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capacity warning!

18 July 2013

Handlers dealing with brain injury claims will be used to dealing with issues of capacity, but a recent case demonstrates the need for all injury claims handlers to be aware of the warning signs which could indicate a need for approval, or risk having to re-open their file at a later date.

You will be aware that to be valid any settlement on behalf of a child, or other person lacking capacity must be approved by the Court. What happens when approval is not secured? In case there was any doubt, a recent case has given a clear answer to that question.

Dunhill v Burgin

In Dunhill v Burgin 2012 the claimant, who was an adult, was injured crossing the road when struck by a motorcycle ridden by the Defendant. She suffered traumatic brain injury and was represented by solicitors and counsel. Her claim came to trial on 7 January 2003. Settlement was agreed at the door of the court in the sum of £12,500. The judge made an order for judgment in those terms but no issue arose about capacity.

In February 2009 the Claimant issued an application alleging that she did not have capacity at the time of the purported settlement on 7 January 2003 and therefore applied for the judgment to be set aside and further directions given.

The court was clear that a party who in fact lacks capacity is a protected party even if they have not been officially declared to lack capacity. Accordingly the consent order settling the claim was not valid even though the lack of capacity was unknown to anyone acting for either party at the time. As a matter of public policy the court felt that whilst certainty and finality were desirable in any litigation there was also a public interest in the protection of vulnerable people. In light of the important point of principle the Supreme Court has granted permission for a “leapfrog” appeal to go straight to the Supreme Court.

This case raises the risk that settlements may be set aside where the Claimant didn’t have capacity to conduct the proceedings even though that was unknown to all involved. We expect the Supreme Court will consider introducing an objective test or at least will set out some general guidance. We also expect it will become routine for the Court to ask the Claimant’s representatives to confirm (or perhaps certify) in appropriate cases that the Claimant has capacity. This is of course likely to see experts being instructed more frequently to report on this issue.

If in doubt…

In a case like Dunhill it may not be easy to pick up on capacity issues,  though as Dunhill had a mental health advocate at the trial in January 2003 it is surprising this was not considered.  However there are a number of signs for which handlers in all claims should be on the lookout:

  • A blow to the head
  • A period of unconsciousness following the accident
  • Pre or post accident amnesia
  • Medical investigations such as CT or MRI scans to the head
  • A “GCS” measurement of less than 13 mentioned in the medical notes or reports (GCS stands for Glasgow Coma Score and a reading of less than 13 is indicative of a moderate head injury)
  • A history of psychiatric problems

Remember, it when it comes to approval it does not matter what has caused the claimant to lack capacity.

In some cases, you may identify some warning signs but, for example, because injuries were minor decide not to pursue them. In others you may be able to satisfy yourself on capacity by speaking with your opponent. However for a definitive view you are likely to require a medical report of a psychiatrist, or sight of a report from your opponent. While that amounts to an additional cost, if it reduces your risk of having to re-open your file and allocating a new reserve at some time in the future it could be worthwhile. Remember if the claimant does not have capacity then limitation is not running and so a claim could come back to life at any time.

Where capacity is borderline, and you have reached a good settlement, you might even push for an approval hearing. That way you can be confident the case will not be re-opened.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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