The 'Fairness Campaign' - one year on

16 December 2010

David de Menezes, Head of Communications, Title Research

Title Research celebrated its 45th birthday this year and whilst the company has seen many changes over this period of time, we continue to be rooted to the fair-minded values that have served our clients so well for so long. Over the last 12-24 months our ‘Fairness Campaign’ to end excessive percentage fees charged by ‘heir hunters’, has been the most prominent reflection of these fair-minded values.

Many years ago it became clear to us that percentage fees had become outdated and completely unnecessary in probate research. Over recent months, we have campaigned vigorously on this issue because we felt the public needed protection from percentage fees that are out of all proportion to the amount of time spent on research. We know the fees are disproportionate, as we carry out exactly the same research at a fraction of the cost by charging time based fees. By way of example, we recently came across a case where an heir hunter wanted to charge just over £100,000 to locate five beneficiaries, when the equivalent time based fee would have cost the estate £8,000.

Over the last year, this issue has generated a huge amount of public interest as we have seen from widespread media coverage of cases where beneficiaries have been overcharged, including articles in The Times, the Independent and the Daily Mail, as well as broadcasts on Radio 4. The legal press have also taken a keen interest in this issue, with feature articles in the STEP Journal and Law Society Gazette. You can view the media coverage by clicking here.

There have been a number of developments over this period which have marked a shift in attitude amongst beneficiaries and the legal profession, with an increasing reluctance amongst both groups to sign-up to heir hunter percentage fees, also known as ‘contingency fees’. This is hardly surprising in the current economic climate, as consumers and probate practitioners are far more focused on value for money and getting a fair deal for themselves and their clients.

Earlier in the year, the BBC1 Heir Hunters programme came under fire in the Mirror newspaper. The Mirror criticised the level of fees charged by heir hunters in the programme and a number of MPs called for the programme to be clearer about the level of fees charged. There is every indication the BBC has heeded these calls and we believe the next series of Heir Hunters to be broadcast in the New Year will be more transparent about the fees charged by heir hunters.

Similar concerns in Canada led the Government of Ontario to pass legislation earlier this year to cap percentage fees at 10% and to force heir locators to disclose the name of the deceased, the value of the estate and a breakdown of costs. This legislation has allowed beneficiaries to calculate the cost of percentage fees and undertake their own research if they do not want to sign-up with the heir hunter. Regulation of this kind is urgently needed in this country, given that most heir hunters in the UK still have a stated policy of withholding such information from beneficiaries until they agree to sign away a significant percentage of their inheritance.

We have also seen counsel opinions that question the lawfulness of contingency fees. Personal Representatives have a legal duty to act in the interests of the estate and cannot profit from their position. In an opinion written by Georgia Bedworth, a barrister at 10 Old Square, she states, 'personal representatives should not instruct heir locators on a contingency basis as to do so they are at risk of breaching their duty to beneficiaries.' Constance McDonnell, a barrister at 3 Stone Buildings was quoted in The Times in August as saying that ‘there is a real risk that these fees would be held to be illegal’ if a case were to be taken to court.

Title Research remains firmly focused on delivering value for money for our clients and a fair deal for beneficiaries. These principles are cornerstones for our business.

Our campaign will continue to move forward next year. Independent consumer advice will be crucial, to ensure beneficiaries have somewhere to go for trusted advice on how to get a fair deal. We are continuing to seek best practice guidance from professional bodies and will press further for regulation of our industry.

David de Menezes is Head of Communications at Title Research
david.demenezes@titleresearch.com

We have updated our Advice Guide to heir hunter fees: Heir hunters - know your rights.

If you would like a full copy of the legal opinions on this subject, please email us at info@titleresearch.com