COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR JUSTICE WRIGHT
QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE POTTER
LORD JUSTICE CHADWICK
| Martin Masterman-Lister||Appellant|
|(1) Brutton & Co||Respondents|
Robin De Wilde QC and Nick Brown (instructed by Blake Lapthorn) for Brutton & Co
Richard Methuen QC and Hugh Hamill (instructed by Clarke Willmott & Clarke) for Jewell & Home Counties
Robert Francis QC represented the Official Solicitor as an Interested Party
Hearing dates: 12th, 13th, 14th, 15th and 19th November 2002
Crown Copyright ©
Lord Justice Kennedy:
"Whether the claimant has been a patient within the meaning of RSC Order 80 and/or Part 21 of the CPR at any time since the 8th September 1980 and, if so, what are the period or periods when the claimant has been a patient between the 8th September 1980 to date."
On 29th March 2000 Master Murray ordered the trial of that issue in relation to both of the claimant's actions, and after a lengthy hearing in January and February 2002 the judgment was delivered on 15th March 2002.
RSC Order 80.
"In this Order –
'The Act' means the Mental Health Act 1983;
'Patient' means a person who by reason of mental disorder within the meaning of the Act, is incapable of managing and administering his property and affairs;
'Person under disability' means a person who is an infant or a patient.'"
Before I look more closely at that definition of a patient it is worth noting some of the consequences of being a patient. Rule 2(1) provides –
"A person under disability may not bring, or make a claim in any proceedings except by his next friend ...."
Rule 2(3) provides –
"A next friend or guardian ad litem of a person under disability must act by a solicitor."
Rule 10 provides –
"Where in any proceedings money is claimed by or on behalf of a person under disability, no settlement, compromise, or payment and no acceptance of money paid into court, whenever entered into or made, shall so far as it relates to that person's claim be valid without the approval of the court."
The claimant was an infant when he began his action against Jewell and Home Counties Dairies in December 1980. That disability was recognised and his father agreed to act and did act as next friend, so the proceedings were properly instituted. On 24th July 1981 the claimant reached the age of 18, and on 17th August 1981 he served notice of adoption in relation to his action. At that stage it had not occurred to anyone that the claimant might still be under a disability because he might be a patient for the purposes of Order 80, Rule 1. At no time prior to 1987 did any doctor raise that possibility, although Professor McLellan now says that it was implicit in his reports of October 1984 and September 1997. The claimant's solicitor, Mr Wilks, was an experienced personal injuries lawyer, and the possibility did not occur to him; nor did it occur to Mr Walker, the experienced personal injuries counsel who was instructed, and Mr Langstaff QC, who has appeared for the claimant before us, has made it clear that the lawyers originally instructed are not now being criticised for failing to recognise that the claimant might be a patient. Nonetheless, Mr Langstaff contends, as it was contended by Mrs Cox QC, as she then was, in the court below that at all times from the accident onwards the claimant was a patient who could only litigate or continue to litigate by his next friend, and who could only settle a claim with the approval of the court.
What does the definition mean?
"The functions of the judge under this Part of this Act shall be exercised where, after considering medical evidence, he is satisfied that the person is incapable, by reason of mental disorder, of managing and administering his property and affairs; and a person as to whom the judge is so satisfied is referred to in this Part of this Act as a patient."
Although the Grounds of Appeal begin with the assertion in paragraph 1(a) that the judge erred in law in that he applied the wrong test for capacity, and various criticisms are made of the way in which he formulated the test, it emerged after Mr Langstaff had concluded his submissions as to the law that there is no criticism of the judge's formulation. What is criticised is his application of the law as he found it to be to the evidence in the case. Nevertheless permission to appeal was given by the trial judge because there is an important issue of law involved in relation to which there has been no previous decision of this court, and for that reason we have had the benefit of submissions from Mr Robert Francis QC on behalf of the Official Solicitor, so I do need to look at the legal position with some care.
Capacity at different times and in different contexts
"... if on the day when any right of action accrued for which a period of limitation is prescribed by this Act, the person to whom it accrued was under a disability, the action may be brought at any time before the expiration of six years from the date when he ceased to be under a disability or died (whichever first occurred) notwithstanding that the period of limitation has expired."
Section 38(2) and (3) provide –
"(2) For the purposes of this Act a person shall be treated as under a disability while he is an infant, or of unsound mind.
(3) For the purposes of subsection (2) above a person is of unsound mind if he is a person who, by reason of mental disorder within the meaning of the Mental Health Act 1983, is incapable of managing and administering his property and affairs."
Section 38(4) deals with circumstances when a person is to be conclusively presumed to be of unsound mind, generally speaking when detained in hospital.
" 'Patient' means a person who by reason of mental disorder within the meaning of the Mental Health Act 1983 is incapable of managing and administering his own affairs."
The wording, it will be noted, differs slightly from the wording in Order 80 Rule 1, in that the title of the Act is set out in full, and the words "property and affairs" are replaced by "own affairs". Mr Francis submits that the change may have some significance.
Capacity is important
Business affairs, presumptions and the burden of proof
"It is the right of an English person to require that the free use of his property, and personal freedom, shall not be taken from him on the ground of alleged lunacy, without being allowed the opportunity of establishing his sanity or denying his insanity before a jury as a contesting party, not merely as a subject of inquiry"
Neither Order 80 nor CPR 21.1 seem to meet that requirement, which is underlined by Articles 6 and 8 of the European Convention. In Winterwerp v Netherlands  2 EHRR 387 a Dutch national detained in hospital complained that his detention had divested him of his capacity to administer his property, and thus there had been determination of his civil rights and obligations without the guarantee of a judicial procedure, as laid down in Article 6(1) of the Convention. That complaint was accepted by the European Court of Human Rights, but neither Order 80 nor CPR 21.1 contains any requirement for a judicial determination of the question of whether or not capacity exists. Mr Francis submits, and I accept, that this is a matter which should be considered by the Rules Committee, and meanwhile courts should always, as a matter of practice, at the first convenient opportunity, investigate the question of capacity whenever there is any reason to suspect that it may be absent (e.g. significant head injury) other than in cases where there has already been an order pursuant to section 94(2) of the 1983 Act. That means that, even where the issue does not seem to be contentious, a District Judge who is responsible for case management will almost certainly require the assistance of a medical report before being able to be satisfied that incapacity exists. In this respect, an admission said to have been made by a person alleged to lack capacity cannot be regarded as being of great weight because of his or her alleged incapacity. The judge may consider that he would be assisted by seeing the person alleged to lack capacity, a view expressed by Wright J in this case. In my view it would be wrong to attempt to compel that person to attend, but the judge can always make his view clear, and in most cases that indication, together with a reminder as to the burden of proof, should suffice.
If capacity is in issue how should it be decided?
"The expression 'incapable of managing her own affairs and property' must be construed in a common sense way as a whole. It does not call for proof of complete incapacity. On the other hand, it is not enough to prove that the plaintiff is now substantially less capable of managing her own affairs and property than she would have been had the accident not occurred. I have no doubt that the plaintiff is quite incapable of managing unaided a large sum of money such as the sort of sum that would be appropriate compensation for her injuries. That, however, is not conclusive. Few people have the capacity to manage all their affairs unaided. ... It may be that she would have chosen, and would choose now, not to take advice, but that is not the question. The question is: is she capable of doing so? To have that capacity she requires first the insight and understanding of the fact that she has a problem in respect of which she needs advice ... Secondly, having identified the problem, it will be necessary for her to seek an appropriate adviser and to instruct him with sufficient clarity to enable him to understand the problem and to advise her appropriately. ... Finally, she needs sufficient mental capacity to understand and to make decisions based upon, or otherwise give effect to, such advice as she may receive."
So the whole test was related to the individual plaintiff and her immediate problems. That was the approach adopted by Wright J in the present case, and before us everyone has accepted it to be the right approach. Mr Francis submits that the change in the wording from Order 80 to CPR 21.1 emphasises the need to focus on the litigation under consideration rather than the whole of the claimant's business affairs and, although it could be argued that a different approach has to be taken in relation to section 28(1) of the Limitation Act, the words used relate the disability to the specific right of action.
"The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration or a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in relation to the donor's other assets a low degree of understanding will suffice. But, at the other extreme, if its effect is to dispose of the donor's only asset of value and thus, for practical purposes, to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all of the potential donees and the extent of the property to be disposed of."
"For the patient offered amputation to save life, there are three stages to the decision (1) to take in and retain treatment information, (2) to believe it and (3) to weigh that information, balancing risks and needs."
"A person lacks capacity if some impairment or disturbance of mental functioning renders the person unable to make a decision whether to consent to or refuse treatment. That inability to make a decision will occur when:
(a) The patient is unable to comprehend and retain the information which is material to the decision, especially as to the likely consequences of having or not having the treatment in question;
(b) The patient is unable to use the information and weigh it in the balance as part of the process of arriving at the decision ..."
Causation and other matters
When should the issue of capacity be raised?
"Any step taken before a child or patient has a litigation friend shall be of no effect, unless the court otherwise orders."
The Facts – criticisms
(1) The Judge failed to have sufficient regard to and failed to address the agreed consequences of the serious head injury, namely serious memory deficit, dysexecutive syndrome and pain. The medical evidence, it is said, was not properly analysed.
(2) The Judge failed to focus on the ability of the claimant to make decisions at the relevant time, and instead looked at outcomes, at decisions made with the benefit of close parental support.
(3) The Judge failed to distinguish between, on the one hand the acknowledged ability of the claimant to deal with lesser problems such as handling relatively small sums of money, and on the other hand his contested ability to make appropriate decisions in relation to, for example, large sums.
(4) The Judge failed to give sufficient weight not only to the claimant's medical witnesses but also to his lay witnesses, namely his parents, Mr Vetterlein and Mr Chidgey.
(5) The Judge gave too much weight to the claimant's diaries and too little weight to other evidence indicative of impaired decision making capacity."
In order to evaluate these criticisms it is necessary to look first at what was common ground, the outline history, and the extent to which the experts disagreed before turning to look at the evidence and the Judge's evaluation.
Common Ground and Medical reports
(1) Dr Rose and Dr Jacobson
"Dr Jacobson considers that the claimant regained capacity because the aggravating effects of depression on cognitive functions lessened as his depression improved. Dr Jacobson notes that the bulk of cognitive recovery after brain injury occurs in the first two years, with small diminishing degrees of further recovery in year three, and the time point of regaining capacity at up to three years is marked by resolution of depression and reaching a plateau of cognitive recovery.
Dr Rose does not accept that the claimant regained capacity. Neither does he believe that before 1984 capacity was caused by fluctuating moods. He believes that Mr Masterman-Lister's cognitive abilities will always have been significantly effected to the point of rendering him a patient within the meaning of the 1983 Mental Health Act, and that the fluctuating mood will have simply added to the level of incapacity."
The report then goes on to deal with the significance of the claimant's diaries and other evidence in relation to the claimant's life since 1980, about which the doctors were not agreed.
(2) Dr Moffatt and Dr Roberts
They agreed that –
"He sustained a severe brain injury in a road accident on 9th September 1980 due to concussion and anoxic brain damage or both. He has been left with little in the way of physical disabilities or impairment of his general intellectual functions as a result, but has remained with an unreliable memory, his abilities to organise his life and affairs are affected, and his personality changed.
The tests carried out earlier after the head injury and more recently by four neuro-psychologists have all confirmed a memory impairment without evidence of general intellectual deterioration. All three neuro-psychologists who have tested him recently have found some impairment of functions generally accepted to be subserved by the frontal lobes of the brain."
They disagreed 'about the extent to which the brain injury has affected his ability to manage his affairs since the accident.' Again there was consideration of the diaries, and the evidence from other sources.
(3) Dr Leng and Dr Powell
After expressing similar views as to the head injury and its effects their joint report states –
"We agree that his neuro psychological test performance is not so bad that the results speak for themselves and utterly rule out his having capacity.
Conversely his neuro psychological test performance is not so preserved that it can be taken for granted that he has capacity.
Rather, the neuro psychological test results should be seen as one strand of evidence, certainly raising the issue of capacity but needing to be considered in conjunction with all other sources of evidence.
In other words, at this level of deficit of test performance, some patients will have capacity, and some will not, depending on the entirety of evidence and on the precise circumstances.
We fully understand that ultimately it is a decision for the court as to whether he is capable of managing his own affairs, but we have formed our own view of all the material and Dr Leng leans to the view that he does have capacity and Dr Powell leans to the view that he does not.
In brief, Dr Leng feels that the diary entries and letters seem to demonstrate sufficent capacity to manage his own affairs, and that there is no reason to suppose that he was not also so capable at the time of accepting the offer of settlement (i.e. by the time the settlement was accepted his recovery had long since plateaued). On the other hand, Dr Powell feels that the diaries were not compiled with the intent of collecting evidence on capacity, but even so, the diaries and letters do yield evidence of rigidity of thinking, poor judgment, immaturity, cognitive deficit and vulnerability, which when taken in conjunction with the deficit of mind evident on tests, indicates that he needs the Court of Protection to safeguard his interests."
The Medical evidence at Trial
"It is not my view that this makes him incapable of understanding and managing his life otherwise without supervision. The question is clearly one of degree, which is not appropriately assessed by judging everyone with some impairment of frontal lobe function as incapable of managing their affairs."
"Needs supervision in managing any large sum of money. Therefore, by definition, he was incapable of deciding for himself whether the offer he was made in settlement of his claim was fair or not."
That, as Mr Langstaff concedes, is a total non-sequitur.
"I suppose really at the end of the day the distinction is..... Dr Roberts seems to suggest that a form of benign paternalism is easily sufficient to support this man and ... I would plump for the more Draconian approach."
Non-Medical evidence at Trial
"(1) On 1st November 1987, soon after his claim was settled, the claimant wrote in his diary that he would give every single penny he had away to be able to go out with a girl with whom he was then infatuated.
(2) On 29th December 1987 the claimant took a different girl to a shop and bought her a music centre. We were told that it cost £336.70.
(3) On 25th April 1989 the claimant recorded receiving a very troubling letter from the Vegan Society which was in financial difficulty. He went to the building society where his money was invested, and drew £500, £125 for a life membership and £375 as a donation.
(4) On 25th September 1990 the claimant was interviewed at Lymington Police Station after taking part in an anti-hunt demonstration during the course of which a van had been burnt. Part of the police record of the interview reads –
'He tried to explain that the two girls had nothing to do with the arson but were unfortunate in that they happened to be with him. He offered to pay all of any subsequent claim for compensation.'
It was submitted to us that his offer was indicative of financial irresponsibility. It could, of course, have been a very sensible and responsible attempt to avert a prosecution.
(5) In a letter to a friend written in July 1994 the claimant explained how he had caused trouble at a site office of some builders. The police had to be called and the claimant told the duty sergeant that his brother-in-law was a London solicitor and that he had numerous dealing with legal matters before. Whatever view one takes of the conduct as recorded it is difficult to see how it can be said to demonstrate any lack of capacity.
(6) In another letter written in December 1994 the claimant describes breaking the release valve of a pressure cooker, and going to buy a replacement. He lost it on the way home and got another one next day. He then found the one that he had lost, and found a spare one at home.
(7) On 28th April 1996 in another letter the claimant records being criticised by a girl friend because he had overstocked his freezer with some items (i.e. vol-au-vent cases and vegan sausages). Plainly he was not keeping proper control of the contents of his freezer, as he acknowledged.
The Judge's approach.
"The dysexecutive syndrome itself involves changes in personality such as obsessionality, immaturity, rigidity of thinking, eccentricity and emotional outbursts. The effect of this syndrome is to impair his ability to organise his life and to plan many of his everyday functions. On the other hand, it is again accepted on all sides that the nature of the damage to Martin's brain is such that his pre-accident level of intelligence is very largely preserved. It is further agreed that Martin's condition has remained essentially unchanged since about 1983."
"Dr Powell adds that when these deficits are coupled with self-centred thinking and a rigidity of approach his relationships with other people and with the problems of life 'don't mesh'. I have to observe, however, that not all these matters will engage, even directly, with business and similar matters."
"Having spent many days reviewing the diaries and the letters I am satisfied that this material taken in conjunction with the other evidence as to how Martin has functioned over the past twenty years is of very considerable assistance to me in reviewing the opinions expressed by the doctors and in assessing to what extent their differing views have been justifed in practice."
After that the judge looked at the medical evidence obtained in relation to the original action, and the evidence of Professor McLellan, before turning to look at non-medical evidence.
"Martin would very probably have accepted the offer of investment advice that Mr Wilks had made to him, and failing him, would probably have consulted his bank manager."
The Judge examined the evidence as to how the claimant managed his bank account, and his credit card, and noted no change for the worse when the claimant left home and moved into his own house.
"The evidence of the last 20 years enables me to arrive with confidence at certain conclusions. So far as the ordinary incidents of life are concerned such as feeding and caring for himself and the ordinary incidents of day to day living, Martin is perfectly capable of looking after himself with a minimum of outside assistance. When greater problems present themselves he is able to recognise that such problems exist, and his reasoning faculties enable him to deal with a good many of them himself. Where more formidable problems arise he recognises that they exist, is able to recognise that he needs external advice to deal with them and is able to go to appropriate sources for such advice – generally his mother and father, but his sources are by no means limited to them.... While the mental disorders identified by the various medical reports in the present proceedings are of such a nature that, if present to a sufficiently severe degree, are undoubtedly capable of rendering a sufferer incapable of managing his property and affairs, the conclusion that I have come to on all the evidence before me is that the degree and extent to which Martin suffers from such disabilities falls far short of that standard."
Lord Justice Potter:
Lord Justice Chadwick:
". . . the mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained."
The same test was applied by this Court in In the estate of Park, decd  P 112. At page 127 Lord Justice Singleton said this:
"Was the deceased on the morning of May 30, 1949, capable of understanding the nature of the contract into which he was entering, or was his mental condition such that he was incapable of understanding it? To understand the nature of the contract of marriage a man must be mentally capable of appreciating that it involves the responsibilities normally attaching to marriage. Without that degree of mentality, it cannot be said that he understands the nature of the contract."
". . . the question to be decided is whether it has been established that C's capacity is so reduced by his chronic mental illness that he does not sufficiently understand the nature, purpose and effects of the proffered amputation."
". . .there is no logical reason why, though unable to exercise her powers, [the donor] could not confer them upon someone else by an appropriate juristic act. The validity of that act depends on whether she understood its nature and effect and not on whether she would hypothetically have been able to perform all the acts which it authorised."
But he went on to consider what was meant by understanding the nature and effect of the power. He said this, at page 316D-F:
"I do not think that it would be sufficient if he realised only that it gave Cousin William power to look after his property. Mr Rawson [counsel instructed by the Official Solicitor] helpfully summarised the matters which the donor should have understood in order that he can be said to have understood the nature and effect of the power. First (if such be the terms of the power) that the attorney will be able to assume complete authority over the donor's affairs. Secondly (if such be the terms of the power) that the attorney will in general be able to do anything with the donor's property which he himself could have done. Thirdly, that the authority will continue if the donor should be or become mentally incapable. Fourthly, that if he should be or become mentally incapable, the power will be irrevocable without confirmation by the court. I do not wish to prescribe another form of words in competition with the explanatory notes prescribed by the Lord Chancellor, but I accept Mr Rawson's summary as a statement of the matters which should ordinarily be explained to the donor (whatever the precise language which may be used) and which the evidence should show he has understood."
"The law of the Court of Chancery undoubtedly is that in certain cases where there is a person of unsound mind, not so found by inquisition, and therefore incapable of invoking the protection of the Court, that protection may in proper cases, and if and so far as may be necessary and proper, be invoked by any person as his next friend. . . . It is not by reason of the incompetency, but notwithstanding the incompetency, that the Court of Chancery entertains the proceedings."
"Although his general capacity is impaired by schizophrenia, it has not been established that he does not sufficiently understand the nature, purpose and effects of the treatment he refuses. Indeed, I am satisfied that he has understood and retained the relevant treatment information, that in his own way he believes it, and that in the same fashion he has arrived at a clear choice."
Nevertheless, it was never in doubt that C was a patient for the purposes of the procedural rule which required that his suit could not have been brought except with the interposition of a next friend. There is no inconsistency between the requirement that a party to legal proceedings comply with RSC Order 80 and a decision that he has an understanding of the nature, purpose and effects of the medical treatment which is under consideration in those proceedings. The test is issue specific; and, when applied to different issues, it may yield different answers.
"After a time he was to some extent able to appreciate (from being told by others) something of what had happened to him, and indeed to his scooter. But he could not concentrate on it for any length of time: not long enough to be able to appreciate the nature and extent of any claim that he might have. In particular he had no insight at all into his own mental state. He was not capable of instructing a solicitor properly. He certainly was not capable of exercising any reasonable judgment upon a possible settlement."
The features which the Master of the Rolls identified in that passage are features which, as it seems to me, would lead, plainly, to a conclusion that the claimant was a person under a disability for the purposes of RSC Order 80.