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

Part of the debate – in the House of Commons at 10:07 am on 4th March 2011.

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Photo of Jonathan Djanogly Jonathan Djanogly The Parliamentary Under-Secretary of State for Justice 10:07 am, 4th March 2011

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—