From the Professional Practice team: what efforts have to be made to establish who can claim legal rights

Q: How much searching do you need to do for legal rights claimants?

A: The Professional Practice team was recently asked for guidance on what a solicitor should do when clients (executors) tell them there is a potential legal rights claim on the estate but the executors do not want to instruct tracing agents.  

Guidance is in the rules and guidance section of the Society's website. In summary it recommends that a solicitor should withdraw if the executors refuse to sanction a search for the potential legal rights claimants.

What about a situation where a potential legal rights claimant cannot be traced? How much searching should the executors do? Is cost a factor?

In our digital world, where there are many electronic footprints, finding people online can be relatively simple. As a result tracing agents are relatively inexpensive, though that is not always true when the potential beneficiary is or might be overseas.

One option is “missing beneficiary insurance”, but anecdotally the premium could be as much as half the amount of the legal rights – too expensive to provide a practical solution.

The executor’s knowledge (and possibly the solicitor’s) as to whether a potential legal rights claimant in fact exists is also relevant. There are a number of possibilities: there might be an estranged deceased child who might or might not have their own children; alternatively, that child might definitely have children but their whereabouts are unknown.

It is appropriate for solicitors to take a reasonable approach. If the estate is not large, solicitors would be open to criticism if much of it was spent on looking for someone who may not exist. The search must also be proportionate, on the basis of what the claim might actually be worth. 

The solicitor should take reasonable and proportionate steps to establish whether a potential legal rights claimant exists. If, having done that, the solicitor is not able to confirm that such a person exists, the solicitor can continue acting. This is because they would be able to demonstrate on the file that they had taken reasonable steps to establish that, on the balance of probabilities, a claimant did not exist.

If the solicitor discovers that, on balance of probabilities, a claimant does exist but cannot be found, the solicitor should either withdraw or reserve the funds either for the duration of the prescriptive period or until the potential legal rights claimant is found.

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