Defending an estoppel claim against a charity
When trustees are considering defending an estoppel claim against a charity they should take specialist legal advice from experienced contentious probate solicitors.
Proprietary estoppel
A charity’s legacy under a Will can be challenged when the testator has gone back on a promise that has been made to a third party.
The law governing proprietary estoppel claims is highly technical but in simple terms the claimant is required to demonstrate that:
- They were assured by the testator that they would receive a right or benefit over the testator’s property.
- They relied on the testator’s promise to their detriment.
- It would be unconscionable for the claimant to not receive a remedy.
These types of claim are particularly common when farms form part of the estate, as family members are often asked to work without payment on the basis that they will ultimately inherit.
If the estoppel claim goes to trial and the claimant is successful, then the charity’s legacy may be reduced or entirely exhausted, depending on the size of the estate and the extent of the legacy.
Proprietary estoppel claims are often pursued in parallel with an Inheritance Act claim.
Trustee’s duties
When a charity is a beneficiary under a Will that is being challenged on the basis of estoppel, the trustees should assess the individual merits of the case to ascertain what course of action is in the charity’s best interests. In particular, trustees need to balance their duties to protect a legacy, limit the charity’s exposure to legal costs, and manage its reputation.
A proprietary estoppel claim checklist
When contemplating defending a proprietary estoppel claim against a charity, trustees and their solicitors should consider the following issues:
- Whether the claimant satisfies the test for making a proprietary estoppel claim
- What evidence the claimant has to support their claim
- What the value of the estate is
- What the value of the legacy is
- What remedy the court is likely to award if the claim is successful
We would also recommend that trustees document the decision-making process, recording their reasons for defending the invalid Will challenge or, alternatively, why they decided to concede the case.
Mediation and risk reduction measures
Consideration should always be given to exploring the possibility of reaching an out of court settlement, especially where the claim is finely balanced and could go either way.
Mediation is particularly effective, and our team is highly experienced in resolving proprietary estoppel disputes in this way.
It may also be possible to limit the charity’s exposure to costs by working with other charitable beneficiaries and sharing the expense.
No Win, No Fee funding
Where there are reasonable prospects of defending an estoppel claim against a charity, our experienced team of contentious probate lawyers will be happy to consider working on a No Win, No Fee basis.
We believe we are one of only a very few specialist firms to offer No Win, No Fee funding to charities wishing to defend a proprietary estoppel claim.
No Win, No Fee funding is likely be particularly popular with trustees who are concerned about fulfilling their duty to limit the charity’s exposure to legal costs, and who wish to avoid criticism.
When defending an estoppel claim on a No Win, No Fee basis it is important for us, and for you, to be absolutely clear about what outcomes will constitute a ‘win’. We will therefore start by assessing the merits of the estoppel claim free of charge, before going on to discuss your expectations and objectives with you, and explaining how No Win, No Fee funding will operate in your particular case.
Free legal helpline
If you would like to talk to us about defending an estoppel claim, then contact us by emailing [email protected] or phoning us free on 0333 888 0439.
