1992) where the Commission states at para 16.22 ‘the claim is akin to a claim of unjustified enrichment.’ It thus appears clear the statutory provision was intended to replace such claims.
In relation to this provision the Society points out the potential problem which a claimant may face where claims must be made within six months of the death of the cohabitant. One is highlighted by the case of X v A, B, C, and D  SC Edin 54. The action must be brought against the executors but in that case no steps had been taken to confirm as executors and the action was brought against the next of kin who were entitled to the estate. A delay in progressing the administration of the estate could at least in theory prejudice the surviving cohabitant making a claim. The Society also point out that since the s29 right applies only on intestacy in situations where there appears to be a valid will then no claim arises but that will may subsequently be challenged on grounds of lack of capacity, facility and circumvention or undue influence thus creating an intestacy. Where that occurs, as is almost inevitable, after the expiry of 6 months no claim will arise. The same is true where a child reduces the will on the basis of the conditio si testator sine liberis decesserit.
The Society make no recommendation with regard to extension of the s29 rights to testate cases. It is perhaps disappointing that the Society did not seek to explore the question of what the purpose of any award is under s29. There are two schools of thought – (a) reward for past services or (b) compensation for future economic disadvantage. The system is discretionary and the courts have operated on a model (b) understanding but the SLC Report on Succession Report on Succession No 215 (2009) raises the prospect of a model (a) system. It seems that model (b) is the more appropriate.
Scottish Government consultation – Rights on Intestate Succession
The Scottish Government is presently consulting on other models for rights in succession. The proposals contained in the SLC Report did not find consensus when consulted upon previously. It seems quite generally accepted that where there are no children then the whole estate of one spouse should pass to the other on intestacy. In a situation where there are children of the deceased who are not children of the other surviving spouse then issues become much more opaque as to what public opinion is. It is also not clear whether the law of succession ought to reflect what people expect or whether there should be some element of morality built into the system.
The Government describe two alternative approaches. The first is the ‘ Washington State’ model. Put broadly this applies what would be a similar approach to the principles contained in the Family Law (Scotland) Act 1985 in determining matrimonial property – that is property acquired during the course of the marriage but not that gifted or inherited unless it is converted into matrimonial property by use as such. Where there are dependants, the spouse takes the deceased’s share of the net community property and one half of the net separate property. The surviving spouse will take three quarters of the net separate property if there are no dependants but there is a surviving parent, or issue of a parent, of the deceased. If there are neither dependants nor a parent or natural born or adopted siblings of the deceased, the whole estate passes to the surviving spouse.
The first issue is determining what property is of what type and then has a relatively complex set of rules for distribution. It does not seem to offer any real advantage over the current prior rights/legal rights/ intestate succession which are focussed on maintaining the surviving spouse in the family home.
The second model looked at is the British Columbia model (why these two adjacent territories? ) In British Columbia, when all children are the children of both spouses, the spouse will receive the household furnishings and a preferential amount of $300,000 of the estate's value or more. The spouse has a right to purchase the family home within a set time limit. If the children of the deceased are from a prior or different relationship, the surviving spouse's preferential amount is $150,000 with the remainder being distributed to the children. Obviously the limits have to be tweaked to reflect the Scottish position in relation to housing values and household wealth.
Is this really very different from the Scottish model?
So if you have a view you can go online and respond to these issues or alternatively in paper copy.
The Government consultation then deals with cohabitation rights. It is accepted the period to apply should be extended to 12 months. That of course will slow down the distribution of estates where there is potential for a claim from the current six month period before the expiry of which executors are not obliged to distribute. They discuss the SLC proposals for an arithmetic fixed share approach and whether a court application should be required. Clearly it would be if the current discretionary scheme is retained. One of the problems which again has not been addressed is the nature of cohabitation. While marriage is a status and either you are married or you are not cohabitation comprises a spectrum of arrangements from ones that are very similar to marriage to others where for example a divorcee and a widower get together and cohabit partly in one home and partly in another. Each has their own pension income. They meet the cohabitation test but there is no obvious need. If one sells up and moves in with the other the position changes and there is potential detriment to the party who moves in. This suggests that the current model (b) approach is preferable to the model (a) one proposed by the Commission.
The Government have not ruled out at this stage applying definitions which would treat spouses and cohabitants the same.
There are additional consultation issues.
The SLC had recommended abolition but consultees were divided. The Government now proposes limiting such claims to 6 months. But is it ever claimed in practice and if limited to six months can payment be deferred until the end of the six months as with every other debt. If so it does not appear to have any value in its retention.
The 1964 Act had a section headed equitable compensation which did not in fact deal with equitable compensation. The 2016 Act operates to vest the fee on early termination of the liferent. The Government is consulting on whether this is sufficient to deal with the issue and that accordingly there is no need for any further legislation. That seem to be correct.
Forfeiture and executors
The Government is consulting on whether the conviction for murder or culpable homicide should be a bar to appointment as executor. There may be a delay in suspicion falling on the spouse and a far longer delay in conviction. So perhaps any legislation should include provision that such a conviction would disqualify the spouse from the position of executor whether appointed or not.
Here views are sought on whether information should be redacted from Confirmation such as account numbers etc which in theory could be used to commit fraud. The counter argument is that by having public accessibility beneficiaries and family members who have no right to sight of the confirmation can obtain information to be assured as to the assets. A proposal to delay publication by 12 months is being considered.
Small estate limit
Views are sought on whether the small estate limit should be raised.
Views are sought on problems exercising the right to withdraw from such contracts arises in practice.