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

Jonathan Djanogly Excerpts

Friday 4th March 2011 Commons Chamber

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

I, too, congratulate my right hon. Friend the Member for East Yorkshire (Mr Knight) on his success in steering his Bill to Third Reading without amendment, and clearly with considerable support from all parts of the House. I hope this success continues.

The Bill, as has been said, is a narrow but worthwhile piece of technical law reform that will make the law fairer. It overcomes the problem that, where an inheritance has been disclaimed or forfeited, people claiming through the person who disclaimed or whose inheritance was forfeited cannot inherit. The Bill allows them to do so by introducing a deemed predecease rule. It achieves a similar outcome where a person loses a benefit on intestacy by dying a single parent under the age of 18. In this case the Bill allows his or her children living, or at least conceived, at the death of the intestate to inherit the benefit that he or she, their minor parent, would have received, had he or she lived long enough.

These changes will bring the law of succession more into line with the general policy that, in the absence of a clear intention in a will, descendants should be preferred over remoter relatives. The Bill implements, with modifications, recommendations of the Law Commission. I am grateful to the commission for its work in developing the reforms and for its continuing support for the Bill.

Let me consider the Bill in a little more detail. Clause 1 applies where a person dies intestate or partially intestate. In these circumstances, after the deceased person’s debts have been paid, his or her estate or, in cases of partial intestacy, such part of it as is not distributed by the will, is passed by the personal representatives to the persons entitled to inherit under the intestacy rules. These rules, which have been amended from time to time, were introduced by the Administration of Estates Act 1925. They are intended to give effect to what it is thought the deceased person would have specified in his or her will had he or she made one. This is clearly a very general aspiration, as no one can know what the deceased person would have specified had he or she made a will, but we can be reasonably confident that closer relations are generally more likely to be left something than more distant ones and that direct descendants are likely to be preferred over collateral descendants.

Therefore, the general policy on intestacy is that, once the interest of any spouse or civil partner has been satisfied, the property of the deceased should pass to closer blood relatives before more distant ones. The children of the deceased, for example, should be preferred to siblings of the deceased. This general policy is overridden if a person is convicted of the unlawful killing of another, or of aiding, abetting or counselling another to do so. In such cases, he or she is automatically disqualified from inheriting from the victim under the forfeiture rules. This is a rule of public policy that states that a person cannot inherit property from someone whom he or she has unlawfully killed. It applies in murder and manslaughter cases. However, persons convicted of lesser offences than murder may be permitted relief to inherit the victim’s property by the court under the Forfeiture Act 1982.

Clause 1 is necessary because in 2000 the Court of Appeal decided in re DWS deceased that where a person forfeits an inheritance on intestacy because he or she has killed the person from whom he or she would have inherited, his or her children will also be disinherited. This is because the relevant intestacy rules provide that a grandchild can inherit from a grandparent only if his or her parent—the grandparent’s child—has already died. In that case, the parent had not died but had forfeited his inheritance by murdering his parents. The decision in re DWS deceased is inconsistent with the general policy underlying the law of intestacy. It is unfair that the grandchild should be disinherited in these circumstances. The same situation arises in relation to disclaimer, which is the legal term used to describe the situation where a beneficiary under a will or intestacy rejects an inheritance. The children of a person who disclaims an inheritance on intestacy cannot inherit through him or her because he or she is still alive.

Subsections (1) and (2) of clause 1 solve these problems by introducing a deemed predeceased rule into the intestacy rules. The rule is set out in new section 46A. The effect of the new section is that where a person forfeits an inheritance because he or she is convicted of murder, for example, he or she is deemed, for the purposes of the intestacy rules only, to have died before the victim. Similarly, new section 46A deems the person who disclaims an inheritance to have died before the intestate. The legal device of deeming a person to be dead, which is set out in new section 46A, enables the children of the person who has forfeited or disclaimed the inheritance to inherit their intestate grandparent’s property in accordance with the intestacy rules.

Before moving on to the remainder of clause 1, I will comment on subsections (3) and (4) of new section 46A. These make it clear that the deemed predeceased rule is not intended to prevent the offender from inheriting where the court, in the exercise of the discretion it is given by the Forfeiture Act 1982, decides that an inheritance is not to be forfeit. Section 2 of the 1982 Act, to which subsection (3) of new section 46A refers, gives the court the power 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.

[Mr Knight]

Does the Minister agree that the reason for that discretion is to cover cases, other than murder cases, where it is felt overall that justice does not require the person to be disinherited, such as mercy killing?

[Mr Djanogly]

My right hon. Friend makes a fair remark that gets us back to the core of what we are debating: introducing fairness into the process.

The rule introduced by new section 46A gives way to any order made by the court under section 2 of the 1982 Act. Subsection (4) of new section 46A defines what is meant by the forfeiture rule for the purposes of the Bill. It does so by adopting the definition of the forfeiture rule in section (1) of the 1982 Act, which provides that the forfeiture rule means the rule of public policy, which in certain circumstances precludes the person who has unlawfully killed another from acquiring a benefit in consequence of the killing. For these purposes, references to a person who has unlawfully killed another include a person who has unlawfully aided, abetted, counselled or procured the death of the other person.

Subsections (3) and (4) of clause 1 make two consequential amendments to the intestacy rules. Subsection (3) amends section 47(1) of the 1925 Act, which is quite a complicated provision defining the statutory trusts for descendants on intestacy, because section 47(1) currently provides that no grandchild or more remote descendant may inherit under the statutory trusts if his or her parent is still alive when the intestate grandparent dies. This is perfectly sensible in the generality of cases, but it would frustrate the intended operation of new section 46A, which, where it applies, treats the offender as having died before the deceased so that the offender’s children—the victim’s grandchildren—can inherit. Clause 1(3) removes this potential inconsistency by making section 47(2) of the 1925 Act subject to new section 46A.

Clause 1(4) also amends section 47 of the 1925 Act by inserting new subsection (4A), which states that subsections (2) and (4) of section 47 of the 1925 Act are subject to new section 46A. The change is necessary because subsections (2) and (4) of section 47 cover some of the same ground as new section 46A. Section 47(2) provides that where no descendant of the intestate attains a vested interest by reaching the age of 18, or marrying or entering 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 of the intestate or issue of such siblings, so that only those members of that class who achieve the age of 18, or marry or enter into a civil partnership under that age, will be included.

The new subsection (4A) of section 47 of the 1925 Act, inserted by clause 1(4) of the Bill, ensures that any duplication with section 47(2) and 47(4) is avoided. Clause 1 implements the recommendations of the Law Commission in its 2005 report on the forfeiture rules and the law of succession. The clause does not, however, contain exactly the same provisions as the equivalent clause in the draft Bill that was published with the Law Commission’s report in 2005, and indeed replicated in large part in the draft civil law reform Bill published for pre-legislative scrutiny by the previous Government in December 2009.

The difference is that those earlier draft Bills contained specific provisions intended to ensure that in forfeiture cases the killer was prevented from gaining any benefit from the inheritance that would, under the terms of the draft Bill, pass to his or her children. Those special trust provisions attracted a good deal of criticism from witnesses to the Justice Committee and from people who replied to the Ministry of Justice’s consultation on the draft civil law reform Bill, including the Bar Council and the Law Society, which represent the majority of legal practitioners likely to have to advise on that area of the law. The overall view of those two respondents was that legislation already exists to protect an infant beneficiary’s inheritance in forfeiture cases if such protection were needed.

Both organisations referred to section 116 of the Senior Courts Act 1981, which provides the court with a discretion to pass over any prior claims to a grant and to appoint someone else if, by reason of any special circumstances, it appears necessary or expedient to do so. The Bar Council also mentioned section 114(2) of the 1981 Act, which provides that, wherever a minority interest arises under a will or on intestacy, a grant should be made to a trust corporation or to two individuals, unless it appears to the court to be expedient that there should be a sole personal representative. The Bar Council concluded:

“On balance we consider the [provisions safeguarding an infant after forfeiture] to be unhelpful, and likely to lead to an increased expense in the administration of estates in circumstances which are bound to be tragic but are otherwise unpredictable.”

We considered those criticisms carefully and discussed them with the Law Commission and chief chancery master Winegarten, who would, with his fellow judges in the chancery division, have to administer the provisions. We concluded that the special trust provisions would be unnecessary, problematic and expensive to operate. The existing law, which already imposes a trust for the benefit of minor children and gives the court power to supervise the administration of estates, gives effective and adequate protection.

Both the Law Commission and chief master Winegarten were content with the omission of the special trust provisions from the Bill, and we welcome my right hon. Friend’s decision to remove them from it. Clause 1 will, as he said in his earlier intervention, make the law fairer, and we wish that part of the Bill very well.

I thought it might be helpful for hon. Members to have some idea of how clause 1 will work in practice. We are dealing with forfeiture on intestacy. In this particular situation, John has murdered his father Bob and is disqualified under the forfeiture rule from inheriting his estate. Bob did not leave a will, so his estate will be distributed under the intestacy rules. John is one of three children whom Bob had with his late wife, Janet. In this situation, John would have been entitled to a third share of Bob’s estate, but the operation of the forfeiture rule in succession prevents him from inheriting.

John has two children, Rosie and Ben. Under the current law, Rosie and Ben cannot inherit John’s share of their grandfather’s estate, because although John is disqualified from inheriting under the forfeiture rule, he is alive, and the intestacy rule provides that, for a grandchild to inherit from his or her deceased grandparent, his or her parent must have pre-deceased the intestate. Clearly, in the forfeiture situation the offender is still alive when the killing takes place.

As a consequence of the interaction of the forfeiture rule and law of intestacy, John’s interest will go back into the estate and pass to Bob’s other blood relatives or, if there is none, to the Crown, the Duchy of Lancaster or the Duke of Cornwall as bona vacantia, under the law relating to ownerless goods. Under the proposed new rule, however, John will be deemed to have died immediately before his father, enabling his children, Rosie and Ben, to inherit his share of his father’s estate. A similar outcome will be achieved when an interest on intestacy has been disclaimed or rejected.

So, if I can, Mr Speaker, I shall move on to clause 2, which amends the Wills Act 1837. The amendments make analogous provision to clause 1, which deals with intestacy in the cases where the deceased leaves a will and an inheritance is disclaimed or forfeited by the intended recipient. Clause 2 is necessary because section 33 of the 1837 Act provides that, where a child of a testator dies before the testator, leaving grandchildren who are alive at the death of the testator, the gift to the child takes effect as a gift to the grandchildren. To give effect to the testator’s wishes, which is the paramount principle of the law of wills, clause 2 inserts new section 33A into the 1837 Act. In all those cases, however, if the will indicates that the testator had different intentions, it will prevail.

Having explained in some lesser or more detail clauses 1 and 2, Mr Speaker, I think it appropriate now—

[Mr Speaker]

Order. The House is attending very closely to the development of the Minister’s thesis and is, I think, indebted to him. If, however, he were under the impression that there was an obligation upon him to treat in detail each component clause, I would want to dispel any such misapprehension. He is not obliged to do so, and if he felt inclined to move towards a conclusion to his thesis I do not think that there would be vociferous objection in the House.

[Mr Djanogly]

I am very pleased, Mr Speaker, to hear that the House would have no objections to my moving on. In some ways, you have pre-empted my thoughts on the matter, and to that extent I am delighted to wind up my speech. Just to say, finally, that from the Government’s point of view we wish the Bill very well on its further progress.

Question put and agreed to.

Bill accordingly read the Third time and passed.