Clients Who Lack Mental Capacity – Settlement Risks!

A recent decision by the Supreme Court may have widespread consequences for Claimants and their legal advisors.

This is often a family member. The litigation friend makes decisions on behalf of the person who lacks capacity. When a settlement is reached, the settlement is put before a judge who decides whether it is reasonable or not. This safeguard ensures that those who lack capacity do not have their cases unfairly compromised by their advisors. The system is the same when the Claimant is a child and the litigation friend is often one of the parents.

In the recent case of Dunhill v Burgin the Supreme Court had to deal with this issue. Mrs Dunhill was injured in an RTA. Her claim was settled shortly before trial when she decided to accept the defendant’s offer following advice from her legal advisors. Subsequently, it became apparent that Mrs Dunhill did not have the necessary capacity to settle her case. The case should have been brought through a litigation friend and the settlement approved by the court. It also became clear that her claim had been under-settled and was worth far more than the offer she accepted. Therefore, it is unlikely that the court would have approved the settlement if it had been required to do so.

Mrs Dunhill instructed new solicitors who requested that the court set aside the original agreement as Mrs Dunhill did not have the capacity to settle the case. The Supreme Court agreed that the original settlement should be set aside and the matter should proceed to trial with a litigation friend in place.

It is important that safeguards are in place to ensure that people who lack capacity have their cases dealt with fairly. A litigation friend should be put in place as soon as it becomes apparent that capacity may be an issue and that any settlement is put before the court for it to approve.

If you have any concerns in relation to an existing or previous claim please do not hesitate to contact us for a confidential discussion.