Legacies Roundup | April 2017


Charity Legacies

We were very pleased to welcome so many of you last month to our seminar “Encouraging legacies in a changing landscape” where we discussed, among others, some of the key issues affecting legacy professionals as we navigate the new fundraising and data protection terrain we find ourselves in. We were very grateful to hear Gerald Oppenheim (Head of Policy at the Fundraising Regulator) talk about the future of fundraising regulation and to hear from Chris Millward (CEO, Institute of Legacy Management (“ILM”)) on the ILM’s best practice guidance on legacy administration.

In this edition of Legacies Roundup we draw out some of the key issues covered by our speakers at the seminar, including how data protection issues impact legacy fundraising and legacy management, and the challenges faced by legacy professionals when dealing with vulnerable people. We also discuss the latest (and most welcome) news on the scrapping of the proposed increase in Probate Court fees and reflect on the end of the Ilott v Mitson journey.

Code of Fundraising Practice, data protection and legacies

The Code of Fundraising Practice, data protection law and the direct marketing rules are increasingly important considerations for legacy fundraisers and administrators.

Legacy fundraising materials will often engage all three. Fundraisers must have the necessary consents in place to send any fundraising material (if the supporter is being contacted by e-mail, phone or text), the fundraising materials must include an option for the supporter to opt–out of receiving further fundraising materials, and care must be taken not to give any legal advice within the materials.

Even legacy administration may have data protection implications. Charities are recommended to keep records of correspondence and telephone calls with potential donors/legatees during their lifetime, to help manage and assess funding streams and in case of any legacy disputes. Keeping records can demonstrate a connection with the donor in the event of a challenge to a will and can help to clarify the donor’s intentions. However, charities do need to be alive to data retention considerations. In short, data held must not be kept longer than is necessary, records must be kept secure and archived where possible, and the reasons why the data is kept must be justifiable and in line with the charity’s data retention policy.

In addition, charities need to be careful when contacting executors and the family members of a donor, especially if they want to encourage those family members to support the charity. Data protection law will apply to the processing of these individuals’ details, and an appropriate data protection statement should be provided to them. If the contact is for, or could be said to be for, “fundraising purposes”, the individual must be informed that they are being contacted for these purposes, and, if the contact is to be by e-mail, phone or text, the appropriate consents must be obtained.

Complying with these stringent requirements is increasingly important given the unprecedented levels of media and regulatory scrutiny of charitable fundraising over the last 18 months and the fines imposed by the Information Commissioner’s Office (“ICO”). In addition, from May next year the new legislation under the General Data Protection Regulation will introduce stricter rules on consent and the provision of fair processing information, and will increase the level of fines that the ICO can impose for breaches.

Further information on the legal implications of the recent ICO fines can be found here.

Further information on the General Data Protection Regulation can be found here.

Legacy fundraisers: dealing with vulnerable people

As many of our readers will be aware, following recent amendments to the Charities Act 2011, a new section 162A now requires all charities that are obliged to have their accounts audited to include a statement in the Annual Report of what the charity has done to protect vulnerable people and others from, broadly: (i) unreasonable intrusion; (ii) persistence; and/or (iii) undue pressure.

However, the Act does not itself contain a definition of what is meant by “vulnerable”. How, then, can charities ensure that they are meeting their statutory and best practice responsibilities?

Helpfully, the Institute of Fundraising has updated its guidance “Treating Donors Fairly: Fundraising with people in vulnerable circumstances” (available here), which intends, by providing examples of practical, every-day “indicators” and “signs” of potential vulnerabilities, to help fundraisers recognise when they might have encountered a potentially vulnerable donor, or a potential donor in a vulnerable circumstance, so that they can respond in a way which suits the potential donors’ needs.

For legacy fundraisers, recognising these signs and indicators can be vital because one of the grounds for challenging a will is on the basis that the testator was subject to “undue influence” when making it. If a challenge is successful the will would be set aside and the charity would lose out on its legacy altogether. Often in cases where a court has found that a person has been subject to undue influence, he or she may also have been exhibiting signs or indications of vulnerability at the time of making the will (for instance, old age, poor health, difficulties with following conversations etc.), so it is important that legacy fundraisers are alive to these issues.

Legacy fundraisers will also be expected to follow the Code of Fundraising Practice (Chapter 18, available here) which recognises some circumstances where fundraisers could encounter vulnerable people, such as in face to face meetings, and sets out steps that fundraisers must take in preparing for and conducting those meetings. By following the Code, fundraisers will help to minimise the risk of a challenge to a will, and to continue to protect their charity’s legacies.

In its February 2017 consultation on the Code of Fundraising Practice, the Fundraising Regulator has, among other questions, asked whether there is sufficient clarity in the Code about working with vulnerable people. This is an opportunity for legacy fundraisers and others in the legacy sector to press for further guidance on this difficult and important subject: but be sure to do so quickly – the deadline for responses is 28 April 2017.

Proposed increase in probate fees on hold

In some very welcome news, the controversial plans to change the way that probate fees in England and Wales are structured have been abandoned by the Ministry of Justice (“MoJ”). The lack of parliamentary time before the General Election this June has been cited as the reason for this decision.

The plans, which were due to be implemented next month, would have seen the current flat rate fee of £215 (£155 when the applicant is a solicitor) changed to a fee based on a sliding scale of between £300 and £20,000 depending on the value of the estate.

The proposed changes were heavily criticised by politicians, practitioners and the media alike, and the Parliamentary Joint Committee on Statutory Instruments branded the new fees ‘a tax’ and were thought to vastly exceed the amount necessary to cover the cost of the service provided by the Probate Registry. The Committee also expressed doubts as to whether the MoJ had the power to introduce the new fees in the first place.

This news has been very well received in the charity legacy sector, not least because the Institute of Legacy Management had estimated that the increased fees would have resulted in a significant decrease of approximately £18 million per year in charitable income from legacies.

There has yet been no indication whether the proposals will be reintroduced under the next government: we will be keeping a close eye on developments.

Ilott v Blue Cross and others (formerly Ilott v Mitson)

March saw the Supreme Court conclude the long-running case of Ilott v Mitson, by unanimously overturning the Court of Appeal’s six-figure award to the claimant (an adult child who was estranged from the testatrix), the effect of which had been to significantly reduce the gifts that the testatrix had left to three charities in her will. The Supreme Court reinstated the much smaller sum that had been awarded to the claimant by the District Judge at the initial court hearing almost 10 years ago.

Helpfully, the Supreme Court clarified that charities do not have to justify their position as beneficiaries, and that it is enough that a testator chooses them in their will. The ruling has not fundamentally changed the law, and it should provide comfort to charities and those wishing to include charities in their will, especially in light of the rise in the number of disputes over wills going to Court, which have increased from 11,735 in 2014 to 14,167 in 2015.

The ruling was covered quite extensively in the media, and the Third Sector and Civil Society articles on the case can be found below. BWB’s comments on the ruling can be found here.

Please click here to read the Third Sector article.

Please click here to read the Civil Society article.


This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of April 26, 2017.