Do not underestimate the need for the court’s approval or be prepared to pay your opponent’s costs.
In accordance with CPR 21.10, where a claim is brought on behalf of or against a child(ren), any settlement MUST be approved by the court, even if this is apportioned.
In the recent case of Bayless & Ors v Norfolk and Norwich University Hospitals NHS Foundation Trust [2023] EWHC 2986 (KB), there were costs consequences for not seeking the court’s approval.
The Claimants in this case were the Deceased person’s wife, Mrs Bayless, and their children. On 26th February 2018, Mrs Bayless brought a claim against the Defendant, the Trust, on behalf of her late husband’s estate, herself and her children for pain, suffering and loss of amenity, bereavement and loss of dependency. On 29th August 2019, the Trust made a Part 36 offer of £340,000, which was accepted by Mrs Bayless on 2nd September 2019. The settlement money was then paid out. On 8th December 2022, Mrs Bayless and the children issued proceedings against the Trust, each claiming psychiatric injury suffered by witnessing the death of Mr Bayless. Mrs Bayless stated that she was unaware she had suffered psychiatric injury, namely post-traumatic stress disorder until she was diagnosed in April 2020.
On 18th May 2023, the Trust made an application seeking an order to strike out Mrs Bayless’s claim as an abuse of process, as they argued that the case had already been settled by the acceptance of the Part 36 offer in 2019. Before the application was listed to be heard, the Trust identified that the original settlement had not been approved by the court in accordance with CPR 21.10, and therefore was not binding between the parties. A day before the hearing, the Trust abandoned the application. The Trust argued that the court should make no order as to costs for the withdrawal of the application, and raised Henderson v Henderson stating that Mrs Bayless may not raise any subsequent litigation following the settlement in 2019. Mrs Bayless argued that she should have her costs for the application which was sought to be stuck out.
The hearing was heard by Mr Justice Pepperall. On consideration of the facts, the judge rejected the Trust’s argument that the Claimants’ solicitors were at fault for not obtaining the court’s approval on three separate grounds:
- The Trust should have never paid the Claimants their money without the court’s approval under CPR 21.10.
- The Trust should have realised the approval was not obtained because they would have been served with the application for the approval hearing, and;
- The application was to fail in any event as the settlement of a fatal claim did not mean that any subsequent claim was an abuse of process, as Mrs Bayless was not aware she suffered from post-traumatic stress disorder until she was diagnosed in April 2020, and therefore the Trust could not rely on Henderson v Henderson.
Mr Justice Pepperall also went on further to state:
“I do not therefore accept that the lack of approval was something known only to Mrs Bayless’s lawyers or for which they alone are responsible. It should have been clear on the face of the Trust’s lawyers’ own files that the 2019 settlement had not been approved by the court. Accordingly, on the material that was available to the Trust upon proper investigation, this was always a hopeless application to strike-out Mrs Bayless’s claim.”
The Trust had also failed to show under Henderson v Henderson that Mrs Bayless’s claim brought in December of 2022 would be “oppressive” or “manifestly unfair” due to her later diagnosis and Mr Justice Pepperall believed she had brought this second claim in good faith.
In conclusion Mr Justice Pepperall was of the view that the Trust withdrew their application on the basis that it was always liable to be dismissed, if it was properly investigated that the court’s approval was never sought, and that Mrs Bayless had incurred unnecessary costs as a result. The judge ordered for the Trust to pay Mrs Bayless’s costs on the standard basis.
When dealing with a claim where there is a child or a protected party, the court’s approval should always be obtained upon settlement of damages and costs in accordance with CPR Part 21. The burden is not solely on the Claimant to know that an approval hearing should take place as the Defendant will also have on record whether a child/protected party is involved within the claim.
How can PIC help?
PIC can help you by analysing your file of papers and alerting you that the necessary steps should be taken to make an application for an approval hearing for both the main action and following costs proceedings.
Rebekkah Haughton, Costs Consultant
25.01.2024