Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill

Greg Knight Excerpts

Friday 21st January 2011 Commons Chamber

[Mr Greg Knight (East Yorkshire) (Con)]

I beg to move, That the Bill be now read a Second Time.

It is an unexpected privilege to be here. I have signed the book for the ballot for private Members’ Bills every year since 1983, apart from four years when, due to the electorate, I was elsewhere. It therefore came as rather a shock to find that this year my name was in the top 20.

Of course, as the House will know, the ballot is only the start of the process, and today is only a little further down the long road that one has to take to seek to change the law of the land. Indeed, the statistics are not encouraging. I understand that only 10% of private Members’ Bills succeed, so a private Member’s Bill is a very fragile vessel. As I look around and see my hon. Friend the Member for Bury North (Mr Nuttall) in his place, and as I am aware that my hon. Friend the Member for Christchurch (Mr Chope) is in the building, I even wonder whether the word “fragile” is appropriate. Perhaps “brittle” is a more appropriate word. I hope that when I have explained the purpose of the Bill, they will decide that it is something they can support.

[Joan Walley (Stoke-on-Trent North) (Lab)]

I am most grateful to the right hon. Gentleman for his positive remarks about considering the issue of private Members’ Bills. Does he agree that one of the problems of our archaic system and how we deal with private Members’ Bills is that a great deal of filibustering goes on in this place, rather than action that makes our Parliament fit for purpose?

[Mr Knight]

If I may respond to that en passant, as it were, I accept that argument. The Procedure Committee has not yet considered this, but an argument can be made that we could consider bringing in a process whereby when a private Member’s Bill has had three hours of debate the question is then put. The Procedure Committee would wish to consider that option, although I would not wish to prejudge how it might decide to form its view on that proposition. That certainly could be done and it would mean that we would have more debates, which, in my view, is a good thing.

The next duty of anyone who comes fairly high in the ballot is to decide on the subject. Hon. Members basically make a choice in one of two areas. Either they choose a subject of great controversy or perhaps startling change and to have their day in the sun on Second Reading, knowing that the Bill will be opposed by the Government and even by the official Opposition and will be talked out, or they look for something less controversial but worthy in the hope that they can get it on to the statute book. I have to be honest and say that my first choice was to introduce a daylight saving Bill, but I was usurped by my hon. Friend the Member for Castle Point (Rebecca Harris), who was higher up the ballot and who, to her great credit, has successfully piloted her Bill to Committee. I wish her well with it. Because of her decision, I decided to look around for another less controversial but worthy proposition, and I decided that I wanted to introduce a Bill that would make our law fairer in some way.

I had cause to look at some of the recent work of the Law Commission and of the Select Committee on Justice—I am delighted to see that the Chairman of that Committee, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), is in his place—and I observed some of their reflections on the forfeiture rule and the law of succession. I therefore decided on my present Bill. I accept that it is not likely to be the talking point of the week in the village pub, but it deals with three related areas where, in my view, a small change in our law is both warranted and desirable.

I must tell the House that due to the complexities of the subject, this will not be a speech full of soundbites. I shall give some background. The Bill seeks to amend the law of succession in England and Wales where a person disclaims—that is, rejects—an inheritance or is disqualified from receiving an inheritance by reason of the forfeiture rule. What is the forfeiture rule? It has long been a doctrine of the common law of this country and I think it is a good doctrine to which no reasonable person could take exception. It states that if a man or woman is criminally responsible for the death of another, neither he or she nor his or her elected representatives can be entitled to reap any financial benefit from that act. As Lord Justice Salmon said in the case of Gray v. Barr, which was reported in 1971, 2 All England Reports at page 974:

“it would in general, shock the public conscience if a man could use the courts to enforce a money claim either under a contract or a will by reason of his having committed such act”—

that is, the act of murder.

Experience has shown that there are some cases—they might be few, but they are hard cases—where the public conscience would not want the full forfeiture provisions to apply, such as those involving mercy killings, the survivor of a suicide pact initiated by the non-surviving party and perhaps a battered wife driven almost beyond the borderline of sanity by the cruelty of a violent spouse. In such cases, the criminal courts will normally have been merciful and might have not even awarded any custodial sentence in the criminal proceedings. It was to deal with these situations and cases like them that the Forfeiture Act 1982 was passed. That Act provides for discretion to be applied by the courts in cases of manslaughter—I emphasise the word manslaughter, because there is no discretion in cases of murder. In cases of manslaughter where mitigating circumstances exist, the courts can allow the forfeiture rule to be relaxed, where appropriate.

The current rule is defined in section 1 of the 1982 Act as meaning the rule of public policy, which in certain circumstances precludes a person who has unlawfully killed another or unlawfully aided, abetted, counselled or procured the death of that other from acquiring a benefit in consequence of the killing.

My Bill gives effect, with some modifications, to the recommendations set out in the Law Commission’s 2005 report, “The Forfeiture Rule and the Law of Succession”. The subject of forfeiture and succession was referred to the Law Commission following the very unsatisfactory case Re DWS (deceased) 2001. Briefly, the facts of that case were that a person, whom I will call P, killed both his parents, neither of whom left a will. The court had to decide who was entitled to inherit P’s father’s estate under the intestacy rules, which are specified in sections 46 and 47 of the Administration of Estates Act 1925. P was not allowed to inherit because of the forfeiture rule, which I have just outlined. However, P’s child, the grandchild of P’s victims, could not inherit in place of P, because under the intestacy rules P was still alive and therefore P’s child could not take an interest in the estate. In that particular case, the victim’s estate therefore passed to a sister, which was unsatisfactory because by the time the court reached its conclusion the sister herself had passed away.

The Law Commission considered that the outcome of that case was unfair, and I agree. Equally unfairly, however, a situation might arise in which a killer forfeited an inheritance under a will. I do not believe that allowing a killer’s children to inherit from the victim in those narrow circumstances would encourage anyone who would not otherwise do so to commit a murder or attempted murder. The alternative is to stay with our present law and disinherit innocent children, which is most unfair. In any event, the law offers protection to prevent a killer from benefiting from a forfeited inheritance that passes to a minor, because the court has power on application to appoint two trustees or more where a minority interest arises on intestacy. It also has the power to pass over any person with a prior interest in a grant of letters of administration and appoint someone else to run the estate.

Similar problems can also occur where a person disclaims an inheritance under a will or on intestacy. For example, where in an intestacy—to the non-lawyers among us, that means where there is no will to say what should happen to the estate—the person who disclaims is the only child of the deceased, the inheritance will bypass the child’s descendants, because grandchildren can only inherit from their grandparent if their parent dies before the grandparent, in which case the inheritance passes instead to the deceased’s other, but more distant, blood relatives.

Let me give the House an example of how that might arise. Let us say that A, the deceased, dies and leaves a fortune, money which he lawfully made from his ownership of a nightclub and casino. He does not leave a will, but dies leaving a son, B, and two grandchildren, C and D. B is a strict follower of Victorian values and is a devout Baptist Christian, unlike his father. His views are similar to those of the Southern Baptist Theological Seminary in the USA, which holds the views that God’s way is that we should earn what we get and that gambling is a sin. Because of those beliefs, B decides that he cannot in all conscience accept the legacy, so he disclaims—that is, he gives up his entitlement to money from his father’s estate. Under our law, in so doing he would prevent his own children, C and D, from inheriting, which applies even if they were to welcome the inheritance with open arms. Indeed, C and D might have embraced gambling as passionately as their own father had disowned it, but that would make no difference. Under our law, the inheritance would go elsewhere, which is neither right nor fair. That is why I am seeking to make a change with my Bill.

[Jacob Rees-Mogg (North East Somerset) (Con)]

If the strict Baptist did not want the money to go to his children, because he thought that

“the wages of sin is death”,

would he be able to take the inheritance and give it away, which would have the same effect as disclaiming, and therefore not lose his right to make that choice?

[Mr Knight]

B would be able to do that, although our law clearly states that one cannot refuse part of an inheritance—it is all or nothing. Once the decision is made, one cannot change one’s mind, unless others have not acted on one’s initial decision, in which case one can. The son would be at liberty to accept the inheritance and then give it away—indeed, he could give it to the church of which he was a member.

Stranger things happen where there is a will. If someone decides to give up something that they have been bequeathed in a will, what happens depends on the wording of the will. Such cases would need individual consideration.

[Mr Christopher Chope (Christchurch) (Con)]

I apologise to my right hon. Friend for not being here at the outset of his remarks, but I have indicated to him informally my concern that that particular aspect of his Bill may have the unintended consequence of creating a loophole, whereby people can avoid inheritance tax. In the example that he gave, the money would go directly to the grandchildren as a result of his Bill, which means that by disclaiming, B would be able to pass the money on to the next generation, whereas normally he would be able to do so only by incurring a potential inheritance tax liability, if he did not survive for seven years after so doing.

[Mr Knight]

Under our existing law, there are various reasons why people may disclaim an inheritance, and reducing one’s tax liability is already one of them. For example, someone might decide not to accept an inheritance, where it involved taking on a property that was subject to a long lease that included expensive repair covenants.

Many people in the world, as well as in this country, seek to reduce the amount that they pay in tax. Some seek to do it by concealing their wealth, lying to the authorities and completing inaccurate and misleading tax forms. They are tax evaders—they break the law, and when they are caught, they are properly punished. Others seek to lower their tax liability by making perfectly lawful decisions affecting their own position, which is called tax avoidance rather than tax evasion. There is nothing unlawful about tax avoidance, and I am surprised that my hon. Friend, who is a Conservative Member of Parliament, feels that it is somehow inappropriate.

If a person who is on their deathbed inherits a legacy, and they are worried that by accepting the money, which they will not have time to spend, they will incur a greater inheritance tax bill, I see nothing wrong with such a person disclaiming. If my Bill were law, disclaiming would mean that person’s disclaimed money going to their children, which would be all the better. That person would have reduced their tax liability in a perfectly lawful way, and what is wrong with that? I hope that on reflection my hon. Friend will decide that his point, which he might initially have thought was a good one, is not actually a good one.

[Mr Chope]

My concern in examining legislation in detail is, as my right hon. Friend knows, to make sure that there are no unintended consequences. I am grateful to him for making it clear that this is an intended consequence of his Bill.

--- Later in debate ---

[Mr Knight]

It could be a consequence, but it is not the prime reason behind the Bill.

When the Law Commission looked at the laws of succession, it highlighted the anomalous situation involving the children of a deceased minor. That is also covered by my Bill, which addresses the irregular situation in which the children of a minor who is entitled to inherit an interest in the estate of an intestate person, but who dies unmarried and without entering into a civil partnership before reaching 18, are unable to inherit their parent’s interest in that estate for no other reason than that the law says so. I think that is unfair and I will elaborate on this issue later.

First, let me comment on specific clauses in the Bill. Clause 1 would amend part 4 of the Administration of Estates Act 1925, which sets out how a deceased person’s estate is to be distributed in the absence of a will or to the extent that a will is not valid. Clause 1(2) would insert proposed new section 46A into the 1925 Act. Subsection (1) of new section 46A specifies that the new section would apply where a person, X, disclaims an inheritance or is disqualified from inheriting because of the forfeiture rule. Subsection (2) of new section 46A provides that for the purpose of deciding who should inherit X’s interest in the deceased’s estate in those circumstances, X should be deemed to have

“died immediately before the intestate.”

That overcomes the rule in current intestacy law, under section 47(1) of the 1925 Act, that children cannot inherit if their parents are still alive. That Act, which is still on our statute book after all this time, was drafted and introduced by the first Earl of Birkenhead, who I believe is the subject of one of your forthcoming lectures, Mr Speaker, which I hope to attend.

The effect of the reform is that if a person disclaims or is disqualified under the forfeiture rule, the inheritance to which he or she is no longer entitled will go to the next person listed in the order of priority in section 46 of the 1925 Act, even though the person who disclaimed or suffered the forfeiture is still alive. Subsection (3) of new section 46A provides that the new rule would not limit the court’s power under section 2 of the Forfeiture Act 1982, under which the court has powers to modify the effect of the forfeiture rule where the offender has not been convicted of murder, for example by allowing the killer to inherit all or part of the estate. The circumstances in which the court would exercise that power would be the examples I gave earlier, in the case, perhaps, of a mercy killing, in which the deceased was the instigator of the act and the loving relative was complying with their wishes. The rule introduced by new section 46A gives way to any order made by the court under section 2 of the Forfeiture Act, which would override it.

Clause 1(3) would make a consequential amendment to section 47(1) of the 1925 Act. Section 47(1) defines the statutory trusts for descendants or intestacy, providing that no grandchild or remoter descendant may inherit if his or her parent is still alive when the intestate dies. That is clearly inconsistent with proposed new section 46A, which would treat the offender as has having died before the deceased. Clause 1(3) would therefore insert “(subject to section 46A)” into section 47(1) to ensure consistency with the new rule.



Clause 1(4) makes another consequential amendment, inserting a new subsection, 4A, after section 47(4) of the 1925 Act. New subsection 4A states that subsections (2) and (4) of section 47 are subject to new section 46A.

Section 47(2) of the 1925 Act currently provides that where no descendant of the intestate attains a vested interest by reaching the age of 18, marrying or entering into a civil partnership under that age, the estate is to be distributed as if the intestate had died without issue. Section 47(4) applies a similar rule to the statutory trust for siblings or issue of siblings, defined by section 47(3). For the same reasons as apply in relation to the amendment made by clause 1(3), new subsection 4A will ensure that sections 47(2) and 47(4) are consistent with the new rule.

Clause 2 deals with disclaimer or forfeiture of a gift under a will, and makes analogous provision to that made by clause 1 in relation to intestate succession. It inserts a new section after section 33 of the Wills Act 1837 and makes one consequential amendment to that section. In both those situations, the will is to be interpreted as if the person disclaiming or the person forfeiting had died immediately before the testator, the effect of this being that the person next entitled to the property will be able to inherit. I would not want, in any proposition I put before the House, to tamper with the express provision of a will, and this Bill would not do that. The general rule I have mentioned gives way to a contrary intention shown in a will. That is consistent with section 33 of the Wills Act, which also gives way to a specific contrary intention in the testator’s will. The new rule in clause 2 would, as with clause 1, give way to any order of the court made under section 2 of the Forfeiture Act to give relief to the killer from the effect of the forfeiture rule where the court decided that was appropriate.

Clause 3 deals with the death of a single parent aged under 18, in relation to which there is an anomaly in the law of intestacy. Where a child, C, of a deceased who dies intestate is entitled to a benefit but dies under the age of 18 without having married, but leaves a child or children, the law is unfair to that grandchild or grandchildren. Currently, C’s benefit does not pass to his or her children because by dying an unmarried minor, C does not attain a vested interest in the intestate’s property under the intestacy rules and therefore has no interest to pass on to his or her children. In such cases, the inheritance passes instead to the intestate’s other, more distant, blood relatives. That clearly discriminates against the children of single parent minors. Since 1991, illegitimacy has not been not a bar to intestate inheritance, and such children qualify as grandchildren of the intestate. This problem would not arise if the child-mother was married, or if the grandchild or grandchildren were catered for in a will. The law of intestacy discriminates against illegitimate grandchildren: they are penalised because their mother is young and unmarried and because the deceased failed to make a will.

Some people—I hope none of them are in the Chamber—may feel that this bizarre rule is good news because it is a clear case of the law encouraging marriage and acting as a disincentive to young, unmarried girls becoming pregnant. I do not accept that argument, because although the present law prevents the children of unmarried teenage mothers—and fathers, come to that—from inheriting any interest that their parent may have had in the estate of the intestate person, they can inherit in other ways and can inherit other property.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

An even more telling point is that someone who has got into that situation without taking any precautions is, to put it mildly, extremely unlikely to be aware of this bizarre provision of the law.

[Mr Knight]

I accept that point absolutely and completely. The effect of the law does not produce the outcome that the intestate person in most cases would have wished anyway, and my Bill seeks to correct that anomaly.

There are a number of ways in which the state can and should seek to dissuade teenage pregnancies, but using the law of intestacy should not be one of them. I am not convinced that after a night out at a disco or bar, just before the moment of unprotected sex—perhaps in the back of a car—two young teenagers are going to feel in any way dissuaded from having sexual relations, and possibly thereby conceiving a child, by the expectation that they may die before reaching 18 or marrying, and thereby disinherit an unborn child that they might or might not be about to create. I absolutely agree with the comments made by the Chair of the Justice Committee.

We hope that most children are brought up in a loving relationship. Let us think of the poor child, who has an unmarried mother who is killed before she reaches the age of 18. What does the state say to the child? “Because of these circumstances, you will not be helped; you will not be able to inherit money that you would have inherited from your grandparents if your mother had reached the age of 18.” Clause 3, therefore, inserts new subsections (4B), (4C) and (4D) into section 47 of the 1925 Act. I remind the House that that Act lists what happens on intestacy. The subsections inserted by the clause deal with the situation of the young child of an intestate who dies under the age of 18 without having married or formed a civil partnership. As C is a minor at the date of Y’s death in the example, his or her interest in Y’s estate will be held in the statutory trusts imposed by the 1925 Act.

On commencement, clause 4(4) provides that only deaths occurring after the commencement of the Bill will be covered by it. Knowing, in this cost-conscious age in which we live, my hon. Friends’ concern about the financial implications, I draw their attention to the fact that the implementation of the Bill is not expected to impose any additional burden or to increase any other public expenditure.

[Mr Chope]

My understanding is that the Bill incorporates part of the recommendations of the Law Commission, which were going to be legislated for by the Government, but the Government decided not to legislate for those because they said it would be too expensive to do so. How is that action by the Government consistent with what my right hon. Friend says—that nothing in the Bill would add to the costs to the public purse?

[Mr Knight]

My Bill is not precisely the same as the Bill proposed by the Law Commission; I have made a number of changes to it. I stand by what I just told the House. I am sure the Minister will deal with this point in further detail if it is felt that I am incorrect, but I suspect that the reason my hon. Friend the Member for Christchurch (Mr Chope) is confused is as follows. The Law Commission suggested that special trust provision for minors in forfeiture cases be set up, and when the Ministry of Justice consulted on the special trust provision proposals, which may have played a part in the issue of cost, several criticisms were made of them. Some consultees doubted that they were necessary, and I understand that the Ministry of Justice—I stand to be corrected by the Minister—re-examined those proposals with the Law Commission, and they both then changed their mind and agreed that the proposals were unnecessary. I have not suggested otherwise because I take the view that the law already provides protection for minors’ inheritances. That may answer my hon. Friend’s point.

[Mr Chope]

My right hon. Friend is giving the Government an absolute discretion as to when his Bill would be brought into effect. Why is he doing that rather than saying that the Bill should come into effect three months after obtaining Royal Assent?

[Mr Knight]

I am doing that for the simple reason that I have confidence and trust in the coalition Government and I saw no reason to seek to override them on so footling a matter. If the Minister tells the House that he supports the Bill—which I hope he will in a moment—I expect him in good faith to see that the Bill is brought into effect as soon as is reasonably possible. Because I have confidence, particularly in this ministerial team, I decided to leave it to the Government to make that decision.

[Sir Alan Beith]

I return to the point that the Law Commission had made. Its recommendation about creating trust provisions—originally with the Public Trustee—arose from an anxiety that money should be administered without benefit, particularly indirect benefit, to a killer. Although that could have been done by private trustees rather than the Public Trustee and without public cost, its original thinking was that something along those lines was needed. Is the right hon. Gentleman confident that he was right not to include it in the Bill?

[Mr Knight]

I think so, because the court has power to determine who manages an estate, and I would have thought that that power was sufficient. If the court felt that the estate was being manipulated by an incarcerated prisoner—the father who had murdered the grandparent—I would have thought that the courts would have power to intervene and take over the management of the estate. That was why I did not include those provisions in the Bill, particularly when I noted that there had been further discussions between the Ministry of Justice and the Law Commission and that they had both reached the conclusion that the special trust provision was unnecessary. I assumed, and still do assume, that because that was where the debate ended up, we need not bother with that extra tier of bureaucracy in the Bill. However, should the Bill be given a Second Reading and should evidence to the contrary arise, I am happy to look at the matter by way of possible amendment to the Bill—although I hope and believe that will not be necessary or desirable.

On public manpower, I tell my hon. Friends that no change in the work load of any Government Department or agency is anticipated if the Bill is implemented. Usually, Ministers have to make a statement about compatibility with the European convention on human rights. I am delighted to say that this is not a Government Bill, so it does not require a statement under section 19(1) of the Human Rights Act 1998. However, if it did, my understanding of that Act is that the provisions of the Bill are compatible with the convention in any event.

The Bill extends to England and Wales, and as my hon. Friend the Member for Christchurch has said, it will come into force when the Minister so determines should it pass through all its stages in both Houses. I am sure, if he supports the Bill, that he will not stand in its way.

The Bill is merely intended to make our law fairer, by removing technicalities that run contrary to the general policy of the law of succession. It will allow direct descendants to inherit ahead of more distant relatives on intestacy. Where there is a will, the Bill will allow the people whom the deceased intended, or could be assumed to have intended, to take the inheritance if the deceased’s first intended recipient does not. More importantly, the Bill will produce an outcome that is fair, rather than one based on legal technicalities.

I am most grateful for the courteous and helpful assistance that I have received from the Minister, his departmental team, Officers and servants of the House and members of the Law Commission to whom I have spoken. I am also grateful to the Justice Committee, which has indicated its support for the measure, and for the comments made by its Chairman, my right hon. Friend the Member for Berwick-upon-Tweed, whom I am delighted to see with us today. Finally, I am most grateful to all hon. Members for giving me a fair hearing today. I hope that they will in due course give this modest but worthy Bill a Second Reading.

--- Later in debate ---

[Robert Flello (Stoke-on-Trent South) (Lab)]

I congratulate the right hon. Member for East Yorkshire (Mr Knight) on bringing the Bill to the House. I know the pressures and pitfalls associated with promoting a private Member’s Bill all too well, following my own experience with the Sustainable Livestock Bill. I hope that his hon. Friends will be somewhat pithier in their contributions when debating his Bill than they were on 12 November. I particularly noted the right hon. Gentleman’s opening remarks. Parliamentary observers—those outside the Chamber—will have seen the usual suspects in the House today and will know that we are probably in for a long sitting.

[Mr Knight]

In case the hon. Gentleman has not appreciated the fact—although, knowing him, I am sure he has—may I place it on record that when the House debated his Bill, I was one of his supporters? I hope that today he is feeling generous enough to return the compliment.

[Robert Flello]

I always like to be generous and, indeed, I thank the right hon. Gentleman for supporting my Bill on 12 November. I wish, sadly, that some of his colleagues had felt the same way.

The right hon. Gentleman did an extremely good job; he gave a valuable explanation, with examples that clarified the existing law and its application. I also congratulate the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) on his usual measured and thoughtful contribution to the debate. I concur that further consideration in Committee would be valuable to look at some of the detail. Despite 40 minutes or so of the right hon. Member for East Yorkshire introducing his Bill, some issues still need to be teased out in Committee.

If enacted, the Bill would address the concerns raised by the Law Commission in its 2005 report, “The Forfeiture Rule and the Law of Succession”. The report proposed amendments to the law as it stands, whereby grandchildren of a deceased individual are disallowed from inheriting property and suffer from what might be described as the sins of their parents being visited upon them if the parents were responsible for the murder of the deceased. The current law disinherits grandchildren of the deceased when their parent forgoes their inheritance, and it also applies when the parent is an unmarried minor on inheritance and dies without attaining majority, or marrying or entering a civil partnership.

The report’s headline recommendation was that a deemed predeceased rule be used when a child or relative has either murdered the deceased or opted to disclaim the inheritance, thereby forfeiting their entitlement to it. The child would be considered to have died shortly before the parent, and the law would then allow for the grandchild to inherit.

As the debate over the rights and wrongs of assisted suicide continues, and cases of patricide and matricide sadly continue to occur, the Bill is timely, and the Opposition believe it addresses a clear injustice. Indeed, the previous Labour Government accepted the recommendations of the Law Commission report, and in December 2009 produced the draft Civil Law Reform Bill which, among other things, incorporated those recommendations. The Bill was welcomed by the Justice Committee and it is disappointing that the current Government chose not to proceed with the measures in it.

I welcome the Bill introduced by the right hon. Member for East Yorkshire and I am pleased that he has used his favourable draw in the private Members’ ballot to bring forward legislation that reflects the combined wisdom of the Law Commission, and indeed the previous Labour Government. The Bill would take forward, with some modifications, clauses in part 3 of the Civil Law Reform Bill and despite the Government’s decision not to take forward that draft Bill, I am pleased that the Front-Bench team have—I believe—indicated that they do not oppose the Bill before us today.

The forfeiture rule is, of course, part of the wider principle that an individual should not profit from a crime they have committed. The previous Government strengthened that principle through such legislation as the Proceeds of Crime Act 2002, and the Labour party in opposition continues to support it. The forfeiture rule prevents an individual from inheriting property from someone, through a will, when they have unlawfully killed the deceased or unlawfully aided, abetted, counselled or procured the death. The rules as they stand would disallow a grandchild of the deceased from inheriting anything in such a situation—a rule the Bill seeks to amend.

The Law Commission report stated that the law as it stands is unfair for three reasons: grandchildren should not be punished for the sins of their parents; it is more likely that the deceased would have wished to benefit the grandchildren than other relatives; and the general policy of intestacy law is to prefer direct descendants to siblings and other relatives—to make an exception under the forfeiture rules is inconsistent with that policy.

The Bill introduces the deemed predeceased rule suggested by the Law Commission, whereby the child is considered to have died before the parent, and I believe it would address the Law Commission’s three criticisms. It would mean that unless stated otherwise in a will, a deceased person’s property would be distributed as though certain individuals—one who disclaims a gift, forfeits a gift, or a single parent dying under the age of 18—had died immediately before the deceased.

It is worth further mentioning the last of those three individuals—the single parent dying under the age of 18—as it is commendable that the right hon. Gentleman has used his Bill to address that anomaly. The current law states that when a parent dies leaving minor children, the “vested interest” of that child cannot be passed to their own children if they die before the age of 18. That is deeply unfair, so the Opposition welcome the inclusion of those provisions in the Bill.

As the debate over assisted suicide develops, or considerations as yet unknown become more important, future parliamentarians may find themselves debating the matter again. Unfortunately, when legislation is introduced to close a loophole or address a fairly narrow issue, it can in turn create new loopholes or additional issues. Those concerns notwithstanding, the Opposition have no objection to the Bill and we hope to see it proceed to Committee for further and more detailed scrutiny.

I again congratulate the right hon. Member for East Yorkshire on introducing the Bill. If it is pushed to a Division, I hope that a sufficient number of Members will join me in voting in favour of it.

[Mr David Nuttall (Bury North) (Con)]

I remind the House that I am a solicitor and notary public, although I no longer hold a practising certificate for either profession.

I congratulate my right hon. Friend the Member for East Yorkshire (Mr Knight) on using this opportunity to introduce his Bill in such a selfless way. Few could have anticipated that debate on a Bill with as dry a title as Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill would have resulted in references to unprotected sex in the back of a motor vehicle; that will certainly enliven those who read Hansard, I am sure.

I thank my right hon. Friend for clarifying, in response to an intervention by my hon. Friend the Member for Christchurch (Mr Chope), the difference between tax avoidance and tax evasion. All too often in recent months, Members on both sides of the House, including those on the Treasury Bench, have got those two terms muddled up, and have muddled them in the minds of the electorate. Historically, there has been a clear division in law between tax avoidance and tax evasion. If the Bill comes into use, by way of a disclaimer somebody might say, “That’s tax evasion, or avoidance,” but there is a big difference between the two terms, and I am grateful to my right hon. Friend the Member for East Yorkshire for making that clear.

Many Members, if they had come fifth in the private Members’ Bill ballot, would understandably be tempted to go down the road of popularism, and to use the opportunity to jump on whichever bandwagon happened to be passing. It says a great deal about the public-spiritedness of my right hon. Friend that rather than go down that path, he used the opportunity that he gained in the ballot to bring before the House this Bill, which, with the best will in the world, can be described only as a legal and technical measure. As I shall mention later, it has gone through what can only be described as a very long and tortuous period of gestation to be with us this morning. The Bill may be a technical measure, but it could affect many people in years to come. Many a family may well be profoundly grateful for the changes to the law of succession that the Bill seeks to introduce.

So what problem does the Bill seek to solve? Essentially, it would prevent grandchildren from being punished for the sins of their parents. In common law, it has long been the rule—often referred to as the forfeiture rule—that when someone unlawfully kills a person, they cannot benefit from the person’s estate. In short, they cannot inherit property from the deceased person whom they have murdered or otherwise unlawfully killed. Of course, even non-lawyers may be familiar with that common-law rule, as it has featured in many a murder mystery story over the years. Fans of Agatha Christie-type whodunnits may well have come across the rule as part of an interesting subplot to many a gripping yarn.

The forfeiture rule is an example of the general legal principle that a person should not be allowed to profit from his or her crime. That general common-law rule was, of course, enshrined in the Forfeiture Act 1982, which has been mentioned. I should like to clarify that the Act makes it clear that when someone is convicted of murder, the court has no discretion over whether to enforce the rule; it is only when a person is convicted of manslaughter that the court is given discretion over whether to apply the forfeiture rule in full.

As the House will be aware, a person who dies without making a will is said to have died intestate. When someone dies intestate and leaves no spouse surviving, but only a child, the law would, in the ordinary course of events, provide for that child to inherit the mother’s or father’s estate, but of course, in accordance with the rule to which I just referred, a problem arises if the son or daughter has unlawfully killed their parent.

That is more or less what happened in what is usually referred to as the leading case on the subject, which set in train the whole sequence of events that led to the Bill being brought before us this morning, and that is the case Re DWS (deceased), which was eventually quoted in the Court of Appeal in 2001. To understand the background to the Bill, I submit it is essential that the facts of that case, and the details of the judgment given, be examined, because it gives the best explanation of why the Bill is so essential.

In 1993, the son, whom I shall refer to as RS, murdered not one parent but both—Mr and Mrs S. Neither Mr nor Mrs S had made a will, and they were survived not only by their son, the murderer, but by his son—their grandson, T. T was a minor, and claimed in the court action the estates of his grandparents through his mother, who was acting, in legal terms, as his next friend, as he was of course too young to bring the action himself.

To understand the case fully, it is essential that we know what other surviving relatives there were. Mr S did not have either parent surviving him, but he did have his sister, Winifred. Sadly, by the time the case was heard, Winifred had died; she died in April 1995. The House will recall that the murder took place in 1993. Her estate was therefore represented by the persons who became the first, second and third defendants in the action. Mrs S was in a similar position; she did not have a surviving parent, but she did have a brother, Jack, and a sister, Gladys. However, although they both predeceased Mrs S, the sister, Gladys, had two children, who became the fourth and fifth defendants in the case.

The proceedings on behalf of T, the young grandson, were launched in 1995. T, through his mother, sought grants of administration covering the estates of both his grandparents, and he sought a declaration that he was entitled to those estates once he reached the age of 18. The grants of representation were made, and the only issue with which the judge—His Honour Mr Justice Blackburn, in the first instance—had to concern himself was the entitlement of T to the estates. It was accepted at the trial that the son, R, was disqualified from benefiting from his parents’ estate under the principle of public policy enunciated in a number of cases, the leading case being the 1892 case of Cleaver v. Mutual Reserve Fund Life Association.

As Mr S died intestate, the devolution of his estate fell to be determined in accordance with the provisions of sections 46 and 47 of the Administration of Estates Act 1925. Section 46(1)(ii) states:

“If the estate leaves issue but no husband or wife the residuary estate of the intestate shall be held on the statutory trusts for the issue of the intestate”.

When Mr S died, he left issue in his son, RS, and his grandson, T. With RS ruled out because of the forfeiture rule, the question was whether the grandson could inherit. I cannot put it more succinctly than the trial judge, who said:

“The plaintiff’s entitlement arises, if at all, under the statutory trusts set out in section 47(1)(i).

Under the terms of that provision, however, the plaintiff, as the son a child of the intestate, can qualify only if he is within the definition of: ‘issue living at the death of the intestate who attain the age of eighteen years or marry under that age of the intestate who predeceases the intestate’.

On its face therefore, section 47(1)(i) requires:

(a) that as issue of a child of the intestate, the plaintiff should

(i) be living at the death of the intestate”—

which of course T was—

“(ii) attain the age of 18 or marry under that age”—

although that was not yet achieved, the grandson might have gone on to do so—

“(b) that his father, RS, being a child of the intestate, should have predeceased the intestate”—

which was not the case. The judge concluded:

“Literally applied, therefore, the plaintiff cannot satisfy the conditions laid down for him to take.”

The counsel instructed to represent T, Mr Barlow, submitted that the crucial section 47(1)(i) should be construed as though RS had predeceased his father. Not surprisingly, the judge rejected that submission:

“Persuasively though the argument was put, and sympathetic though I am to the plaintiff’s plight, I cannot accept Mr Barlow’s submissions. In my view the relevant authorities do not justify such an approach. If anything they assume that as happened of course, the offender must indeed be taken to have survived his victim.”

It was then necessary to determine whether Winifred’s executors—the House will recall that Winifred was the murdered man’s sister—should inherit. The difficulty was that, if her estate was to benefit, compliance with section 46(1)(v) was required. That provision requires the intestate to have died without husband or wife, or issue or parent. However, there was issue, because both the son, RS, and the grandson, T, had survived. There were two possibilities for the court to consider.

First, as the conditions set out in subsection(1)(v) had not been satisfied, Winifred’s estate could not take, in which case, the estate of Mr S would pass to the Crown as bona vacantia. In view of the current state of the public finances, some people in the Treasury may well think that there ought to be more cases in which the Treasury stands to benefit, but that was not a matter that the court took into account. Secondly, notwithstanding the non-satisfaction of the conditions required for the operation of that subsection, the next available class could nevertheless take, where a person from an earlier class, although in existence, is disabled from taking.

Although it appears from the situation that prompted those questions that Winifred’s estate was entitled, it was not one that, according to the research undertaken by counsel, had been the subject of a decision in any previous reported case. The question had arisen—and had been considered in the context of a disclaimer, rather than in the application of the forfeiture rule—in the case Re Scott (deceased) and Widdows v. friends of the Clergy Corporation in 1975. I do not propose to go into the facts this morning; suffice it to say that the decision in that case was that if one class of potential beneficiaries had disclaimed, and there were no members in subsequent classes, that did not prevent members of a class with a lower entitlement from inheriting.

[Mr Knight]

My hon. Friend is dealing with two important cases, but does he agree that they illustrate that our intestacy provisions are defective, and that the Bill seeks to put that right? The intestacy rules are a default mechanism, designed to help people who did not make a will, by channelling their property to their nearest blood relatives. Those cases show that there is a defect in that mechanism that is enabling further, distant relatives to benefit in those narrow cases, which is something that the Bill seeks to put right.

[Mr Nuttall]

My right hon. Friend is absolutely right. Reading in even more detail the transcripts of those judgments, it was clear to me that the judges, certainly at first instance and again in the Court of Appeal, struggled with that dilemma, because they knew that in cases of intestate succession the will of Parliament was that the closest issue to the deceased should inherit, whereas the operation of this rule meant that more distant relatives were taking. In the case Re DWS, they concluded reluctantly that, with the best will in the world, they could not override the wording of the 1925 Act.

The judge decided that the case provided a common-sense if not entirely logical answer to the problem arising from RS’s disqualification from benefit. The Treasury was not represented in that case and decided that it would not even appear, so I think that the judge was looking for a way to ensure that at least someone in the family benefited, which is why he seized on the case of Scott as a way out. He stated that, if necessary—and he did not think that it was—the same result could be achieved by implying that the words “capable of taking” were added after the words “no issue’” in section 46(1)(v). The inclusion of those words was another way around the problem.

When I read the details of all the cases, it seemed rather odd that the judge was prepared in effect to add the words “capable of taking” into an Act. However, when it came to the previous rule, there was no way round it. Had he not made that decision, and found a way to get round the forfeiture rule, perhaps we would not be here today and there would be no need for the Bill. As a result of that approach, the estate of Mr S did not pass to the Crown as bona vacantia, but to Winifred’s executors.

That, of course, all led on from a murder in 1993. The case began in 1995 and reached the Chancery Division at Newcastle-upon-Tyne in March 1999. The decision was appealed on behalf of the grandson and the case went to the Court of Appeal in November 2000. Three years later, in July 2003, the Department for Constitutional Affairs asked the Law Commission to review the relationship between the forfeiture rule and the law of succession. In particular, the terms of reference specified that the review should be carried out with reference to the difficulties highlighted in the case Re DWS (deceased).

[Mr Knight]

Will my hon. Friend confirm that there was no suggestion at all in the case Re DWS that the grandchild had in any way aided and abetted the murder? He was an innocent potential beneficiary who lost out. Indeed, I believe that at the time of the murders the grandchild was only two years of age.

[Mr Nuttall]

I was not aware of the precise age of the grandchild, only that he was a young minor. I apologise: the preamble to the law report does state that RS had a two-year-old son, so it is fair to say that at that age he was entirely innocent. His mother, as I mentioned earlier, was acting on his behalf to ensure that he would not suffer as a result of the acts of his murderous father.

The Law Commission embarked on an investigation of the matter. It was asked to explore ways in which the law might be reformed to prevent the apparently unfair outcomes of the sort that occurred in that particular case. In October 2003, the Law Commission published a consultation paper entitled “The Forfeiture Rule and the Law of Succession”. It was in July 2005—another two years having passed—that the commission published its report. We can see how the years passed—it was 10 years since the start of the case and 12 years since the original murder.

In the introduction to its report, the Law Commission stated:

“It is clearly right to exclude a murderer from inheriting, but it seems unfair to exclude the murderer’s children as well. This outcome appears arbitrary: it is not based on public policy, but it is a by-product of the way the intestacy legislation is drafted.”

The Law Commission’s recommendations in its report of July 2005 were, first, that there should be a statutory rule that when a person forfeits the right to inherit from an intestate through having killed that intestate, the rules of intestate succession as laid down in sections 46 and 47 of the Administration of Estates Act 1925, as amended, should be applied as though the killer had died immediately before the intestate.

The Law Commission recommended, secondly, that when a person forfeits a benefit under an intestacy through having killed the deceased, but as a result of the reforms, property devolves on or is held for a minor descendant of the killer, the court should have the power to order that the property be held by the Public Trustee, who should administer it so as to avoid benefit to the killer. Thirdly, when a person forfeits a benefit under a will through having killed the testator, the will should be applied as though the killer had died immediately before the testator unless the will contains a provision to the contrary.

The fourth recommendation was that where a person forfeits a benefit under a will through having killed the deceased, but as a result of the reforms property devolves on or is held for a minor descendant of the killer, the court should have power to order that the property be held by the Public Trustee, who should administer it so as to avoid benefit to the killer. Fifthly, when a person disclaims an inheritance either under a will or under the law of intestacy, the inheritance should devolve as if the person disclaiming had died immediately before the deceased. The sixth and final recommendation was that when a person loses a benefit under intestacy by dying unmarried and a minor but leaves children or remoter issue, the property should devolve as if that person had died immediately before the intestate.

The following year, in 2006, the then Labour Government accepted the Law Commission’s recommendations and included the provisions to implement them in part 3 of a draft civil law reform Bill which they put out for consultation in December 2009. Seven of the eight respondents to part 3 of the consultation on the Bill supported the reforms and agreed that the new law would be fairer and simpler to operate.

--- Later in debate ---

[Mr Knight]

As far as I can ascertain, having looked at the figures, the Bill will affect about 200 cases a year.

[Mr Nuttall]

I am grateful to my right hon. Friend for that helpful information. If we extrapolate from that, disregarding the fact that the legal proceedings took six years from their launch to their conclusion, we can calculate that in the past 10 years around 2,000 cases have been affected by the delay in bringing the matter to fruition.

My right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) referred to the evidence that Professor Beale gave to the Justice Committee when it prepared its sixth report, which was part of the pre-legislative scrutiny procedure for the draft Civil Law Reform Bill. Professor Beale had indicated the difficulties in implementing the Law Commission’s recommendations. With regard to limitation periods, one problem was that the delay had been so long that new cases had come along in the meantime and changed the legal position.

The Secretary of State for Justice at the time, the right hon. Member for Blackburn (Mr Straw), had accepted that there had been delays in implementing the Law Commission’s recommendations. He said that the draft Civil Law Reform Bill had “been in process” since he had been at the Ministry of Justice. He said:

“One of the difficulties… is that this is an important measure but there have always been other… demands on the legislative programme in the past which have meant that it has been squeezed out, because it is worthy—I actually think very important in terms of what it is doing—but it has not been seen as such a high priority.”

I am sure that those affected by that in the 2,000 cases would think that it is an extremely high priority. He continued:

“That is the honest trust about it… There has also been an extensive period of consultation.”

Well, he is certainly right there. He continued:

“The original proposals, for example, in respect of damages following fatal accidents, which were in the Law Commission proposals, have themselves been refined since then. But if you are saying: ‘Does that take 11 years?’, the answer to that is no.”

There are clearly problems with the procedures. If the case highlights anything—it is perhaps something that the House should look at—it is how the recommendations of the Law Commission are put into legislation. The Minister might have something to say on that later.

The Justice Committee did much pre-legislative scrutiny on that draft Bill and produced an excellent report on it, so it is interesting that the coalition Government have now announced that they do not intend to proceed with it. Were it not for the good fortune of the decision by my right hon. Friend the Member for East Yorkshire to adopt the Bill after his name was drawn in the ballot, I wonder how long the work of the Law Commission and the subsequent legislative scrutiny of the Justice Committee would have languished in the parliamentary waiting room.

If the Bill passes into law, the position would be clarified by virtue of the inclusion of proposed new section 46A, which provides that where a person is entitled to inherit on an intestacy but has either disclaimed their right or is precluded from inheriting by the forfeiture rule, that person is to be treated as having died immediately before the intestate. Clause 2 makes a similar provision to cover cases in which a person dies having left a will and a beneficiary under that will either disclaims or is precluded from inheriting by virtue of the forfeiture rule. Clause 3 provides that in the tragic case of a single parent under the age of 18 dying intestate and leaving a child or children surviving, the estate of the intestate—

[Mr Nuttall]

My hon. Friend makes an excellent point. One of the problems is that the affairs of a person who is murdered are left hanging in mid air. If they have not made a will, their affairs might be left to the vagaries of the intestacy laws. If they have made a will and have been murdered by their son, law might provide for the estate to pass to that son anyway.

[Mr Knight]

My hon. Friend, like me, is a lawyer, so I hesitate to suggest this to him, but is not the answer to that question that any good will has a default position? If a testator gives to a son a share of the estate, which might be a 100% share, and that son then murders the testator, thus becoming prohibited from inheriting under the forfeiture rule, a good will would state that in the event that a son does not inherit, the estate should go to person A, B, C or whoever. Does my hon. Friend agree that a well-drafted will should cover that eventually? In my view, a will that does not do that and merely gives money to one person, without stating what will happen if that person cannot inherit, is an appallingly drafted will.

[Mr Nuttall]

My right hon. Friend is absolutely right, and I am sure that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) has taken that comment on board. It was exactly the point I was about to make. I would add that I am sure that professionally drawn wills would, in the vast majority of cases, make further provision for substitution. As I know from experience, many wills are made at home—home-made wills—in which case people might not be so careful or think that it is even necessary to think beyond their nearest and dearest. They simply write their will at home, with two witnesses, and leave it at that. In such circumstances, if that person had an only child and that child murdered the testator, there would of course be nothing that the testator could do about it. However, if the person dies within a year of the act, it can still be classed as murder. The person might linger and still have appropriate testamentary mental capacity to make another will and change it. I could imagine those circumstances arising, although I accept that they would do so rarely.

Clause 3 provides that in the tragic case whereby a single parent under 18 years old dies leaving a child or children surviving, the estate of the intestate is distributed as if the single parent had died immediately before the intestate. That point was covered adequately in the comments of my right hon. Friend the Member for East Yorkshire.

My right hon. Friend thinks that the issue will affect 200 estates a year, but in future many thousands of estates will benefit from the proposals in the Bill. One thing is certain: many families will be for ever grateful that this measure was brought before Parliament. I certainly wish it well, I am pleased to see that Members on both sides of the House support it, and I trust that it will have the support of the whole House.

--- Later in debate ---

[Mr Knight]

Further to that point of order, Mr Deputy Speaker. Perhaps you could reflect again on the point just made and perhaps we could have a joint statement, also including the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), who also disappeared—

[Mr Deputy Speaker]

Order. Before we get carried away, I should say that that has absolutely nothing to do with the House. Neither of the points made is a point of order.

--- Later in debate ---

[Mr Knight]

I shall be brief because I sense that the House now wants to hear from the hon. Member for Washington and Sunderland West (Mrs Hodgson).

I thank my ally, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), and I am grateful for his support and the work that his Committee has undertaken. I am also grateful to him for agreeing to be a co-sponsor of the Bill. On the point that is still exercising him a little, I understand that the court does have power to appoint two trustees to take over an estate where they are concerned about a killer benefiting and where a minority interest arises. I hope that provision is sufficient.

I thank the hon. Member for Stoke-on-Trent South (Robert Flello) for reciprocating today the support that I recently gave to him for his private Member’s Bill. My hon. Friend the Member for Bury North (Mr Nuttall) made a comprehensive and wide-ranging speech and I am grateful for his support, coming as it does from a former practising solicitor. The lesson that every member of the public should draw from the remarks of the Minister and my hon. Friend the Member for Bury North, and from all the cases associated with this area of law, is that it pays to make a well-drafted will. However, the Bill seeks to prevent injustice occurring where a well-drafted will is not in place. I thank the Minister, I am delighted to have the Government’s support and I endorse all his remarks.

I shall not detain the House any longer except to say that what I seek to do is introduce a deemed, predeceased rule which means that a person who has killed the deceased person, a person who disclaims the inheritance and a person who dies a single parent under the age of 18 are all deemed to have died immediately before the deceased. The Bill will make the law fairer by removing technicalities that run contrary to the general policy of the law of succession. This is a complex area of law; I do not expect any publicity from the media about this Second Reading debate, but that does not matter to me. What matters is that the proposal is just, modest and, above all, fair. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).