Dunhill v Burgin  EWHC 3163 (QB),  MHLO 115
The 'compromise rule' in the Civil Procedure Rules provides that where a claim is made by or on behalf of a party who lacks capacity to conduct the proceedings (a child or protected party), no settlement of that claim shall be valid without the approval of the court. (1) The rule applies to a claim settled at the door of the court where at the time of the settlement the claimant was not known to lack capacity. (2) The claimant was a protected party ('a party, or an intended party, who lacks capacity to conduct the proceedings') and the Court of Appeal had decided that she lacked capacity to settle her claim. (3) The compromise in this case was invalid; the judgment based on it must be set aside, and the substantive claim should proceed to a trial on the merits. (4) The judge granted a certificate under s12 Administration of Justice Act 1969 to enable an application to be made to the Supreme Court for permission to bring a 'leapfrog' appeal from this decision. [Detailed summary available.]
- Dunhill v Burgin  EWHC 3163 (QB),  MHLO 115
- Dunhill v Burgin  EWCA Civ 397,  MHLO 33
The ICLR have kindly agreed for their WLR (D) case report to be reproduced below.
PRACTICE — Parties — Mental capacity — Claimant compromising claim for personal injuries — Claimant later found to lack capacity at time of settlement — Lack of capacity not known to parties at time of settlement — Whether valid settlement of claim — CPR r 21(10)
Dunhill v Burgin (No 2)
B;  WLR (D) 321
QBD: Bean J: 9 November 2012
CPR r 21(10) applied to invalidate a consent judgment involving a protected party even where the individual’s lack of capacity was unknown to anyone acting for either party at the time.
Bean J so held, sitting in the Queen’s Bench Division, in determining as a preliminary issue the question whether, the court having declared that the claimant, Joanne Dunhill, lacked capacity to enter into a compromise agreement of 7 January 2003 and the defendant, Shaun Burgin, declining to ask the court to approve the compromise retrospectively, CPR r 21(10) applied where the claimant had brought the claim without a litigation friend and appeared to assert that she was not under a disability.
The claimant brought proceedings for damages against the defendant arising from a road traffic accident. A negotiated settlement was reached at the door of the court. Both parties were represented at the time and the claimant was accompanied by a mental health advocate. The claimant was not, however, acting by a litigation friend, as was required by CPR r 21(2) in the case of a “protected party”. The judge in the county court was not asked to approve the settlement, simply to order by consent that judgment be entered for the agreed sum. Some time later doubts emerged as to the claimant’s capacity. The claimant applied for a declaration that she lacked capacity at the time of the purported settlement and for that order to be set aside. The High Court held that the claimant did have capacity to enter into the settlement agreement and dismissed her claim for a declaration. That decision was reversed by the Court of Appeal in Dunhill v BurginM;  CP Rep 29. The claim was referred back to the High Court for case management, the claimant subsequently proceeding by Paul Tasker as litigation friend. On 11 July 2012 Hamblen J gave directions for the trial of the preliminary issue.
CPR r 21(10) provided: “Where a claim is made (a) by or on behalf of a child or protected party; or (b) against a child or protected party, no settlement, compromise or payment (including any voluntary interim payment) and no acceptance of money paid into court shall be valid, so far as it relates to the claim by, on behalf of or against the child or protected party, without the approval of the court”.
BEAN J said that it was significant that CPR r 21(10) applied to claims made “by” as well as “on behalf of” a protected party and that “protected party” was defined by the Rules as a party who “lacks capacity to conduct proceedings”, so that a party who in fact lacked capacity to conduct proceedings was protected even though he or she had not been officially declared to be such and was not acting by a litigation friend. The rule also applied whether or not the party in question was legally represented. Accordingly, the settlement agreement was invalid; the judgment based on it was to be set aside and the substantive claim was to proceed to a trial on the merits.
Appearances: Marc Willems (instructed by Potter Rees, Manchester) for the claimant; James Rowley QC and Matthew Stockwell (instructed by Keoghs, Bolton) for the defendant.
Reported by: Sarah Addenbrooke, Barrister.
© 2012. The Incorporated Council of Law Reporting for England and Wales.