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Hoping some of the legal experts on here but be able to provide a little guidance on a civil matter that we're trying to work out the next steps for.
Bit of backstory.
My FIL died four years ago without a Will and with limited personal assets leaving his wife quote exposed financially. He did own a business (not sure if ltd company or not but they were authorised representatives under a network backer which he had operated for many years alongside a trusted partner and family friend, a business that continues to operate partly under his name to this day. They both had their own client banks but operated the business together.
When he died it came to light a a life assurance policy had been established by him and his business partner to pay out in the event of one of their deaths. This was taken out many years ago and the terms of the policy and trust are not clear whether this life assurance was to protect the business and provide cashflow in this event, or to pay out the deceased's family for their share of the business.
In any event, the remaining business partner met with the family some months after FILs death to discuss what he thought should happen with this and to propose what should happen with any trail income streams that could be attributed to FIL, as well as any potential liabilities that the business could have to meet as a result of complaints or clawed back revenue due to cancelled business etc. The business would continue to trade and the remaining partner would be inheriting the bank of clients for ongoing work and future transactions.
The business partner proposed the following:
They would claim the life assurance as they were a trustee and were entitled to do so (This actually had to be signed for by a couple of ex business partners too on the basis that it would be distributed to the family). He would immediately hand over two thirds of this (because there ad been 3 other business partners at the time or writing the policy) and retain his share to prop up any business issues coming off the back of FIL's death.
He would hold these funds in the business as there was a significant amount of commission that could be clawed back for business written by the FIL. He wanted to ensure the business was protected and could meet any of these clawbacks if they occurred (there had been a £5k PI payment from an ongoing complaint that settled after FILs death) so this seemed reasonable .He then changed his mind on this as the potential liabilities were higher than first anticipated, and proposed that all funds were retained and distributed on a gradual basis.
He agreed that the funds would be gradually distributed to the family as the potential liabilities dropped off (less any costs incurred from this) and that after four years the whole amount would be paid over (less any clawbacks).
He also proposed small goodwill payments to the family for existing client's of FIL that signed up for repeat business soon after his death and an agreement for ongoing trail commission that would be distributed accordingly.
This was all agreed in a meeting at his home and was documented over several lengthy detailed email exchanges between me and him, as well has him and MIL and wife.
Fast forward four years and you all know where this is going. No life assurance monies have been distributed, the goodwill payments to the kids never materialised, and no trail commission made it's way back to the family. MIL had to sell the house and has had a significant amount of stress and depression over that time period. We have chased the business partner periodically and have generally been met by radio silence.
There has been an attitude that he should be given the benefit of the doubt to some extent as he was also left exposed by FIL's death, and FIL should have had better protection in place for his family. However, what was agreed was agreed, and the business partner has breached all of the terms that he laid out and that the family agreed to. This is all documented in emails. He is still trading and his industry is one of the few that has actually done well through the pandemic (mortgage broking).
What we need to work out now is if we have a case that is worth talking to a legal professional about, what type of solicitor we should engage with and if it would be worth any costs as resources are tight. There is some apathy around this subject but it also seems an insult to FIL's memory by not fighting this a little more.
Any thoughts or advice is gratefully received.
Bit of backstory.
My FIL died four years ago without a Will and with limited personal assets leaving his wife quote exposed financially. He did own a business (not sure if ltd company or not but they were authorised representatives under a network backer which he had operated for many years alongside a trusted partner and family friend, a business that continues to operate partly under his name to this day. They both had their own client banks but operated the business together.
When he died it came to light a a life assurance policy had been established by him and his business partner to pay out in the event of one of their deaths. This was taken out many years ago and the terms of the policy and trust are not clear whether this life assurance was to protect the business and provide cashflow in this event, or to pay out the deceased's family for their share of the business.
In any event, the remaining business partner met with the family some months after FILs death to discuss what he thought should happen with this and to propose what should happen with any trail income streams that could be attributed to FIL, as well as any potential liabilities that the business could have to meet as a result of complaints or clawed back revenue due to cancelled business etc. The business would continue to trade and the remaining partner would be inheriting the bank of clients for ongoing work and future transactions.
The business partner proposed the following:
They would claim the life assurance as they were a trustee and were entitled to do so (This actually had to be signed for by a couple of ex business partners too on the basis that it would be distributed to the family). He would immediately hand over two thirds of this (because there ad been 3 other business partners at the time or writing the policy) and retain his share to prop up any business issues coming off the back of FIL's death.
He would hold these funds in the business as there was a significant amount of commission that could be clawed back for business written by the FIL. He wanted to ensure the business was protected and could meet any of these clawbacks if they occurred (there had been a £5k PI payment from an ongoing complaint that settled after FILs death) so this seemed reasonable .He then changed his mind on this as the potential liabilities were higher than first anticipated, and proposed that all funds were retained and distributed on a gradual basis.
He agreed that the funds would be gradually distributed to the family as the potential liabilities dropped off (less any costs incurred from this) and that after four years the whole amount would be paid over (less any clawbacks).
He also proposed small goodwill payments to the family for existing client's of FIL that signed up for repeat business soon after his death and an agreement for ongoing trail commission that would be distributed accordingly.
This was all agreed in a meeting at his home and was documented over several lengthy detailed email exchanges between me and him, as well has him and MIL and wife.
Fast forward four years and you all know where this is going. No life assurance monies have been distributed, the goodwill payments to the kids never materialised, and no trail commission made it's way back to the family. MIL had to sell the house and has had a significant amount of stress and depression over that time period. We have chased the business partner periodically and have generally been met by radio silence.
There has been an attitude that he should be given the benefit of the doubt to some extent as he was also left exposed by FIL's death, and FIL should have had better protection in place for his family. However, what was agreed was agreed, and the business partner has breached all of the terms that he laid out and that the family agreed to. This is all documented in emails. He is still trading and his industry is one of the few that has actually done well through the pandemic (mortgage broking).
What we need to work out now is if we have a case that is worth talking to a legal professional about, what type of solicitor we should engage with and if it would be worth any costs as resources are tight. There is some apathy around this subject but it also seems an insult to FIL's memory by not fighting this a little more.
Any thoughts or advice is gratefully received.
