Few winners in a family feud: Prevention is much better than cure when it comes to potential legal disputes between relatives. Sue Fieldman reports

A FAMILY argument is unpleasant enough, but when the words turn into court action and the battle is about money, then the only winners are the lawyers.

A family from Torquay in Devon have recently taken their financial differences all the way to the Court of Appeal. The circumstances of their case could affect millions of other households facing the problem of what to do with aged parents.

Edward Baker was 75 and in a frail state of health. He lived alone in a council house where he enjoyed security of tenure.

Mr Baker had amassed substantial savings. He had intimated to his son that his will would leave him about pounds 20,000.

His son and daughter-in-law were living in rented property. The family decided to buy a pounds 54,000 house in Devon and live together.

The father put in all his savings of pounds 33,950, and the couple took out a mortgage for the balance. In return Mr Baker was to have a 'granny room' rent-free for the rest of his life, but he did contribute to housekeeping expenses as well.

Within a year the arrangement came to an abrupt end. A family dispute made it impossible for them to all live in the same house, and Mr Baker moved out.

He now has a council flat in a sheltered housing development, where he has security of tenure for life. He does not have to pay rent as he has been granted housing benefit.

Mr Baker went to court for the return of all his money. He succeeded. The couple appealed.

The Court of Appeal has now decided that he is not entitled to all his money back.

The judges said that the money was provided with two aims in mind - the provision of a family home as well as rent-free accommodation for life for himself.

What Mr Baker had lost was not the whole pounds 33,950, but merely the right to rent-free occupation for the rest of his life. The case is to be referred back to a lower court for an assessment of the value of the rights lost.

Five years after the family split up, there is yet another court case in prospect. The legal costs are mounting.

All the parties are legally aided but even so any money received is likely to be subject to the Law Society's statutory charge - a claw-back to get the costs on legal aid cases.

Chris Whittaker, spokesman for Mr Baker's solicitors, Woolcombe Beer Watts, said: 'At the end of the day he might receive nothing. It all hinges on what the Legal Aid Committee decide. It is a very sad case. Basically people are entitled to bring a case to court, but in cases like these the only people benefiting are the legal profession.'

Prevention is undoubtedly better than cure when it comes to family feuds. John Samson, property partner with the solicitors Nabarro Nathanson, says that it is an old truism that family fights are the

most protracted and irreconcilable.

'This case provides an object lesson for all families setting up granny- flat arrangements,' he said.

'Make sure you build in a cheap, quick and effective procedure for resolving disputes. All agree to abide by the decision of a solicitor, surveyor, arbitrator or whoever, instead of fighting for five years.'