25 March, 2014
The UK’s Supreme Court was recently asked in the case of Joanne Dunhill (by her litigation friend Paul Tasker) v Shaun Burgin to consider the test when deciding whether a person has the mental capacity to conduct legal proceedings on her own behalf. Given an ageing population and projected increase in mental capacity issues, this is likely to be an increasingly important issue in Hong Kong as well as in the UK.
The facts of the case revolved around Mrs Dunhill, who had suffered a severe head injury when she was hit by a motorcyclist when crossing the road in 1999. Mrs Dunhill had originally settled her action against the motorcyclist for the total sum of GBP 12,500 with costs, by way of a consent order. However, this represented a gross undervaluation of her claim. Several years later, fresh legal advice was sought, and a “litigation friend” appointed (i.e. someone who would be able to conduct litigation on her behalf). Her litigation friend brought an action against Mrs Dunhill’s previous solicitors for professional negligence and sought a declaration that Mrs Dunhill did not have mental capacity at the time of the purported settlement.
The issue decided by the Supreme Court was the question of whether or not the consent order embodying the settlement required the express approval of the Court. If she were a “patient” (i.e. if she lacked mental capacity), the English Court rules specifically require that a judge must approve the settlement for it to be valid (by way of comparison, the Hong Kong rules do not require this). In this case, the parties agreed a consent order, but the trial judge did not scrutinize that consent order. It was not disputed that the test for capacity depended on whether Mrs Dunhill was a “patient” under the English Civil Procedure Rules and that this would be judged by reference to her capacity to make the decisions likely to be required in the course of the proceedings.
The parties disagreed, however, as to whether the test was to be applied to the proceedings which she actually brought, or the proceedings she might have brought had they been advised differently by her lawyer. The distinction was important in this case, because the case that was brought was relatively straightforward, whereas the alternative case (which was not brought) was much more complex. The defendant argued that Mrs Dunhill had had the relevant capacity for the case that she had brought, although they conceded she did not have the capacity to conduct the larger and more complicated claim which should have been brought had she received better legal advice.
The Supreme Court unanimously rejected the defendant’s arguments, stating that it could not be right for Mrs Dunhill’s capacity to depend on the quality of her legal advice. It held that the “test of capacity to conduct proceedings … is the capacity to conduct the claim or cause of action which the claimant in fact has, rather than to conduct the claim as formulated by her lawyers”. As Mrs Dunhill did not have the necessary capacity to conduct such a claim, a litigation friend should have been appointed from the outset and any settlement should have been properly approved by the Court. Accordingly, the Supreme Court set the consent order aside, and the original case will now return to trial. The professional negligence case has been stayed depending the outcome of that trial.
The Supreme Court stressed the policy considerations in these matters: protected parties require and deserve protection, not only from themselves but also from their legal advisers.
For further information, please contact:
Gareth Thomas, Partner, Herbert Smith Freehills
Richard Norridge, Herbert Smith Freehills
Herbert Smith Freehills Dispute Resolution Practice Profile in Hong Kong