Refuse to mediate at your peril!

The case of Rochford v Rochford [2020] (unreported) was a successful claim by an adult child for financial provision from her late father’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act) which had unpleasant consequences for the beneficiary who enthusiastically defended the claim.

Ms Rochford was the only child of Mr Kenneth Rochford. The relationship was not always harmonious and Mr Rochford changed his Will so that his daughter was left with a legacy of only £25,000, with the bulk of his estate going to his sister. Following her father’s death, Ms Rochford brought a claim under the 1975 Act. She owned her own property but claimed she would have a drop in income for seven years when her income protection insurance ended and before she became entitled to receive a state pension.

The sister appears to have decided to strenuously defended claim. The daughter proposed mediation at an early state but the sister refused on various grounds, including that the claim was hopeless and that the daughter had provided insufficient financial disclosure. The matter did not settle and proceeded to trial in January 2021.

The daughter was awarded £85,000 in addition to the £25,000 legacy under the Will. In addition, because the daughter had beaten her offer made under Part 36 of the Civil Procedure Rules in August 2019 the judge made a very favourable costs order in her favour namely:

• costs on the indemnity basis from September 2019;
• an additional 10% on top for beating the offer;
• interest at 5% on the costs; and
• an interim payment of £60,000 towards the costs to be be assessed, if not agreed.

The judge was not impressed by the sister’s arguments for not mediating. He stated that parties in these types of matters should consider mediation at an early stage, especially where the estate was of a low value (£193,000). In cases where the parties involved are not of substantial means and there are no complex trusts or offshore accounts it was necessary to take a view on the amount of disclosure required.

Our thoughts on the case

The consequences of refusing to mediate can be severe and it is important to consider a response to an invitation to mediate very carefully. There are not many situations in which a refusal to mediate will be considered reasonable.