Forsyth v Howson & Anor [2025] EWHC 653 (KB) (18 March 2025)

Neutral Citation Number: [2025] EWHC 653 (KB) Case No: G90MA118 IN THE HIGH COURT OF JUSTICE KING'S BENCH DIVISION MANCHESTER DISTRICT REGISTRY 18th March 2025 B e f o r e : HER HONOUR JUDGE CLAIRE EVANS (sitting as a Judge of the High Court) ____________________ Between: DAVID FORSYTH Claimant - and - (1) CRAIG HOWSON (2) ALLIANZ INSURANCE PLC Defendant ____________________ Michael Smith (instructed by Hugh James Solicitors) for the Claimant Jamie Clarke (instructed by Keoghs LLP) for the Defendants Hearing date: 27th February 2025 ____________________ HTML VERSION OF JUDGMENT APPROVED ____________________ Crown Copyright © I direct that copies of this version as handed down may be treated as authentic. Her Honour Judge Claire Evans : This is an unusual application in which the Defendants seek, against the wishes of the Claimant, the approval of the Court pursuant to its inherent jurisdiction of a settlement reached between the Claimant and the Defendants. The Claimant proceeds and has always proceeded without a litigation friend. Whilst there are a number of reported cases where the parties have jointly requested approval of a settlement where there is a doubt as to the claimant's capacity to conduct proceedings and both parties seek finality and the security of knowing that should it later transpire that the claimant lacked capacity, the settlement will nonetheless be binding, neither Mr Clarke who appears for the Defendants nor Mr Smith who appears for the Claimant were able to identify any case where the court has been asked to invoke the inherent jurisdiction against the Claimant's wishes. The facts The Claimant was riding an e-bicycle which collided with the First Defendant's car on 1 st February 2018. He sustained serious injuries including a moderate to severe traumatic brain injury, and head, facial and spinal injuries. The neurology experts (Drs Ellis and Silver) are agreed that he has a 7-8% risk of epilepsy as a result of the accident, that being either a lifetime risk or for the 20 years following the accident. Liability was tried as a preliminary issue in February 2022. Judgment was entered following the trial for 25% of damages to be assessed. The Defendants made a Part 36 offer on 5 th July 2024 in the sum of £250,000 in full and final settlement. The evidence before me is that counsel for the Claimant and the solicitor with conduct of the case, both of whom have much experience in this type of work, took the view that the offer was too low and should not be accepted. The minimum, it is said, that counsel would be prepared to recommend to the court in an approval advice would be £275,000 with an award of provisional damages. Notwithstanding that advice, the Claimant accepted the Part 36 offer. The evidence on capacity to conduct the proceedings (litigation capacity) The neuropsychology experts Drs Harrison and Caswell agreed in their joint statement of 21 st December 2023 that the Claimant "most likely retains capacity to litigate, assuming that he is provided with appropriate levels of support and his reading difficulties and cognitive deficits are fully accommodated throughout the decision-making process". That has been their consistent view throughout the proceedings. The neurology experts, Drs Ellis and Silver, agreed in their joint statement of 29 th December 2023 "there is no evidence to overturn the presumption of capacity in this case for DF to instructing [sic] his legal team". Again, that has been their consistent view throughout the proceedings. The evidence on financial capacity The experts are not agreed on the issue of financial capacity. For the Claimant, Dr Harrison considers he is most likely capable of managing his day-to-day finances with support, but would struggle to manage larger sums of money and so lacks capacity to manage his property and affairs. Dr Ellis had "concerns about the Claimant's ability to manage significant sums of money" and thought that financial capacity should be kept under review with mechanisms in place to protect him against impulsive spending. For the Defendants, Dr Caswell in her original report opined that the Claimant had capacity to "manage a moderate financial award if practical steps are taken and reasonable adjustments are made". In the joint report she said that the examples given of financial apparent impulsivity did not provide clear evidence that the presumption of capacity should be overturned though recognising it was a matter for the court. Dr Silver had no concerns that the Claimant was more likely to have problems managing large sums of money without advice than prior to the index accident and said that he had not seen any "really good evidence of impulsive spending" on the part of the Claimant. The intention of the Claimant's solicitor is to obtain further evidence on financial capacity in the light of the size of the settlement and to make an application to the Court of Protection if appropriate. The concern of the Defendant is that when that application is made the evidence may indicate that the Claimant did not have capacity to accept the Part 36 offer, which would lead to the unravelling of the settlement unless it had already been approved pursuant to the inherent jurisdiction. In the alternative, the Defendants argue that the decision to accept the Part 36 offer is itself a significant financial decision, so that the evidence on financial capacity undermines the assertion that the Claimant has litigation capacity insofar as it relates to the decision to accept the offer. The general principles A protected party is defined as "a party … who lacks capacity to conduct the proceedings" (CPR 21.1(2)(d)). A protected beneficiary is defined as "a protected party who lacks capacity to manage and control any money recovered by them or on their behalf or for their benefit in the proceedings " (CPR 21.1(2)e). It follows that for the purposes of Part 21, one may be a protected party without being a protected beneficiary, but one may not be a protected beneficiary unless one is a protected party. No settlement of a claim made by a protected party will be valid unless it has the court's approval (CPR 21.10(1)). If a party believed to have litigation capacity enters into a settlement and is subsequently found not to have had capacity, that settlement will be set aside ( Dunhill v Burgin [2014] UKSC 18 ). The approval application must be supported by the documents set out in CPR 21.10(3), which include at (h) "a legal opinion on the merits of the settlement, except in very clear cases". Where a protected party is also a protected beneficiary, CPR 21.11 makes provision for specific directions to be given as to the management of the monies recovered. There is no provision within the Civil Procedure Rules for the High Court (or indeed the County Court) to involve itself in the control of monies recovered by parties who lack financial capacity but are not protected parties (and so cannot be protected beneficiaries within the meaning of the Part 21 definition). Those matters fall to be dealt with by the Court of Protection. The use of the inherent jurisdiction of the High Court to approve a settlement to guard against it unravelling in the event of a potential later finding that a claimant lacked litigation capacity is first reported in the case of Coles v Perfect [2013] EWHC 1955 (QB) . The evidence was equivocal, or noted a doubt, as to capacity. Neither party sought a trial on the issue of capacity. Both parties sought approval of the settlement to be assured that it would be valid, final and binding. The intention was that the approval under the inherent jurisdiction would stand as an approval under Part 21 should the claimant later be found to have lacked capacity. The issue was further considered by Mr Justice Fordham in the case of Grimshaw v Hudson [2021] EWHC 425 (QB) in circumstances which he described as "directly parallel" to those in Coles . He described the court's approach in that case in this way (paragraph 6) "The inherent jurisdiction, and any question of Court approval, will – as it seems to me – always engage questions of judgment and discretion on the part of the Court, acting in the interests of justice and having regard to the overriding objective. In the present case, in my judgment, it is appropriate to ask two questions in particular. The first is whether the Court is satisfied that there is a good reason why the Court's inherent jurisdiction to approve a settlement is being invoked by the parties. The second question is whether the Court is satisfied that it is in a position to provide an appropriate "propriety check" for the purposes of deciding whether or not to give approval." In that case, as in Coles , the parties both supported the approval application. Neither party asserted positively that the claimant lacked litigation capacity, but there was a "sufficient question-mark about capacity" to provide a good reason for invoking the inherent jurisdiction. As to the second question, Fordham J said (para 8) the issue was whether the Court was "confident that it is in a position to replicate the propriety check which Court approval of settlements provides in the case of protected parties." He was provided with a confidential, supportive advice from counsel setting out why the settlement was considered by the claimant's legal team to be appropriate, by reference to all the issues in the case and all the strengths, weaknesses, risks and uncertainties. He also had a large volume of relevant material. He was satisfied he had before him "precisely the material" he would have on an approval under Part 21 (para 13). He approved the settlement. Fordham J revisited the issue in the case of Johnson v Secretary of State for Transport [2021] EWHC 745 (QB) . In that case the Claimant asserted a lack of capacity and proceeded by a litigation friend; the Defendant denied she lacked litigation capacity. Both parties sought approval, the Claimant under Part 21, the Defendant under the inherent jurisdiction. Fordham J found that he was able to conduct the approval exercise without determining the capacity issue and, having considered a detailed confidential advice supporting the settlement together with other relevant documents, he approved the settlement. The last case to which counsel referred me is CTQ v Kings Hospital NHS Foundation Trust [2023] EWHC 2975 (KB) in which Dexter Dias KC sitting as a Deputy High Court Judge approved a settlement for CTQ who proceeded without a litigation friend. The application was supported by both parties. He reviewed the medical evidence and concluded (para 22) that a "real and credible doubt remains about the claimant's ability to litigate the issues before the court and particularly whether she has capacity to manage the substantial award proposed…". He had before him a supportive advice from counsel and various documents from which he was able to conclude that the settlement was a sensible one which should be approved. The application of the principles to this case This case is unlike the other reported cases in that the request for approval is not made nor even supported by the Claimant. Perhaps more fundamentally, it differs from the others in that settlement has been reached against counsel's advice. The evidence (from two neurologists and two neuropsychiatrists) is clear that the Claimant has litigation capacity. Mr Clarke accepts that if there were no concerns about the Claimant's financial capacity there would be no basis for seeking approval pursuant to the inherent jurisdiction. [For the avoidance of doubt, he does not suggest that the phrase "most likely retains capacity" would in itself raise concerns such that approval should be sought.] Other than the argument that acceptance of a Part 36 offer is a matter in respect of which the Claimant's litigation capacity is in doubt because of doubts as to his financial capacity, there is no basis upon which a trial of the issue of litigation capacity might be directed in this case. Plainly the consideration of settlement proposals and the making or acceptance of a Part 36 offer are part of the conduct of proceedings. A party who does not have capacity in relation to those matters does not have litigation capacity and is a protected party. I presume (and have no evidence to the contrary) that the four experts who have all agreed on the issue of litigation capacity have properly carried out their duties to the court in reaching those opinions, having regard to the proper tests to be applied, including a proper understanding of what is or can be involved in conducting the proceedings. It may very well be that if the parties had come together jointly seeking approval of a settlement reached in accordance with legal advice, the Court would have found that there was good reason for invoking the inherent jurisdiction notwithstanding that, as I have already indicated, there would be no basis for a trial of litigation capacity being directed. That, of course, is not the position here. The question as to whether there is a good reason to invoke the inherent jurisdiction is in this particular case a wider one than simply whether there is a doubt over litigation capacity. I will come back to whether it is reasonable to invoke the inherent jurisdiction in this particular case after dealing with the second stage. I do not have (as required by CPR 21.10(3)(h)) a legal opinion on the merits of the settlement. It must follow that I am not in a position to carry out the propriety check which forms the second stage. I do not have before me the material which I would have were I carrying out the approval function under Part 21. Mr Clarke submits that that can be cured in one of two ways. His first suggestion was that I should read a confidential note which he had prepared on a neutral basis on the merits of the settlement (or, once I declined to read material which was not available to the Claimant, that I should permit him at a later date to file an open note on its merits). His valuation of a reasonable settlement figure, he told me, was £216,000 on a final basis, so that on reading the note I could be satisfied that the settlement should be approved. That, in my judgment, whilst inventive is misconceived. An advice from the other party to the litigation cannot properly address all of the circumstances relevant to the issue of approval, not least as the other party has not been privy to any of the conferences or other privileged material that a claimant's own counsel would have to consider. In any event, I know from the evidence that the Claimant's counsel takes the view that nothing less than £275,000 plus provisional damages is a reasonable settlement figure. The Part 36 offer is higher than Mr Clarke's valuation (which might or might not suggest that his valuation is too low). To approve the settlement in these circumstances would require me to somehow arbitrate between those different opinions as to where the range of likely final awards and reasonable settlement might fall. That cannot be said to be replicating the position of an approval hearing under Part 21. Mr Clarke's other suggestion was that if I took the view that this was a case where the inherent jurisdiction should be invoked but that I was not in a position to carry out the propriety check, I should hear further submissions as to whether it was possible to give directions which would put me in a position to carry out the propriety check. His submission was that it was unfair that the Claimant should be able effectively to stymie the Court from exercising its inherent jurisdiction, where that exercise was necessary in order to protect the Defendants' position and give finality to the parties. One of the purposes of approval proceedings is to protect the interest of children and protected parties against themselves and against any lack of skill or experience on the part of their legal advisers which might lead to a settlement for far less than the claim is worth ( Dunhill para 33). On behalf of the Defendants Mr Clarke submits, and I accept, that there may be occasions where the Court is persuaded to approve a settlement which is at a lower figure than counsel advises should be accepted. By far the more usual course of events is that there is an advice from counsel for approval purposes which commends the settlement to the Court having had regard to all the relevant considerations (some of which might relate to matters personal to the claimant, such as a desire to have an end to the litigation). Were the Claimant in this case a protected party where the litigation friend sought approval of the settlement with a negative advice from counsel, the starting point of the Court would surely be against approval. Put at the highest one can for the Defendants, there would be a significant risk that it would not be approved. If the Claimant does indeed have litigation capacity, the settlement will never be overturned and approval will never have been necessary. If it transpires in due course that, contrary to all of the evidence in this case, he does not have such capacity then the settlement will be set aside. If the litigation friend wishes then to accept the offer there will be a conventional approval hearing under Part 21. If there are good reasons for the settlement to be approved notwithstanding that counsel does not recommend it, the settlement will be approved. If the settlement is not approved, or if the litigation friend takes counsel's advice and rejects the offer, that will be the correct outcome having regard to the protective nature of approval proceedings. Whilst I entirely understand the Defendants' wish for finality, and not to be exposed to any risk that this settlement in due course is unpicked, there are four factors which in my judgment outweigh those concerns. First, this is not a case where a trial of litigation capacity might be directed on the contemporaneous, detailed, unanimous medical evidence. In practical terms, given that evidence, the parties have already secured finality by the acceptance of the Part 36 offer. Even if there remains some lingering doubt as to capacity, there is a clear contrast with Dunhill where there had been no investigation of capacity before the settlement. If there is a risk here of the settlement unravelling it can only be very small. Secondly, the Claimant opposes an inherent jurisdiction approval. It is not appropriate in my view to foist upon a claimant (whom all the experts agree has litigation capacity) a process designed to protect him when he does not need or want that protection. Thirdly, to be able to proceed to consider the question of approval I would have to consider how, if at all, I could be put in the position that I would be if conducting an approval under Part 21. That raises questions about the extent to which a capacitous claimant can or should be compelled to engage in an exercise which generally requires the disclosure of privileged advice. It is by no means obvious how it could be done. Nor is it obvious that it is desirable that it should be done in circumstances where the Defendants wish to protect themselves against the risk of unravelling of what is said by the Claimant's legal advisers to be an under-settlement of the claim. Fourthly, even if I were to find some way of putting myself in the same position as I would be in a Part 21 approval, there would remain a significant risk that I would decline to approve the settlement given that it was accepted against counsel's advice. All of those factors strongly indicate to me that this is not a case where the inherent jurisdiction should be invoked. The application is dismissed. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII