Posted in Fairness Campaigns

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As a result of extensive research, we can reveal that some local authorities are fostering anti-competitive practices by providing information to heir hunters on an exclusive basis. This has several possible serious consequences for the entitled relatives – here we focus on the issue of excessive charges.


Amongst everything that we discovered during our investigation into heir hunters’ relationships with local authorities, perhaps nothing defies comprehension more than this:

even when local authorities appear to have arrangements with more than one heir hunting company, they still insist on passing information to them one at a time.

For example, one council told us that “any probate researcher which approaches us is put on a list and then we take it in turns to use either one” while another stated that they “were approached by each of these companies offering their services for free [...] To ensure that the process is fair and equal, referrals are made on a ‘cab rank’ basis.”

Fair to whom?

When ‘fair and equal’ equate to a ‘cab rank’ it’s clear that the interests of heir hunters are taking precedence over the interests of any potential beneficiaries that they will sign up.

While, in the main, the councils we contacted seemed to be aware that heir hunters are commercial operators, their actions display an astonishing naivety about the value of this market and the fundamental and vital role of competition in driving down prices.

After AW died intestate, the head of Manchester social services referred her case to an heir hunter who quickly discovered that although AW and her husband had been separated for over 30 years they had never divorced. The husband, who was easily located, was thus entitled to the whole estate. Knowing that there was no competition, the heir hunter obtained a 25% finder’s fee contract from the husband, earning more than £125,000 for minimal effort.

What happens when you sacrifice competition?

When a researcher is given exclusive information about an intestacy, they know that no-one else will be competing with them to find next-of-kin or to offer a more attractive deal in the form of a lower fee.

Competition is entirely circumvented and consumers (in this case, any entitled relatives) do not benefit from the lower fees that are the natural consequence of rival firms racing to find them and sign them up. The result is higher – and often excessive – finders’ fees. This is axiomatic: when there is no competitive dynamic, relatives miss out on consumer choice and pay more.

After BLC died intestate, Waltham Forest Council passed his case to a firm of heir hunters who located BLC’s two estranged daughters. The heir hunters obtained a one-third finder’s fee from one daughter, but the other declined to sign up, so the heir hunters persuaded the first daughter to sign a revised contract giving away one-third of the gross estate rather than just of her individual share. With the cooperation of a law firm, the heir hunters made sure that the first daughter became the personal representative. When the solicitors distributed the estate, the second daughter was rightfully aggrieved to lose more than one-third of her due share when she hadn’t signed anything to that effect. She sued both the heir hunters and the solicitors, with the result that the heir hunters had to repay £82,000 to the estate and the solicitors refund costs of £47,000.

Ethical obligation and legal duties?

It’s not yet clear exactly what legal risks are involved when a public body supplies a single heir hunting firm with exclusive information that can be used to generate inflated fees. However, the reputational risks are clear.

Local authorities can surely be said to have an ethical obligation to avoid harm to third parties such as the relatives of those who die within their district – relatives who may end up paying excessive fees to an heir hunter that the authority has provided with exclusive information.

Beyond this, an argument can be made that when an authority passes financially valuable information to a single heir hunter who proceeds to charge beneficiaries a fee, the authority may be placing itself in a fiduciary relationship with the beneficiaries, with attendant legal obligations.

More than a year after PSC’s death North Tyneside Council referred his intestacy to a firm of heir hunters who subsequently located all four entitled cousins. What is interesting about this case is that two of the cousins lived locally and had attended PSC’s funeral where they had made themselves known to council officials. No one alerted these cousins to the fact that their relative had died intestate. Accordingly, the following year they didn’t connect an approach by the heir hunters with their cousin’s death, but instead assumed that it must involve some other distant unknown kin. In signing the finders’ fee contracts for a share of the estate of an ‘unknown relative’, they collectively and unnecessarily gave away £25,000.

There is a solution to the problem of overcharging – one that’s ethical, simple and above all obvious. After all, we’ve known about the benefits of competition since Adam Smith first coined the term ‘the invisible hand’.

You can see this ‘hand’ at work every day on the bona vacantia list, where intestacies are openly published, allowing multiple rival firms to compete in solving them.

Some bona vacantia cases entail months, even years, of painstaking, speculative research. There is much less competition with these cases, because only a few companies have the expertise and the resources to solve them, and the fees charged are correspondingly higher.

However, on more run-of-the-mill cases, open and fierce competition drives fees down – sometimes to as low as 5%. This is because an heir hunter who has tracked down a beneficiary knows that a rival firm might be on the doorstep within hours, and adjusts their fee accordingly. In this way, market forces reduce the cost to the consumer.

An ethical and pragmatic solution

Clearly, when local authorities decide that they need to locate next of kin, entering into an arrangement with a single individual or firm is neither the most efficient nor the most ethical way forward.

At the very least, an authority that chooses to pass tracing work directly to researchers should ensure that competition is built into the referral system.

For example, following an appropriate selection process, a panel of three probate genealogy providers could be appointed and, whenever there was a need to locate next of kin, information would be passed to all three simultaneously.

Alternatively, authorities may wish to follow the lead of several councils who publish website lists of public health funerals before, or instead of, involving individual researchers. Like the bona vacantia list, these notices ensure that many researchers can work to locate relatives, introduce consumer choice and even allow next of kin who see the notice to contact the council themselves.

Approaches like those outlined above not only minimise the local authority's legal and reputational risk, they also subject commission levels to much needed competition.


You can read the full report on our freedom of information requests here.


Useful reading: The case for competition: transparency leads to better researchMyths about the Public Health Act and the duties of local authoritiesDouble charging: unethical, unjustifiable and rife, Handling the affairs of those who die intestate with no known next of kin – a voluntary code of practice for public authorities.


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