Lessons from £500,000 family farm dispute

A high-profile family dispute over farm inheritance should be a lesson for other farmers, an agricultural law expert has said.

The case saw Eirian Davies awarded £500,000 after she worked on the family dairy farm for 25 years in the understanding that she would eventually inherit the property near Whitland in Wales.

However, after a series of fallings out, her parents changed the will so that the farm would be split equally between Eirian and her two sisters.

In the case, which was dubbed “Cowshed Cinderella” in the media, Eirian was initially to be awarded £1.3m under a “proprietary estoppel” claim, but this was reduced to £500,000 in a Court of Appeal ruling in 2016.

“It is normal in ‘proprietary estoppel’ to work for ridiculously low wages on the farm and that, the court says, gives you a right to compensation,” solicitor Tim Russ said.

The first is to be fair and transparent about payment for work done

“[These cases] are usually very expensive because there are virtually no documents, so you need to call in lots of witnesses to say what they heard people say.”

Speaking in a webinar organised by the National Sheep Association (NSA), Russ listed several key lessons to take from the Davies v Davies case.

“The first is to be fair and transparent about payment for work done. If you want your children to work for less than they are worth, you need to take advice about how you achieve that,” he said.

Promises

Russ said that the Whitland case centred around a series of promises that Eirian Davies’ father made without proper planning or advice. “It needs to be a plan, not a throw away statement that you make.”

If you draw up documents, make sure they are completed and executed

The Lincolnshire based solicitor said it should be clearly established when planning for succession, whether the plan involves the farm business, the farmland, or both, as this can be a common cause of contention down the line.

“If you draw up documents, make sure they are completed and executed. Transparency is important and it generates trust,” Russ said.

NSA members were told that Eirian Davies’ parents were unhappy with her choice of husband, which made them reluctant to finalise their wills.

“You can protect assets in the next generation. The law allows pre-nuptial agreements and post-nuptial agreements made after marriage, if necessary,” Russ said.

He also recommended the use of third-party facilitators if disputes within farm families begin to arise.