COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM KINGSTON upon HULL COUNTY COURT
District Judge Glentworth
His Honour Judge Hepple QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE JONATHAN PARKER
LORD JUSTICE THOMAS
| KERRY ANNE DRINKALL
(A Minor who sues by her Mother & Litigation Friend)
|- and -
|DEAN HARRY WHITWOOD
Adam Korn Esq (instructed by Messrs Stamp Jackson & Proctor) for the Respondent
Hearing date: 29th October 2003
Crown Copyright ©
Lord Justice Simon Brown:
"The parties were unable to enter a binding settlement whether as alleged or at all without the approval of the court, which approval was not sought or given. In the premises no binding agreement has been reached."
"21.10(1) Where a claim is made (a) by or on behalf of a child … no settlement, compromise or payment and no acceptance of money paid into court shall be valid, so far as it relates to the claim by [or] on behalf of … the child, without the approval of the court.
(a) before proceedings in which a claim is made by or on behalf of [a] child … (whether alone or with any other person) are begun, an agreement is reached for the settlement of the claim; and
(b) the sole purpose of proceedings on that claim is to obtain the approval of the court to a settlement or compromise of the claim, the claim must:
(i) be made using the procedure set out in Part 8 (alternative procedure for claims); and
(ii) include a request to the court for approval of the settlement or compromise."
"In effect, what the defendant is seeking to do is to use the protection given to minors to resile from an agreement which was reached between the claimant, through her litigation friend, and the defendant."
"In my judgment, there is a binding agreement which has been reached between the parties which requires the court's approval at the appropriate time."
She ordered that judgment on liability be entered for the claimant as to 80% of the claim for an amount to be decided by the court.
"23. In my judgment, the provision of Part 21.10 applies to a claim which is made in proceedings, not an entitlement to a claim made before proceedings are begun. In my judgment, so much is clear from the introductory words of paragraph 2 which read:
'Where (a) before proceedings in which a claim is made' (my emphasis).
24. There is, in my judgment, for the purposes of Part 21, no claim in existence before proceedings bringing such claim are commenced. The Civil Procedure Rules do not, in my judgment, bite on settlements reached before proceedings are commenced, unless one or other party wants them to by proceeding under Part 8 for court approval, pursuant to CPR 21.10(2).
26. During the course of the appeal my attention was drawn to the notes in the Civil Procedure text … relating to Part 21.10, part of which reads as follows:
'Agreements for the settlement of claims involving children and patients may be reached before proceedings are begun. In these circumstances it will be necessary to obtain the court's approval of the settlement or compromise.'
27. In my judgment, insofar as it suggests that obtaining the court's approval of the settlement or compromise is mandatory, the note is wrong. 'Valid' for the purposes of Part 21 relates to settlements after proceedings have begun and not ones reached before proceedings are issued. So much is clear, in my judgment, from rule 2 which makes, as I have sought to indicate, special provision for the bringing of proceedings solely for the purposes of getting the court's approval.
28. Part 21.10 is, in my judgment, procedural, and applies only to agreements reached within court proceedings or to proceedings voluntarily brought to obtain approval. It does not affect the substantive law of contract involved infants."
"RSC, Ord 80, r11: 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 … shall … be valid without the approval of the court.
RSC Ord 80, r12: (1) Where, before proceedings in which a claim for money is made by or on behalf of a person under disability (whether alone or in conjunction with any other person) are begun and an agreement is reached for the settlement of the claim, and it is desired to obtain the court's approval to the settlement … the claim may be made in proceedings begun by originating summons and in the summons an application may also be made for (a) the approval of the court to the settlement …."
"In my view, there was no binding agreement made in August. [p182] … If in the present case a writ had first been issued and if thereafter there had been discussions leading to agreement, such agreement would have lacked validity unless and until the approval of the court was given. This is made clear by RSC Ord 80, r11 … The present case came within the provisions of Order 11, r12 … When … the originating summons was taken out it made a 'claim' on behalf of a person under disability (ie the infant … [T]he agreement 'for the settlement of the claim' would depend for its validity upon obtaining approval of the court. [p183] … If the court's approval were given, a binding agreement would result upon the basis of which certain directions could be given by the court. [p184]."
"There was a suggestion made in the course of the argument that the Compromise Rule, if it meant what it appears to say - if 'invalid' means 'of no legal effect' - is ultra vires. I do not accept that suggestion. When the claim of an infant or other person under disability is before the court, the court needs, for the purpose of protecting his interest, full control over any settlement compromising his claim. In my view, the making and re-making of the Compromise Rule were valid exercises of the rule-making power under the Judicature Acts, which is now contained in section 99 of the Act of 1925 [p189] … The compromise rule is the vital one here. … The settlement, so far as it related to the £9,250, in which the infant was interested, was only a proposed settlement until the court approved it. Either party could lawfully have repudiated it at any time before the court approved it. It had no validity by virtue of the parties' agreement in the August settlement. That which might have given it validity would have been an order made by the master with the effective consent of the parties … [p190]."
i) It may well be, as Mr Korn for the respondents suggests, that those acting for child claimants in future will on occasion think it prudent to issue proceedings (presumably under Part 7 rather than Part 8) to obtain the court's approval for any partial settlement of the claim lest, as here, the defendant otherwise seeks to repudiate it. The need for this appears not hitherto to have been appreciated. Dietz itself, of course, was concerned with a final settlement agreement and the impact of the decision on partial settlements may not have been apparent even to those acquainted with the case.
ii) Mr Korn further submitted that a consequence of applying Dietz is that Part 21.10, a rule designed for the protection of vulnerable people (children and patients), becomes instead a loophole to be exploited against them. Had the liability agreement reached here in April 2000 been between adults it would, of course, have been enforceable. Mr Korn submits that the Rules could and should provide, consistently with the general law concerning minors, that settlement agreements prior to court approval are voidable at the option of the child (not, as was held in Dietz open to repudiation by either party). That said, a Compromise Rule materially the same form as Part 21.10(1) has stood now for many years and opportunities to change it have not been taken. Whether it should now be altered must be for consideration by others. Meantime it is clearly desirable that Dietz (and perhaps also this case which illustrates Dietz's inescapable application to partial settlements too) be brought more clearly to the profession's attention. Most suprisingly it is not referred to either in the White Book or the Green Book.
iii) Once a child claimant reaches adulthood, a settlement agreement which until then, on the authority of Dietz, has been invalid, can, it seems to me, unless and until repudiated, be treated as an offer and accepted by either side.
iv) The doctrine of estoppel (in one form or another) may perhaps be available to a party who has acted to his detriment in reliance on a settlement agreement which the other party then seeks to repudiate. No such argument, however, was addressed to us on the present appeal (indeed, the point having surfaced in one of the respondent's skeleton arguments was later expressly abandoned). This, therefore, is no occasion to explore its possibilities.
Lord Justice Jonathan Parker:
Lord Justice Thomas: