Undue influence in family cases

The concept of “duress” between parties to a relationship has been in the press recently with the reporting of the Huhne and Pryce case.

Former cabinet minister Chris Huhne and his ex-wife Vicky Pryce were found guilty of perverting the course of justice after Pryce took driving licence points for Huhne after he was caught speeding on the M11 in 2003. Pryce had claimed the defence of marital coercion.

While the Huhne/Pryce case took place in criminal court proceedings, undue influence or duress can also arise in family situations and resulting family proceedings. For example, undue influence may apply to financial transactions within the family such as gifts, transfers, loans, guarantees, where one party to the relationship comes under pressure or influence from the other party to make the transaction, against their will and better judgement.

From recent cases, the outcome of litigation around this issue shows quite differing results. Consequently, bringing or defending a case based on duress or undue influence requires careful consideration.

In a case between a husband and wife which came before the Court in 2010, the Court held that undue influence by husband upon the wife had arisen when the husband persuaded the wife to re-mortgage the jointly owned matrimonial home to re-finance his credit card debts on a secured basis, promising on their children’s lives to pay the increased mortgage instalments. The husband was having a secret affair, which in due course led to separation and divorce. The wife claimed that the husband’s failure to disclose his affair had amounted to an abuse by him of her trust and confidence and that this thereby had unduly influenced her to enter the re-mortgage under the husband’s persuasion.

In another case before the Court in 2010, between cohabitants, the woman transferred her home from her sole name to the parties’ joint names for no consideration and within a short time of the man moving in. The Court ruled that a presumption of undue influence applied to the transfer of the home into joint names, and that this presumption held, as it was found that the woman had not received or been advised of her option to gain independent legal advice.

In a case which came before the Court last year, the wife claimed that she had signed for the facility of a Personal Loan under the husband’s undue influence, as she feared violent abuse from the husband, and had been in ignorance that a Guarantee she had also signed that month related to a separate lending to the husband’s company, meaning that her total liabilities to the lender were £2.8m as opposed to £1.45m. Her claim was rejected by the Court on the basis that the wife had not shown that the husband had committed a legal or equitable wrong which had caused her to enter the Personal Loan.

Where undue influence or coercion has been found to have occurred, this has impacted on the balance of financial settlement ordered.

For further information and advice please contact our Family team – family@blasermills.co.uk