Second Reading

Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill – in the House of Lords at 10:58 am on 13 May 2011.

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Moved By Lord Hunt of Wirral

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative 11:11, 13 May 2011

My Lords, I declare an interest as a partner in the international commercial law firm Beachcroft LLP and the other interests recorded in the register.

First, I pay tribute to the Law Commission. The Law Commission was, in fact, created by the Law Commissions Act 1965, which was the year that I joined my present firm. It is a body, under the sponsorship of the Ministry of Justice, whose task is to keep the law under review and to recommend reform where needed. This Bill originated with the Law Commission. Secondly, I congratulate my right honourable friend Greg Knight, Member of the other place. He became a Member in 1983-I recall his introduction well-since when he has had a long and distinguished parliamentary and ministerial career. However, my links with him go back even further than that because we were both involved, in a very belligerent way, in the political youth movements of our parties. I commend him for his decision to introduce this Bill. He has dedicated much of his parliamentary life to the interests of people-consumers, clients, customers.

This Bill results from the law of unintended consequences. I am not going to go into a long explanation of Adam Smith, where the phrase apparently originated, although he called it "the invisible hand". But let me explain. This Bill is made necessary by the interaction of the common law forfeiture rule and the intestacy rules, or the terms of a will, which combine to stop the children, the grandchildren, the great-grandchildren and further descendants inheriting their murdered relative's estate. It is easy to explain in that way because that was the way in which my right honourable friend introduced the Bill.

Why are there these problems? The concerns arise from the decision of the Court of Appeal in the case of Re DWS (deceased) in 1995. In that case, the son murdered his parents, neither of whom had a will. He was an only child, and he had only one child-a son aged two at the time of the murder who, by the way, the evidence shows, was really close to his grandparents. Because the son had murdered his parents, that grandson was prohibited by the forfeiture rule from benefiting from the estate of either his grandmother or his grandfather. The court was asked to determine the correct distribution of the estate of the grandfather under the intestacy rules. In the High Court, Mr Justice Blackburne, sitting as Vice-Chancellor of the County Palatine of Lancaster, held that the estate did not pass to the grandson, who was the only grandchild, but instead passed to the sister of the murdered person. By the time of the hearing the sister had herself died and the estate therefore passed, rather remotely, to her estate. The Court of Appeal, by a two-to-one majority, confirmed that decision.

I must share with the House a fascinating exposé of what can, from time to time, be the deficiencies of this wonderful House and the other place. I have only to refer to the speech of Lord Justice Sedley, who, at page 592 of the report, referred to,

"sections 46 and 47 of the Administration of Estates Act 1925"- which, by the way, was only a consolidating statute. But why did no one question the interaction? Mr Justice Sedley said:

"Had that useful analogue of the officious bystander, the alert backbencher, intervened in the debate to ask, the minister would have had to undertake to consider the matter and return with proposals".

Sadly, no one did. Therefore, he concluded that it was a casus omissus. Speaking as chairman of the English-Speaking Union, I do not know why on earth the judiciary have to keep referring to Latin. But I think that we can all guess what that means-it is a gap in the Act.

The Law Commission then intervened; and as a result of the then Department for Constitutional Affairs asking the Law Commission to review the relationship between the forfeiture rule and the law of succession, in October 2003 it published a consultation paper that considered the problem which had arisen in that case and discussed whether a similar problem could arise in other contexts. Its consultation paper was then widely circulated and there was quite a series of submissions. It then published a report which discussed the responses to the consultation and set out recommendations together with a draft Bill. Its solution was a deemed predeceased rule whereby a beneficiary who had forfeited or disclaimed an inheritance would be deemed for these purposes only to have died before the person who had actually died. This would permit the killer's children, grandchildren, great-grandchildren or remoter descendants to inherit. Of course this rule would be subject to any contrary intention expressed in a will, in line with the general policy of respecting testamentary wishes expressed in a valid will.

So we have the Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill. This Bill will in certain circumstances protect the inheritance rights of the descendants of people who have forfeited their inheritance by engaging in an act which kills the deceased or who have decided not to accept their own inheritance. That is where we are with this Bill.

I hope that I have been able to explain the legislation, but I see that subsequent speakers are highly expert in this area of the law. Just before I entered the Chamber I was approached by a colleague who said, "Can you explain the Bill in simple terms?". I have done my best, but I am sure that others will do it even better. I also look forward to hearing the speech of my noble friend Lord McNally, the Minister responsible for justice. I would like to say to him, to his colleagues and to the Law Commission that I pay tribute to them for initiating this reform, on which there has already been a great deal of consultation. As I have sought to explain, Consultation Paper 172, published in 2003, set out a draft Bill which was then included in the draft Civil Law Reform Bill. Now, thanks to my right honourable friend, we have this Bill which has taken out of the draft Civil Law Reform Bill the necessary provisions to deal with this injustice, in accordance with the Law Commission's aim of ensuring that the law is as fair, modern, simple and cost-effective as possible.

With some trepidation, I understand that it is normal for the mover of a Bill to take everyone through the clauses in detail. I will do my best to do just that, but as briefly as possible. The Bill is accompanied by Explanatory Notes which explain its content in much more detail than I will attempt here.

Clause 1 inserts new Section 46A into Part 4 of the Administration of Estates Act 1925, where the intestacy rules are primarily to be found. This new section will operate whenever a person disclaims an inheritance arising under an intestacy or is disqualified from inheriting on intestacy because of the forfeiture rule. For the purpose of deciding who should inherit the interest in the deceased's estate in these situations, the person disclaiming should be deemed to have died immediately before the intestate. This overcomes the requirement in the present law of intestacy that children cannot inherit if their parents are still alive, as set out in Section 47(1) of the 1925 Act.

Clause 2 makes analogous provision for disclaimers or forfeitures of gifts under wills. It inserts new Section 33A after Section 33 of the Wills Act 1837. The existing Section 33 provides that where a gift to a testator's child or other direct descendant fails because the child has predeceased the testator, the gift should pass instead to any children, grandchildren and other direct descendants of the intended recipient of the gift, and they will benefit in place of the child. New Section 33A applies where a person either disclaims a gift under a will or is precluded from taking it by the forfeiture rule. In both of these situations, under Clause 2 the will is to be interpreted as if the person disclaiming or forfeiting had died immediately before the testator. The general rule does, however, give way to a contrary intention in the will.

Clause 3 inserts new subsections (4B), (4C) and (4D) into Section 47 of the Administration of Estates Act 1925 to address the situation in which a child of an intestate dies under the age of 18 without having married or formed a civil partnership, but leaves children. At present, on the child's death, the child's children will not inherit their father or mother's estate-the intestate's estate-because their parent did not attain a vested interest in the estate by reaching the age of 18 or by marrying or entering into a civil partnership. The subsections inserted by Clause 3 provide that the intestate's estate is to be distributed as if the child had died immediately before the intestate. The children of that child who were therefore living at the death of the intestate will be able to inherit. Clause 4 sets out the short title, commencement, application and extent of the Bill.

I hope that I have been able to explain an admittedly technical Bill that, thanks to my right honourable friend, puts right an injustice. I commend the Bill to the House.

Photo of Lord Marks of Henley-on-Thames Lord Marks of Henley-on-Thames Liberal Democrat 11:25, 13 May 2011

My Lords, while I declare an interest as a practising barrister, I should add that I have never conducted a case in this precise area of the law, so while I am grateful to my noble friend for looking at me when suggesting that experts in this area of the law were due to speak, I doubt his accuracy. However, I congratulate my noble friend on bringing this Bill forward for a Second Reading and on what I must say was a masterful exposition of its terms.

As noble Lords will have appreciated, this Bill involves three distinct reforms, each of which, I would suggest, is beneficial and necessary to correct anomalies in the present law. The first reform set out in Clause 1 is that where a parent disclaims an interest in an estate, whether on intestacy, which is the alteration to the Administration of Estates Act 1925, or under a will, which is the alteration set out in Clause 2 of the Wills Act, that disclaimer does not bind his or her children. As my noble friend has explained, it achieves this by treating the disclaiming parent as having died immediately before the intestate or the testator who is, as he rightly pointed out, usually a grandparent, so that the children can inherit directly. This is a sensible and sympathetic reform. It is right that a parent can disclaim, for whatever reason, for himself or herself. However, it is wrong that that disclaimer should bind his or her children. That may cause not only loss to the children, but if they know of the disclaimer, it may also cause stress to the grandparents, who then know that their grandchildren will not inherit.

The second reform uses the same device on intestacy and under wills to ensure that the forfeiture rule does not disinherit the children of a person who forfeits his or her inheritance. There are of course clearly understandable reasons for the forfeiture rule, which is now defined by the Forfeiture Act 1982. The rule provides that someone who has killed another-often, but not always, a parent-cannot inherit from the victim's estate either on intestacy or under the victim's will. That applies to anyone party to the killing as well. The rule is obviously primarily intended to ensure that killers who kill to gain an inheritance are deprived of the fruits of their crime. However, the present operation of the rule also prevents the children of the killer from inheriting the victim's estate. Since again the most predictable circumstances in which this can operate are where a son or daughter kills a parent, the effect is to cut the victim's grandchildren out of the inheritance. That is anomalous and unfair, as the Law Commission recognised.

In DWS, the case where a son had murdered both his parents and therefore could not inherit under the forfeiture rule, which has already been cited and which was the case that led to the reference to the Law Commission, the result was that his child could not do so as well. The judgment of Lord Justice Sedley has already been read out in part, but I hope that I will be forgiven for trespassing on the time of noble Lords for a moment or two more to mention another passage of that judgment where, using very plain English, Lord Justice Sedley said:

"Most people in the situation of the two deceased parents in the present case, if told that in such an unimaginable event their son would be disqualified from inheriting and asked what they would then like to happen, would say that they would like their estate to go their grandchild".

That is the result at which this part of the Bill is aimed.

In western society, we reject the principle that the sins of the father shall be visited upon the children from generation to generation. We are right to do so, and the Bill recognises that.

The third reform is designed to protect the interests of the children of a single parent under 18 who dies before reaching majority. At present, if someone under 18 and single has a child and inherits from a parent under an intestacy while still under 18, the child cannot inherit and the parent's interest in the estate passes to other relatives. Again, that is plainly wrong. The Bill uses the same device to treat the parent as having predeceased the intestate, again usually a grandparent, so that the interest in the grandparent's estate will pass from the intestate grandparent to the single parent's child.

These are small reforms. They are, I suspect, entirely uncontroversial. They may sound complex, but they are relatively simple in their application.

The DWS case was in 2001; the Law Commission's consultation was in 2003; and that led to the Law Commission's report in 2005, a thoroughly commendable report. This Bill comes before this House in 2011. We must do better. We do not know how many possible heirs have been deprived in a grandparent's estate between 2005 and 2011, but surely it cannot be right to tolerate a delay of that length in the implementation of such an uncontroversial proposal.

The Law Commission brings great expertise to these questions. It consults widely, as it did in this case. It reports in detail and generally with very well reasoned and intellectually sound recommendations. We have it in our power to pass uncontroversial Bills introduced into the House of Lords with some speed. Yet the Law Commission's implementation log, admittedly most recently updated only in November 2010, says that the last report to be implemented was that from 2006, which led to the Coroners and Justice Act 2009. Even that delay is substantially too long. There are a number of reports since 2006 awaiting implementation. We now have an annual reporting requirement on the Law Commission. We have a protocol between the Law Commission and the Government under which procedures are governed. I simply invite the Minister to give some attention to how we may ensure that in simple and straightforward cases uncontroversial reports of the Law Commission are brought to Parliament more quickly than hitherto.

That said, commencement under the Bill is a matter for the Secretary of State. It is to be not less than three months after Royal Assent. I simply urge the Minister, once that short period, which is no doubt designed to enable lawyers to catch up with the provisions, has elapsed, to bring them into force as quickly as possible.

Photo of Lord Flight Lord Flight Conservative 11:34, 13 May 2011

My Lords, I support the Bill. I am not a lawyer, but I congratulate the noble Lords, Lord Hunt and Lord Marks, on very clear legal presentations. It came across to me as fascinating, obscure territory where quite a big issue of justice is at stake. In many ways, I am quite surprised that it has not been addressed previously. I cannot help commenting that I felt that the territory, if they had appreciated it, might have been a subject for Gilbert and Sullivan to produce a successor to "Iolanthe". I well remember:

"He shall prick that annual blister, marriage with deceased wife's sister".

This is a blister to be pricked, and I very much hope that this House will support it.

When I saw that the Bill was coming up, I thought that there was no one better than the noble Lord, Lord Hunt, to present it, although I confess that I was a little disappointed, where I imagined that it was his fertile brain that had discovered these strange anomalies, that it was the recommendation also of the Law Commission in 2005. The Bill was of course presented so fully in the other place by the Members of Parliament for East Yorkshire and Berwick-upon-Tweed. I am delighted to see my old colleague the right honourable Greg Knight here in the Chamber to listen to Second Reading in the Lords.

As the noble Lord, Lord Hunt, pointed out, the Bill is all about the law of unintended consequences and the interaction of common law and intestacy law. As the noble Lord, Lord Marks, pointed out, there are key reforms which the Bill seeks to bring about.

I was surprised to learn from reading the debate on the Bill in the other place that as many as 200 cases per annum have been affected by the law as it has stood. I can only hope that these are about people disclaiming their inheritance rather than being involved in killings. Perhaps I should say that I have no interest to declare: sadly, both my parents are dead of natural causes.

As pointed out, the issue at the bottom of the Bill is very clear: innocent children should not be unjustly disinherited; the sins of the parents should not be visited on the children. The noble Lords, Lord Hunt and Lord Marks, presented the case far better than I could, and I see little point in repeating it. Indeed, the case was very fully presented in the other place. However, some points relating to it occurred to me which I hope the noble Lord, Lord Hunt, may see as worthy of comment.

First, if this Bill were enacted, would it work legally? Are there any quirks that have not been thought about or is it as straightforward as it appears? Secondly, I hope that the number of cases of children murdering their parents remains few and that there is no trend towards an increase. Cases of mercy killing seem to be the key territory, and these are likely to rise until the laws relating to this matter are changed. Will the noble Lord, Lord Hunt, confirm that, as I understand it, the Bill would allow a mercy killer to inherit directly at the court's discretion and covers that individual as well as their children? Thirdly, I was quite interested to know what the code Napoleon provides in this territory, as there seems to be some possibility that this country might in future be invited to change its laws and adopt that code. I understood entirely the point on children with deceased minors, but I could not quite understand the applicability of civil partnerships as opposed to marriage, which did not seem to be likely to be relevant to the situation.

I congratulate the drafters of the Bill on the very simple legal device of deeming killers or disclaimers of intestate situations to have died before the intestate party, albeit that, in reality, they are still alive. Again, does this simple device actually work? Is it potentially open to challenge? I also assume that the Bill is so drafted that this issue can be applied only in this narrow circumstance of succession cases. I would be interested to know if the number of those dying intestate generally is stable, rising or falling. My observation is that in the society in which we live there is less enthusiasm and activity of people to produce wills in comparison with the past 300 years.

Finally, I wonder if there are any other quirks in succession law that need addressing. This case obviously prompts that question. I trust that we will be hearing in due course that the provisions have the support of the Government, whereas I understand that they are in effect an alternative to a rather more complicated Bill that the Government decided to withdraw for lack of time .

This is an obscure issue. There is an obvious case of justice and it is a positive thing that both Houses of Parliament of this nation have made the time to put right an injustice. That is, ultimately, what we are all here for.

Photo of Lord Scott of Foscote Lord Scott of Foscote Crossbench 11:42, 13 May 2011

My Lords, I speak in the gap-and I am grateful for the House's indulgence in allowing me to do so-to make just one short point on the Bill. It is an excellent Bill and I thoroughly support it. I agree with everything that has been said in support of it already, but I wanted to say a word about the scope of the forfeiture rule. The noble Lord, Lord Flight, mentioned that the forfeiture rule might be applied to cases of mercy killings. So it might. If the mercy killing is held to be unlawful, that would trigger it. "Unlawful killing" is the expression used in the Forfeiture Act 1982. Murders are obviously caught in that description. Manslaughter would also be caught, as there would plainly have been an unlawful killing.

However, we now have another criminal offence on the statute book: causing death by dangerous driving. Children drive their parents. Parents drive their children, obviously, but it is children driving their parents that might give rise to some point under the Forfeiture Act. The court has the discretion to grant some relief from the fact of the forfeiture, but that is a discretion, and how the court exercises a discretion will obviously depend on the view of the judge and the facts of the particular case. It must be recognised that the scope of the forfeiture rule may have been considerably increased by the advent of the crime of causing death by dangerous driving. That is the point that I wanted to make when considering the necessity for the Bill.

Photo of Lord Bach Lord Bach Shadow Spokesperson (Justice) 11:43, 13 May 2011

My Lords, I can be brief on behalf of the Opposition. We support the Bill and warmly congratulate the noble Lord, Lord Hunt of Wirral, on the calm, reasonable and above all clear way in which he moved this debate. We have come to expect that of him over the years and he did not disappoint today. We are grateful to him.

I am sorry that he has just left the vicinity, but congratulations are certainly due to the right honourable gentleman Greg Knight, the Member of Parliament in the other place. He and I were young lawyers together in Leicester in a former life. He was even foolish enough on one or two occasions to instruct me in criminal matters. We were also colleagues on opposite sides of Leicester City Council for some time many years ago. He deserves congratulations particularly today because, when the Government refused-for good reason or bad, I know not-not to proceed with the draft Civil Law Reform Bill, he took it upon himself, having been successful in the Private Member's Bill ballot in the other place to put into effect Part 3 of that draft Bill and to take it through the Commons. He deserves the thanks not only of Parliament but of the wider public.

I was privileged as a Minister to take through two Law Commission Bills-the noble Lord, Lord Hunt of Wirral, will remember them-under the new procedure that was experimented with and is now in practice. To answer the noble Lord, Lord Marks, Law Commission Bills can be brought forward by a shortened Committee method in this House and then go to the Commons. They have to be uncontroversial Bills, of course, but the procedure has worked twice so far rather well. I hope that it will be used again quite soon.

While I am on my feet, I will speak to the extraordinary high skill of the civil servants who advise the Minister-the noble Lord, Lord McNally, at the moment and me previously-on these complicated and difficult Bills. They have no doubt talked to the noble Lord, Lord Hunt, and to Mr Knight as well. They are a very high-powered group who are a great compliment to the Civil Service generally and play an important role that is sometimes understated. That needs to be said from time to time. It is a great reflection on the Civil Service that it can provide people such as them to advise Ministers. They give careful, skilful guidance on tricky matters of law. I would have been completely lost in the two Bills that I took through the House without their constant-I was going to say hand-holding-guidance. I am quite sure that it is quite different with the noble Lord, Lord McNally, who will be on top of this brief completely without any help at all.

We think that the Bill deserves support. We hope that it is carried through this House as quickly as possible. It passes, as the other speakers all said, any tests of fairness or justice with flying colours. In the end, that is surely the important point.

I have two matters for the Minister, and I do not want to put him on the spot, but why did the Government not proceed with the Civil Law Reform Bill? Secondly, the noble and learned Lord, Lord Scott of Foscote, asked how far the Forfeiture Act goes. That is a matter of some importance and needs to be sorted out, if not today then before the Bill becomes an Act. From our side, we wish the Bill well and hope that it gets its Second Reading.

Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords 11:47, 13 May 2011

My Lords, from the mild titter that went round the House when the noble Lord, Lord Bach, said that I would not need the expert advice that he had needed, we can all assume that there was a little irony in that statement. I know that there was no truth whatever in it. I share his admiration of the quality of advice that I and other Ministers receive on these matters.

I also pay tribute to Greg Knight for his success in piloting the Bill in the other place. I must admonish those colleagues who referred to the presence of Greg Knight in the Chamber today. That is quite against the code and therefore I would not dream of making that point. However, I am glad that he will have heard what has been said.

Photo of Lord Bach Lord Bach Shadow Spokesperson (Justice)

I was very careful to say that the honourable gentleman was in the vicinity of the Chamber because I was about to fall into error, I know.

Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords

Undoubtedly that is the kind of skill that made the noble Lord such a successful lawyer in Leicester, whether instructed by Mr Knight or any other solicitor.

I also pay tribute to someone who has always been my friend, but in the past year has been my noble friend Lord Hunt. It may not be commonly known that my noble friend and I were once on the executive of what I always thought was a modestly titled organisation called the Atlantic Association of Young Political Leaders. We have remained friends and close colleagues ever since.

I am very pleased to be able to respond to the debate. I am the Minister responsible for the Law Commission, so it gives me particular pleasure to confirm the Government's support for the Bill, which will implement, albeit with some modifications, the recommendations made by the Law Commission in its 2005 report, The Forfeiture Rule and the Law of Succession. The Government are very grateful to the commission both for its expert work on this subject not only in the formulation of its proposals but in the ongoing support that it has given and continues to give to the Government on the Bill, and for its wider ongoing work. The expertise of the Law Commission and the House of Lords is a productive marriage in helping us to simplify, clarify and modify our law.

Before I turn to the Bill, let me respond to the points made, particularly by my friend Lord Marks and by my noble friend Lord Hunt in his opening remarks, about the Law Commission. The work of the commission has been a major success, but the commission is facing the inevitable difficulties posed by a 33 per cent cut to its budget. There is really no room for manoeuvre, given the scale of cuts needed. The cut of 33 per cent is consistent with what is being applied to administrative budgets generally.

However, we are determined to improve on the 68 per cent implementation rate. I am confident that the new House of Lords procedure for Law Commission Bills, along with the measures included in the Law Commission Act 2009-which my noble friend Lord Marks referred to-will help in that regard. While we must be realistic about priorities at a difficult time such as this, I hope that the protocol on best practices will go some way towards ensuring that delays become a thing of the past.

The Law Commission is currently considering proposals for its 11th programme of work, which will soon be put to the Lord Chancellor for approval, as set out in the Law Commission Act 1965. This programme of work will be the first to be agreed under the terms of the protocol. I am confident that in the future delays, both in responding to the Law Commission and in implementing proposals that are accepted, will be reduced as a result. I hope that that is helpful to colleagues. I frequently say in the department that the Law Commission is highly respected in this House, which is eager to use both the great expertise that it has and the procedures that we have adopted to help in expediting Law Commission recommendations.

On the intervention of my noble friend Lord Flight, I will try to respond but I hope that my noble friend Lord Hunt will fill in any gaps. It is interesting that, although the Bill looks like a very minor piece of law, 200 cases are affected by this anomaly each year, as my noble friend Lord Flight informed us. It is very difficult to say whether I can give him guarantees that there are no other unknown quirks or consequences because, if there are unknown quirks or consequences, I do not know about them.

As always, we will continue to keep a close eye on the consequences. The point about death by dangerous driving that was raised by the noble and learned Lord, Lord Scott, is just one such issue that we will try to be alert to, as indeed is the issue of mercy killing. Those are two points where, clearly, there could be issues. I am not sure that the Code Napoléon is quite as close to being the law of our land as my noble friend Lord Flight in some of his darker moments might imagine, so I would not worry too much. As Fred Peart used to say when he was at this Dispatch Box, "Not next week".

On the question whether there are unforeseen consequences or issues of the sort that have been raised by the noble and learned Lord, Lord Scott, and by my noble friend Lord Flight, we have made a detailed study with the Law Commission. We also had a very full consultation, and we will continue to keep these matters under study.

As I said, the Government support the Bill. The law of succession in this instance governs who inherits what when a person dies. Where there is a valid will, the general policy of the law is that the deceased person's last will and testament should determine who is to inherit what from his or her estate. In other cases, where there is no valid will, the statutory intestacy rules prescribe the order of inheritance. In brief, the general policy of the intestacy rules is that a surviving spouse or civil partner has first call on the estate for his or her statutory legacy and that otherwise the property of the deceased should pass to closer blood relatives of the deceased before more distant ones. The children of the deceased, for example, should be preferred to siblings of the deceased.

The Bill does not seek to change these general principles. In fact, despite its technical complexity-I might say that I thought that I understood the Bill clearly until my noble friend Lord Hunt started explaining the technical complexities-this Bill is a very modest measure that addresses three specific problems in the law of succession and proposes clear solutions to all of them.

First, the Bill addresses the question of who should inherit when a person is disqualified from inheriting because he or she has caused the death in question. This disqualification is automatic and is effected by the rule of law known as the forfeiture rule. The operation of this rule is not affected by the Bill. As my noble friend Lord Hunt explained, the problem with the existing law was highlighted in the 2001 Court of Appeal decision. Put simply, the problem is that, where a person forfeits an inheritance on intestacy because he or she has actually killed the person from whom he or she would have inherited, his or her children will also be disinherited because the statutory trusts that apply under the intestacy rules prevent them from doing so. The forfeiture rule thereby seems to disinherit not only the criminal but the innocent grandchildren of the victim.

This problem is not confined to intestacy. For example, if a parent leaves a will giving property to his or her son and the son kills the parent, the son cannot inherit. If the parent's will also said that the son's children were to inherit if the son died first, the children would not be able to inherit in place of their father because he did not die before their grandparent. Of course, if the will said that the grandchildren could inherit in place of the son, then, irrespective of the reason why the son could not, the children would be able to inherit, but I doubt that many wills are made with the consideration that the proposed recipient might turn out to be his or her killer. Similarly, if there is a will giving a gift to a child of the testator without any further provision, the law implies a term that the gift will pass to his or her children if he or she predeceases the testator. If the testator's child forfeits his inheritance, his or her children-the testator's grandchildren-will not be able to inherit, because their parent did not die before their grandparent.

Secondly, the Bill addresses the very similar issue of what happens when the inheritance is rejected by disclaimer. Here, just as in the case of forfeiture, whether the succession is testate or intestate, anyone claiming through the person who rejected the inheritance, such as his or her children, will not be able to inherit unless the will provides to the contrary.

Finally, there is a rather unusual situation, which I think is extremely rare. It occurs where a person under the age of 18 is prospectively entitled to inherit property under the intestacy rules, perhaps from his or her parent, but dies before reaching the age of majority. If he or she dies without having married or entered a civil partnership and leaves children who were alive, or at least in the womb, at the date of the death of the original intestate, the children, who are the grandchildren of the original intestate and who are necessarily minors themselves, cannot inherit from their grandparent in place of their deceased parent. This is because under the technical rules that apply to the statutory trusts applicable on intestacy, their parent did not attain a vested interest in the property of the original intestate. This anomalous outcome, rare as it might be, discriminates against those children.

In all these three cases, the Bill will solve these problems by deeming the person who loses the inheritance, by forfeiture, by disclaimer or by dying too young, to have died before the person whose estate is being distributed. This means that if the person in question died intestate, the children of the person losing out will be able to inherit under the statutory intestacy rules and, if there is a will, that the actual or deemed wishes of the testator will prevail. This will bring the outcomes in these three situations more into line with the general policy of the law by giving priority to the wishes of the testator as expressed in a valid will or in other cases by preferring closer blood relatives over more distant ones.

Both the noble Lords, Lord Flight and Lord Bach, referred to the fact that the Bill differs in some respects from the draft Law Commission Bill published in 2005. It also differs from the equivalent provisions in the draft Civil Law Reform Bill, published by the previous Government in 2009. The main difference is that those earlier draft Bills contain specific trust provisions that are intended to ensure that in forfeiture cases the criminal was prevented from gaining any benefit from the inheritance that would, under the terms of the draft Bill, pass to his or her children. These special trust provisions attracted a good deal of criticism from witnesses to the Justice Committee in the other place and from people who replied to the consultation from the Ministry of Justice on the draft Civil Law Reform Bill. We have also discussed them in detail with the Chief Chancery Master, Jonathan Winegarten, at the Law Commission. We agree with the Justice Committee that minors who inherit following forfeiture should have their inheritance protected and that all minors should have suitable protection under the Bill. However, from our more detailed consideration of how the special trust provisions originally proposed would work, it is clear to us that they would be problematic and expensive to operate.

In our view, 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. The proposed special trust provisions would not in fact increase this protection. The Law Commission, I would add, is content with the Bill in its present form.

The issue raised by the noble and learned Lord, Lord Scott, about dangerous driving and mercy killing will need to be kept under review. The courts will have a discretion to disapply the rule of forfeiture in the case of mercy killings and will consider the individual circumstances of the case in all cases other than murder. That has been a long-standing approach. However, this underlines the benefit of a debate such as this on a measure such as this one, because in addition to enabling us to support the Bill, which I warmly do, it allows us to tease out some of the issues that need to be kept under review as we move forward. It has also given me the opportunity to lay out-I hope clearly-to the House the ongoing support of the Government for the Law Commission and its work.

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative 12:04, 13 May 2011

My Lords, I thank everyone who has contributed to this debate, which has greatly enhanced the reputation of this House as the Chamber in which we can hear from experts in their field. Certainly, my noble friend Lord Marks of Henley on Thames is widely respected outside this House for the depth and width of his expertise in this area. I thank him the points that he made today, and I was pleased that he referred to the reform as sensible and sympathetic. I welcome that tribute.

My noble friend Lord Flight raised a series of important points, which Mr Knight raised and answered in some detail in the debates in the other place. First, I assure my noble friend that in those debates a whole series of points were raised about whether this Bill might open a loophole in inheritance tax. Other points were raised as to the cost. All those points were satisfactorily answered, but the point about mercy killings is a very important one.

In 1971, Lord Justice Salmon spoke in the case of Gray and Barr about what really lies behind all this, which is that,

"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 an act-referring to murder. But there are some cases, as my right honourable friend in the other place, Mr Knight, said, where the public conscience would not want the full forfeiture provisions to apply. He specifically referred to mercy killings, but he pointed out that under the Forfeiture Act 1982, there is provision,

"for discretion to be applied by the courts in cases of manslaughter-I emphasise ... manslaughter, because there is no discretion in cases of murder".-[Hansard, Commons, 21/1/2011; col. 1128.]

That follows very much the views expressed by Lord Justice Salmon, which echo the public conscience in cases like this. It is very important that we keep this whole situation under review.

I was taken aback by the appearance of the noble and learned Lord, Lord Scott of Foscote, and the thought that he was sitting there listening to my pontificating, as I have spent most of my professional life reading his judgments. We even enacted one of his judgments word for word in Section 1 of the Compensation Act, so I pay particular attention to his learned words. We have to think of the consequences of causing death by dangerous driving. Perhaps he will permit me to reflect further on that point, because it is a very important one and covers this area that we have spent some time talking about it.

The noble Lord, Lord Bach, and I have worked together on many Law Commission Bills. It is right that we remind people all the time of what is set out at paragraph 8.44 of the Companion about the way in which we can deal with Law Commission Bills. I refer in particular to the second report of Session 2010-11 from the Procedure Committee, published on 27 July last year, which makes it clear that we are going to follow that procedure. It will do much to meet the point made by my noble friend Lord Marks of Henley on Thames. I participated in the previous Bill that went through the procedure, the Third Party (Rights Against Insurers) Act 2010. It is very important that the new procedure for scrutinising Law Commission Bills-undertaken on a trial basis-has, thanks to the noble Lord, Lord Bach, and other colleagues, come through its trial and is now to be adopted permanently.

I hope that the sort of problems instanced by my noble friend Lord Marks will now be historic. Once again, I pay tribute, as the noble Lord, Lord Bach, did, to the officials in the Law Commission and in the ministry who spend a tremendous amount of time and effort getting this legislation right. It is now an improvement on the first draft, and my noble friend Lord McNally comprehensively set out the areas in which it differs from that original Bill. It is now generally accepted that, thanks to the efforts of my right honourable friend Greg Knight, we now have a Bill that can move swiftly into legislation. I think it will work. It deals with the problem through a simple device thought up by the Law Commission.

There are other quirks that will need addressing. Several of us will go away from this debate determined to do something in that direction. However, with this Bill we can at least make an important start. That is why I have much pleasure in commending the Bill to the House.

Bill read a second time and committed to a Committee of the Whole House.