Settlement on behalf of Children Tom Stoate, Garden Court Chambers - - PowerPoint PPT Presentation

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Settlement on behalf of Children

Tom Stoate, Garden Court Chambers toms@gclaw.co.uk May 2020

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Rules

The practice and procedure for civil claims brought children is governed by CPR 21 and Practice Direction 21. These rules aim to protect children involved in litigation (including from “the negligence of advisers”!). In civil litigation a child is a person under the age of 18 (CPR 21.1(2)) – note that the term “minor” is no longer used. In general:

• A claim by a child will usually be conducted on their behalf by a litigation friend;
• No litigation steps can be taken until the child has a litigation friend in place;
• The court must approve the settlement of any claim to which a child is a party;
• The court directs how money any recovered on behalf of a child, or paid into court, is dealt

with.

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Protected parties

A child can also be a protected party under CPR 21. A protected party is a person who lacks capacity within the meaning of the Mental Capacity Act (MCA) 2005, section 2(1) of which states: “a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain.” The Court of Protection may appoint a deputy to make decisions on behalf of a protected party under section 16(2) of the MCA 2005.

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Litigation friends

Unless the court orders otherwise, until a litigation friend has been appointed, any step taken by a child in litigation will have no effect. In practice, a parent, guardian or other relative will usually be a child’s litigation friend. The court may authorise a child to conduct proceedings without a litigation friend (CPR 21.2(3)); but the court will do so only if it is satisfied that the child has sufficient maturity and understanding: see Gillick v West Norfolk and Wisbech Area Health Authority [1985] UKHL 7. Note that if the child is also a protected party, a litigation friend must always be appointed: CPR 21.2(1).

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Who can act as a Litigation Friend?

Under CPR 21.4(3), a litigation friend must:

• Be able to conduct proceedings “fairly and competently” on behalf of the child (and to

take all decisions and steps in the claim for the benefit of the child);

• Have no adverse interest to that of the child; and
• Undertake to pay any costs which the child, if a claimant, may be ordered to pay in

relation to the proceedings. If no one else is able or willing to act on behalf of the child, the Official Solicitor (OS) will do so. The OS may also act as personal representative of the estate of a deceased person or trustee of a trust (note that if the OS is appointed, provision must be made for the payment of her charges: PD 21.3.4).

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Who can act as a Litigation Friend?

In R (Raqeeb) v Barts Health NHS Trust [2019] EWHC 2976 (Admin), MacDonald J summarised the principles on CPR 21 from the authorities. A litigation friend must:

• Be able fairly and competently to conduct proceedings – which includes acting under

proper legal advice, but also being able to exercise independent judgment on any such advice. A litigation friend who does not act on proper advice may be removed.

• Have no interest adverse to that of the child – there is no principle that a family

member cannot act as a litigation friend, so long as they can take a balanced and even-handed approach to the relevant issues; nor it there authority to suggest that religious beliefs per se disqualify a person acting as a litigation friend.

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Procedure for appointing a Litigation Friend

Under CPR 21, there are two alternative procedures for appointing a litigation friend:

• Straightforward filing at court (CPR 21.5); or
• By order of the court (CPR 21.6) – which is necessary where a party to the proceedings other

than the child seeks to have a litigation friend appointed, or an existing litigation friend is to be replaced.

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Appointment without court order

The proposed litigation friend must prepare and serve a certificate of suitability (Form N235), certifying that they satisfy the conditions specified in CPR 21.4(3). Pursuant to PD 21.2.2 the person seeking appointment must state:

• That they consent to act;
• That they know or believe the claimant [is a child / lacks capacity to conduct the

proceedings];

• In the case of a child who is also a protected party, the grounds of their belief (attaching any

relevant medical opinion or expert opinion);

• That they can fairly and competently conduct proceedings on behalf of the child and have no

interest adverse to that of the child; and

• Where the party is a claimant, that they undertaking to pay any costs which the party may be
• rdered to pay in relation to the proceedings (subject to any right they may have to be repaid

from the party’s assets).

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Without court order (cont.)

The certificate must be served on every person on whom the claim form should be served under CPR 6.13. This means:

• If the child is not a protected party, it must be served on one of the child’s parents or

guardians (or, if there is no parent or guardian, an adult with whom the child resides or in whose care the child is): CPR 6.13(1);

• If the child is also a protected party, it must be served on one of:
• The attorney under a registered enduring power of attorney;
• The donee of a lasting power of attorney (LPA);
• The deputy appointed by the Court of Protection; or,
• If there is no such person, an adult with whom the protected party resides or in whose

care the protected party is: CPR 6.13(2).

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Without court order (cont.)

• The certificate of suitability (N235) must also be served on any other person upon whom the

court has ordered the claim form may be served: CPR 6.13(4).

• It must then be filed at court, together with a certificate of service: CPR 6.29.
• Where the child is a claimant, the certificate is filed at the time the claim is made: CPR

21.5(3).

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Appointment by court order

Any party to the proceedings or person who wishes to be a particular party’s litigation friend may apply for an order under the CPR 23 procedure. The court may appoint the person proposed in the application or may appoint any other person who complies with the conditions set out in CPR 21.4(3) – see e.g. Jamous v Mercouris [2019] EWHC 1746 (QB). The application notice should be filed when the child issues proceedings or takes their first step in the proceedings. Pursuant to PD 21.3.3, the applicant must submit evidence to satisfy the court that the proposed litigation friend:

• Consents to act;
• Can fairly and competently conduct proceedings on behalf of the child;
• Has no interest adverse to that of the child; and
• Where the child is a claimant, undertakes to pay any costs which the party may be ordered to

pay in relation to the proceedings (subject to any right they may have to be repaid from the assets of the party).

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Appointment by court order (cont.)

The application must be served on:

• Every person on whom the claim form must be served under CPR 6.13 and the protected

party (where the child is also a protected party), unless the court orders otherwise: CPR 21.8(1) and (2)

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The end of a Litigation Friend’s appointment

The litigation friend’s appointment automatically ends when a child reaches 18, unless the child is also a protected party (in which case appointment ends by court order: CPR 21.9). The court also has a wide discretion to terminate the appointment of a litigation friend, or to substitute a litigation friend: CPR 21.7. For example:

• Where there is a conflict of interest (e.g. Zarbafi v Zarbafi & ors [2014] EWCA Civ 1267); or
• Where the OS could no longer act because the anticipated source of funding for his (now her)

costs had ceased to be available (e.g. Bradbury & ors v Paterson & ors [2014] EWHC 3992 (QB) – note that the court in that case held that CPR 21.7 did not restrict the power to terminate a litigation friend’s appointment, and that there were no further requirements after doing so (for example, to identify a substitute)). Note: the consent of any person to act as a litigation friend is not irrevocable.

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End of appointment (cont.)

A litigation friend will have extensive dealings with a parent or person responsible for the child claimant or protected party. The court should therefore be reluctant to impose a litigation friend

• n the parent or responsible person, and should only do so if there is no other viable candidate:

see Keays v Executors of the Late Parkinson [2018] EWHC 1006 (Ch) If a claimant does not have capacity to litigate at the outset of the claim, the litigation friend continues to have authority to act until they are removed by court order: CPR 21.9(2); see Fletcher v Keatley [2017] EWCA Civ 1540 Note that the court may not terminate the appointment of a litigation friend retrospectively ab initio: see Davila v Davila [2016] EWHC B14 (Ch)

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When a child reaches 18

Pursuant to PD 21.4.2, when the child reaches the age of 18 (provided that the child is not a protected party) the child must serve on the other parties, and file at court, notice:

• Stating that they have reached full age;
• Stating that the litigation friend’s appointment has ended;
• Giving an address for service; and
• Stating whether or not they intend to continue the proceedings.

If the child does not serve this notice, within 28 days (after the day on which the appointment of the litigation friend ceased), the court may, on application, strike out the claim: CPR 21.9(5).

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When a child reaches 18 (cont.)

Note: if the litigation is continuing, the title of the proceedings should be changed to reflect the fact that the child is now of age. If money has been paid into court for the benefit of the child, they should apply for it to be paid

• ut: PD 21.9.8.

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Expenses

Litigation friends are generally entitled to recover their expenses from money recovered by or on behalf of a child – subject to certain restrictions (CPR 21.12):

• Only reasonably incurred expenses may be recovered, and must reasonable in amount;
• If any costs have been disallowed on assessment of costs recoverable from the other side, the

litigation friend cannot recover those costs from the child;

• If the child’s recovery is £5,000 or less, the litigation friend cannot recover more than 25%

without the court’s consent – and the maximum recoverable is 50% of the award of damages. Where the litigation friend’s expenses are recoverable as inter partes costs, a claim should be made at the detailed assessment hearing, or at the hearing under CPR 21 to approve a settlement. If there is no such hearing, costs may be claimed by a separate application under CPR 23: see PD 21.11.1.

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Settlement

• In claims by (or against) a child, any settlement or compromise, and any payment or

acceptance of money paid into court, must be approved by the court (CPR 21.10(1)).

• Until the court’s approval is obtained, there is no binding agreement and either party

may repudiate the settlement: see Drinkall v Whitwood [2003] EWCA Civ 1547; also Revill v Damiani [2017] EWHC 2630 (QB).

• All material facts should be before the court when it is asked to approve a settlement

which will bind a child party: see Barker v Confiànce Ltd and others [2019] EWHC 1401 (Ch).

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Settlement before issue of proceedings

Where settlement is achieved before a claim has been issued, proceedings should be commenced under CPR Part 8 to seek and obtain the court’s approval: CPR 21.10(2). There should be an opinion on quantum/ the merits of settlement by counsel, except in very clear cases: see PD 21.5.2 (if in doubt, seek advice!) If a potential claim has been settled, and only the court’s approval of the agreement is being sought, PD 21.5.1 states that the Part 8 claim should include:

• The terms of settlement, or a draft consent order in Form N292;
• A statement whether and, if so, to what extent the defendant has admitted liability;
• The age and occupation (if any) of the child;
• A singed statement setting out the litigation friend’s approval of the proposed settlement; and
• A copy of any financial advice taken as to the proposed settlement.

Infant settlement hearings are usually heard by a master or district judge: PD 21.5.6(1).

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Settlement after issue of proceedings

After proceedings have been issued, an application for the approval by the court of a settlement

• n behalf of a child should be made to a district judge or master using the procedure in CPR 23.

Pursuant to PD 21.6.3(2), a draft consent order (Form N292) may be needed where your claim is for damages for future pecuniary loss in a personal injury claim by a child and the settlement aims to provide for periodical payments. If there is any doubt as to whether to include a draft order in an application for the court’s approval of a settlement, it is advisable to check with the master’s or district judge’s clerk when you are filing the application notice. Pursuant to PD 21.9.1, at the settlement approval hearing the litigation friend must provide:

• CFO Form 320; and
• Any evidence or information which the litigation friend wishes the court to consider in

relation to the investment of the award for damages. .

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Counsel’s advice

Unless the case is very clear, counsel’s opinion on the merits of the settlement, a copy of any financial advice, and any documentary evidence material to the opinion on the merits of the proposed settlement should be submitted to the court: PD 21.6.4 Note:

• Counsel’s advice on quantum is a privileged document which must never be disclosed to

the other side!

• A copy of counsel’s advice must to be lodged at court when the application is made; however,

note that some judges prefer to consider the papers first and not be influenced by counsel’s

• pinion initially. It is suggested that the advice is filed in an envelope, clearly marked

with its contents and clearly marked for the judge’s attention only. A copy of the instructions to counsel should usually also be supplied to the court with the opinion (unless the advice contains a very clear summary of those instructions)

• It is also sensible to include copies of any key authorities on which you are relying

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The hearing – practical tips

• Arrive early for a pre-hearing conference with counsel and the litigation friend – it is

sometimes the only opportunity counsel has to discuss the case with the client, and it is very important that you and the litigation friend are as clear as possible before the hearing on all the issues which might arise

• Forms N292 and CFO320 are usually best completed with the litigation friend at court – in

particular as a way to ensure they contain the most up to date contact information, etc.

• Form CFO320 specifically asks whether the accompanying leaflet – CFO403 – has been read

before completing the form. Judges will very often ask the litigation friend in the hearing whether they have considered this guidance. You should therefore be clear that the litigation friend has been sent a copy of the leaflet, and read (and understood) it, prior to the hearing.

• See the information leaflet here: https://www.gov.uk/government/publications/court-funds-

litigation-friend-information-sheet

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Practical tips – Litigation Friends

• The litigation friend should be reminded that, once the settlement has been approved by the

court, the claim is finalised. If the litigation friend considers at a later point that the child’s injuries have not recovered or they have ongoing problems (and the settlement has already been approved), it is too late to come back for more. It is therefore very important that:

• It is confirmed that a child has recovered at the time of the hearing, or there is an up-to-

date expert opinion (or medical evidence) as to the child’s prognosis; and

• The litigation friend – and usually the child (assuming not to young) attend court so the

judge can confirm the position for themselves (the judge will often want to speak both to the child and the litigation friend for themselves – so make sure all are prepared)

• Note that any damages received are compensation for the child alone and cannot be used for

any other purpose – even those which the litigation friend might consider would also benefit the child. You may be asked to apply for an interim payment from the settlement – this is only likely to be granted if the judge considers the payment requested is for the child’s education. Applications for an interim payment for purchase of particular require good documentary evidence (e.g. receipts) – and a good reason!

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Practical tips – Litigation Friends (cont.)

• The court will (should) write to the litigation friend every year until the child’s 18th birthday

setting out details of the balance of the money held for the child in the court account, if that it where it is held. If neither parent has been acting as the litigation friend, they may not know how much money is in the court account. Once the case has settled in principle with the defendant, assuming there is no conflict (or such conflict has passed by the time the case come to court for the infant settlement hearing), it might make sense for a parent to step into the role of litigation friend.

• If so, the judge will expect the current and new proposed litigation friend to attend the

hearing in order that they can satisfy themselves (often by asking questions of them directly) that he/she satisfies the requirements of CPR 21.4(3).

• The litigation friend has personal liability in respect of costs which continues until the

relevant notice has been served. If the relevant notice has not been served it is likely that the matter will be adjourned, which could lead to unnecessary costs being incurred.

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Practical tips – Litigation Friends (cont.)

Investment options should be discussed and explored with the litigation friend before the settlement hearing (although note the limits of your duties in respect of financial advice). The rate of interest for the Court Funds Office (CFO) is currently very low (0.1%). If the child has a Junior ISA or Child Trust Fund account, or another alternative investment vehicle, that could be a suitable alternative to money being paid into the CFO. Note: an ordinary bank account will not suffice! If such a suitable alternative exists the litigation friend should bring documentary evidence of the account to the hearing with them. Note, however, that the judge may not actually agree with the preferences of the litigation friend as to the investment – the final decision rests with the judge.

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Practical tips – birth certificates

A couple of points to consider:

• When issuing proceedings, ensure that the claim is issued under the claimant’s name as it

appears on their birth certificate. Otherwise, at the hearing there will need to be an application for the claimant’s name to be amended and to dispense with re-service.

• The child claimant’s birth certificate (or a certified copy of it) needs to be brought

to court for the infant settlement hearing. Litigation friends often forget – and have to rush home for it. The settlement will only be agreed in principle only until the birth certificate has been provided/seen by the judge, causing a delay in proceedings.

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Control of money received on child’s behalf

Money recovered by or on behalf of a child may be dealt with only as directed by the court. The court may direct that some or all of the money recovered is paid into court, invested or otherwise dealt with: CPR 21.11(1). The court may appoint the OS to act as guardian of a child’s estate where money is paid into court

• r, otherwise, where the appointment ‘seems desirable to the court’: CPR 21.13.

If the amount of money recovered is very small, the court may order that it is paid directly to the litigation friend to be put into a building society account (or similar) for the child’s use, in accordance with CPR 21.11.2 (see PD 21.9.7). Unfortunately, however, there is no guidance in the Rules on what is meant by ‘very small’ – and, anecdotally, no real consistent approach by the courts. If the money is invested in the CFO, it must be paid out to the child on application when they reach the age of 18: PD 21.9.8. Any investments will be sold and the proceeds transferred to the child (now adult) or will be transferred into their name: PD 21.13.2.

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Costs

The Civil Procedure (Amendment) Rules 2016 (SI 2016/234) amended CPR 3.12(1) so that claims made on behalf of a child are excluded from the costs management regime: see CPR 3.12(1)(c). Assessment of costs: The litigation friend continues to be liable for any costs until they serve (or the child serves) notice that their appointment to act has ended: CPR 21.9(6). The general rule is that all costs payable by a child party must be subject to detailed assessment: CPR 46.4(2). At that assessment, the court must also assess any costs payable to the child (unless the court has issued a default costs certificate). Where there has been a detailed assessment, the solicitor acting for a child cannot recover more in costs, either from the child or from the damages awarded, than the assessed amount.

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Costs (cont.)

PD 46.2.1 provides that the circumstances in which the court does not need to order detailed assessment of costs are:

• Where there is no need to do so in order to protect the interests of the child or their estate;
• Where another party has agreed to pay a specified sum in respect of the child’s costs, and the

solicitor acting for the child has waived their right to claim any further costs;

• Where the court has decided that the costs are payable to the child by summary assessment

and the solicitor acting for the child has waived their right to claim any further costs; and

• Where an insurer (or other person) is liable to discharge the costs which the child would
• therwise be liable to pay to their solicitor, and the court is satisfied that the insurer (or other

person) is financially able to discharge those costs.

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Costs (cont.)

Note that there is no general rule precluding the making of a costs order against a litigation friend acting for a child. In Barker v Confiànce Ltd & ors [2019] EWHC 1401 (Ch), the court held that when considering whether to make a costs order against a litigation friend who had acted for a child party who had been unsuccessful, the litigation friend would generally be liable for such costs as the relevant party, if they had been an adult, would normally have been required to pay. Costs can sometimes be dealt with at the Part 21 infant settlement hearing – hopefully avoiding incurring further by dealing with this issue later. If costs are agreed in advance, evidence of the agreement reached (in respect of costs) will be required and should be put before the judge. If costs have not been agreed but the matter is a fixed costs case you could ask the judge to summarily assess costs on the day of the hearing. It is sensible to confirm in advance what (if any) interim payments have already been paid – e.g. medical expert’s fees.

Thank you

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