England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
HIS HONOUR JUDGE WOOD, QC
BM209162

		Royal Courts of Justice Strand, London, WC2A 2LL
		6th April 2006

Lord Justice Pill :

1. This is an appeal by Robert Anthony John Folks, now aged 37, against a decision of His Honour Judge Wood QC, sitting as a Deputy High Court Judge, on 10 January, that an application for the appointment of a litigation friend for the appellant be adjourned to a date to be fixed for the trial of a preliminary issue as to whether the facts justify the appointment of a litigation friend. The judge subsequently fixed the date of that trial for 13 March 2006, a trial date for the action having been fixed for 10 July 2006.
2. The appellant claims damages from the respondent Gary Faizey arising out of a road traffic accident on 12 March 2000 in which he sustained a very severe head injury. Following the issue of proceedings in June 2002, the parties compromised the issue of liability on the basis that the defendant would pay 79% of the sum at which damages were subsequently to be assessed. The appellant has now been accepted as a patient by the Court of Protection and a receiver has been appointed.
3. Concern had arisen about the ability of the appellant to manage his own affairs and a medical certificate was submitted to the Court of Protection by Mr J Wasserberg, consultant neurosurgeon, on 6 February 2005. Mr Wasserberg diagnosed a severe head injury with evidence of brain damage. He noted that the appellant has "great difficulty in managing his own affairs". There had been a good physical recovery but marked effects on personality, mood and memory. Mr Wasserberg stated:

"Evidence from neuropsychology testing, witness statements of family members and my own assessment confirm that he is not capable of managing his own financial affairs. He agrees with this and has told me that he does not object to this process … [involving the Court of Protection]. He admits himself that he cannot cope with his own affairs. He has good insight into this. He is not against having a trustee appointed…"

4. Steps were then taken by the appellant's solicitor, Mr P D Edwards, to have a litigation friend appointed for the appellant. The appellant's sister, Mrs J Rumney, agreed to act and signed an appropriate certificate of suitability.
5. CPR Rule 21.2(1) provides: "A patient must have a litigation friend to conduct proceedings on his behalf". CPR 21.1(2)(b) provides: "'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 property and affairs". Mental disorder is defined in Section 1(2) of the Mental Health Act 1983 ("the 1983 Act") as meaning "mental illness, arrested or incomplete development of mind, psychopathic disorder and any other disorder or disability of mind".
6. CPR 21.3(4) provides: "Any step taken before a child or patient has a litigation friend shall be of no effect unless the court orders otherwise". CPR 21.6(1) empowers the court to make an order appointing a litigation friend. An application for such an order may be made, under CPR 21.6(2)(b) by 'a party'. CPR 21.6(4) provides: "An application for an order appointing a litigation friend must be supported by evidence". CPR 21.10(1) provides: "Where a claim is made by or on behalf of a … patient … 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, on behalf of the … patient, without the approval of the court".
7. The application was supported by the certificate of Mr Wasserberg and a long and detailed statement from Mrs Rumney describing the appellant's behaviour. She clearly sees a great deal of him in the context of the family and her description of his considerable problems shows every sign of being conscientious and perceptive. The application was also supported by evidence from Dr B D M Scheepers, consultant neuropsychiatrist, who stated in his report of 2 November 2005: "In my opinion, he [the appellant] requires a Litigation Friend to conduct the litigation on his behalf".
8. A district judge ordered a joint report of neuropsychiatrists in the event of disagreement between neuropsychiatrists. The respondent instructed Dr R R Jacobson, also a consultant neuropsychiatrist. The doctors' joint report is dated December 2005. Under the heading "Medical Condition", the doctors stated:

"2.1 The Experts agree that the nature of the head injury sustained by the Claimant was Very Severe.

2.2 The Experts agree that the Claimant developed changes in his personality as a consequence of his brain injury. They agree that Mr Folks' persisting behavioural abnormalities include impulsivity, periodic disorganisation, reduced insight and empathy, rigidity, eccentricity, sensitivity to criticism, mild phobic anxiety, emotional lability, periodic suspicion, tendency to be rude and tactless, and marked mood swings. The experts agree that Mr Folks developed organic personality changes but differ in their views on its severity."

9. Under the heading "Capacity", the doctors stated:

"6.1 Dr Scheepers considers that the Claimant currently does not have the insight and understanding to realise when he has a problem in respect of which he may need advice in relation to the litigation or in relation to the management of any damages that may be awarded.

6.2 The Experts agree that the Claimant is incapable of managing and administering his own affairs by reason of mental disorder and should be regarded as a patient within the meaning of the Mental Health Act 1983.

6.3 In Dr Jacobson's opinion the issue of capacity is more complex, because concerns were not raised by Dr Priestley in 2001 and 2002, there is no information which might shed light on his fiscal capacity while he was working at DHL, and there is no reference to impulsive spending in the 2000 – mid 2003 medical records. He considers that Mr Folks has probably lacked the capacity to manage his property and affairs since leaving DHL, by reason of mental disorder (Organic Bipolar Disorder) and alcohol abuse, but that he will probably regain capacity in about two years, when his Bipolar Disorder improves on mood stabilisers. Capacity should then be re-assessed. Dr Jacobson considers that Mr Folks probably has the capacity to litigate.

6.4 Dr Scheepers has no difficulty with reassessment in the future, but is less optimistic regarding prognosis since in his opinion the Claimant's impulsivity is part of his organic personality disorder rather than a bipolar affective disorder."

10. Having regard to the provisions of CPR Rule 21.1(2)(b) and rule 21.1(1), Dr Jacobson's acceptance that the appellant should be regarded as a 'patient', within the meaning of the 1983 Act, might appear to conclude the matter in the appellant's favour. Mr Matthews for the respondent, points out, however, by reference to sections 94(2) and 145 of the 1983 Act that the definition of patient appears in Part VII of the Act in a Court of Protection context. That leaves open the possibility of a subtle distinction between a person with a mental disorder who does not have the capacity to manage his own affairs but does have the capacity to litigate.
11. On enquiry during the hearing as to the origin of the opinion that "Mr Folks probably has the capacity to litigate", Mr Matthews referred to a 70 page, 251 paragraph report prepared by Dr Jacobson dated 29 October 2005. Dr Jacobson accepted, at paragraph 244, that "If [the appellant] were to receive a large sum of compensation he probably would seek help" and, at paragraph 247, that he exhibits "impulsive excessive spending." Dr Jacobson's opinion on probability of capacity to litigate was based on findings at paragraphs 189 and 190 of his report and particularly, it seems, because no opinions are expressed in paragraph 189, on paragraph 190:

"190. I put to him two scenarios. In the first, I suggested that he is a gardener at a school near his house. He earns £5 per hour, works from 9am to 1pm, Monday – Friday, was supposed to go to work today but does not feel like going because it is raining. He now has to make a choice. In the second, I suggested that he has a car which is making strange noises. He does not know much about how cars work, but takes it to a garage. A mechanic at the garage tells him that the car is quite old, has several big problems, will cost £350 to repair, but the car will probably only last for another year anyway. The mechanic offers to buy the car for £500, even though he says it is only worth £450. Last week, his sister told him that she thought the car was worth at least £800. He now has to make a choice. With regard to these two vignettes, I asked him to identify what the choice must be. I sought his understanding of the choices by asking what he could choose to do, is there anything else he could choose to do, what are the advantages and problems of making a choice in one or the other direction. I asked him what he would do and why. I asked him who the choice would affect. He gave good answers, showing ability to identify choices, understand the nature of the choice, give the reasoning behind the choice and appreciation of how the choice would affect him."

12. In adjouring the application for an order appointing a litigation friend, the judge purported to follow the judgment of Kennedy LJ in Masterman–Lister v Brutton & Co (Nos 1 and 2) [2003] 1 WLR 1511. The judge stated:

"5. Frankly, I have to say that I am persuaded by the defendants that I should follow the judgment of Kennedy LJ. I should conclude that the final conclusion as to capacity rests with the court, and that I need medical evidence to guide me. The good medical evidence of Dr Jacobson really does support his view that the claimant has capacity to litigate, and I am unable to find against that, that the claimant does not have such capacity without hearing from Dr Scheepers who may hold a different, and as I would put it more pessimistic view about his capacity.

6. Therefore my conclusion is that it is not appropriate for me to order that a litigation friend should be appointed, even on the provisional or without prejudice basis which I discussed at the beginning of this judgment. I should say that I have taken into account the disadvantage of the need for there to be a further hearing which would take probably about a day and in which these experts would attend. That does add to the overall costs and it could possibly delay the conduct of the case, but I am persuaded by counsel for the defendant that that is a proportionate as it were disadvantage to set against the need to comply with the requirement, as I see it, that I should work on the basis of medical evidence before I say that a litigation friend should be appointed.

7. That is the conclusion of the judgment."

(While it did not emerge clearly from the joint statement, there is no doubt that Dr Scheepers was of the opinion that the appellant required a litigation friend.)

13. For the appellant, Mr Anderson submits that the preliminary issue would be likely to last more than a day. In addition to medical evidence, it would, understandably in my view, be proposed to call lay evidence of the appellant's health and behaviour.
14. When asked, at the hearing of the appeal, why the respondent was opposing the appointment, a point also raised before the judge, Mr Matthews made several submissions. The first was that, on the appointment of a litigation friend, an attempt might be made to disturb the agreed findings on liability. Mr Matthews conceded that the risk of that is slight. The second reason was that, until the issue directed by the judge is resolved, the defendant (or more likely his insurers) do not know whether or not to settle the claim. They cannot settle while the question of litigation capacity is "up in the air". In my view that is a bad point; upon the appointment of a litigation friend the respondent would know precisely where he was. The third reason given was that if the appellant becomes a patient for present purposes, it will be more difficult to criticise him for any failure on his part to agree to medical treatment. I see little merit in that submission; the appellant is already a patient for other purposes under the 1983 Act and the judge will, in any event, have had every opportunity to assess the reasonableness of any such refusal by the appellant, and rule accordingly.
15. It is possible, though not stated expressly, that those paying the bill may be concerned that a judge may make a more generous award to a person acknowledged to need a litigation friend. If that is a concern felt, and I make no finding as to whether it is, that shows an unjustified lack of confidence in judges who deal with claims such as this one. Moreover, the respondent, by his medical evidence, accepts that the appellant is incapable of managing and administering his own affairs by reason of mental disorder. I find it difficult to contemplate that, in awarding damages, a judge is likely to be more generous to a claimant incapable of managing and administering his own affairs because he also had a litigation friend.
16. In Masterman-Lister, the issue was whether a court could regularise the position retrospectively where the issue of capacity had arisen when a decisive step had already been taken. A claim had been compromised before a litigation friend had been appointed and the claimant sued the solicitors who had compromised the claim. It was held that the claimant had had full capacity when the first action was compromised, notwithstanding that he would not have had the mental capacity to manage and administer a large award of damages. The court could regularise the position retrospectively provided everyone had acted in good faith and that there had been no manifest disadvantage to the party subsequently found to have been a patient at the material time (per Kennedy LJ at paragraph 31). It was in that context that Kennedy LJ referred to the importance of the issue – specific nature of the test of capacity and stated at paragraph 29, that a decision as to capacity in one context did not bind a court which has to consider the same issue in a different context. The final decision as to capacity rested with the court but "in almost every case, the court will need medical evidence to guide it".
17. At paragraph 31, Kennedy LJ gave further guidance:

"In the context of litigation, rules as to capacity are designed to ensure that plaintiffs and defendants who would otherwise be at a disadvantage are properly protected, and in some cases that parties to litigation are not pestered by other parties who should be to some extent restrained. However, finality in litigation is also important, and the rules as to capacity are not designed to provide a vehicle for reopening litigation which, having apparently been properly conducted (whatever the wisdom of the individual decisions in relation to it), has for long been understood to be at an end."

18. I respectfully agree with that approach to the rules. The distinction between capacity to litigate and capacity to manage affairs was in Masterman-Lister an important issue in the action against the former solicitor. Consideration also had to be given to the question whether the court should regularise an act retrospectively. I am very confident that Kennedy LJ was not seeking to promote or encourage routine satellite litigation to determine the issue. In this case, the application to appoint a litigation friend had been made in good faith by a solicitor mindful of his responsibilities. It was supported by a close member of the appellant's family, by the appellant himself and by responsible medical evidence, which was sufficient guidance.
19. The application is made to protect the position of the appellant and those advising him. The rules as to capacity are not designed to create additional litigation, the result of which will have a minimal effect on the main action. Chadwick LJ, at paragraph 66 of Masterman-Lister, when considering the former RSC Order 80, Rule 3(2), stated:

"The rule making body plainly contemplated, and intended, that the question whether a party was required to act through a next friend or guardian ad litem (as the case might be) should, in the ordinary case, be determined by the party himself or by those caring for him; perhaps with the advice of a solicitor but without the need for enquiry by the court."

20. In this case, those advising the respondent, without any plausible reason in terms of protecting the respondent's own position, have sought to interfere in a procedure with which they were only minimally concerned. Indeed, the appointment of a litigation friend would give them protection to them as well as to the appellant and his advisors. I should not wish to describe the opposition as an abuse of the process of the court but in my judgment it is an intermeddling, for no sound reason, which the judge, on the evidence available, ought not to have tolerated.
21. The CPR have "the overriding objective of enabling the court to deal with cases justly" (CPR 1.1(1)). That includes, under 1.1(2), saving expense, ensuring that a case is dealt with expeditiously and fairly, and having regard to the court's resources. The present attempt by the respondent's advisors to achieve what is likely to have been a two day hearing, with specialist medical evidence, to resolve an issue of minimal importance to the outcome of the litigation, and where an application had been made with good reason and supported by responsible evidence, was fundamentally at odds with that overriding objective. The requirement, perceived by the judge, to work on the basis of medical evidence, did not in present circumstances require full enquiry into the distinction between capacity to litigate and capacity to manage affairs. There may be cases in which issues arising from that distinction need to be resolved. This case, for present purposes an ordinary case, was not one of them.
22. In Bailey (by his sister and litigation friend Janet Ashton) v Warren [2006] EWCA Civ 51), long detailed judgments were delivered in this court. It may have been another case in which subtle distinctions needed to be drawn. Neither counsel suggests that the judgments affect the outcome of the present appeal. While I agree with the statement of Arden LJ, at paragraph 110, that the decision in Masterman-Lister was "a landmark decision in the field of mental capacity", Kennedy LJ would probably have been dismayed at the use sought to be made in present circumstances of his practical approach and guidance. His concern was to protect persons who may be under disability and also those who assist them in litigation. It was not to create unnecessary and costly satellite litigation, which in my view this has become.
23. Because of the imminence of the trial on the preliminary issue, the court, having deliberated, told the parties on the day following the hearing of the appeal, that the appeal was allowed. It is for the reasons now stated that I came to the conclusion that it should be allowed.

Lord Justice Keene:

24. I agree entirely with the judgment of Pill LJ. I wish merely to add a few comments of my own.
25. I quite accept that, under the terms of CPR 21.6(4) set out in paragraph 6 of Pill LJ's judgment, there has to be evidence to support any application for an order appointing a litigation friend. That is necessary if the court is to be more than merely a rubber stamp. It does not follow from that that the other party to the litigation is then entitled to put in evidence disputing the basis for such an order.
26. There may, of course, sometimes be cases where the proposed "patient" disputes the need for and appropriateness of the appointment of a litigation friend. In such a situation there can be an issue to be tried, as happened in Fry v. Fry [1890] 15 PD 50. But that was not the present case: there was no dispute between the claimant and the proposed litigation friend. I can also see that there could sometimes at other stages in proceedings be issues where the other party to the litigation may have a legitimate interest: for example, as to whether the litigant should be accepted as a "patient" for Court of |Protection purposes. There are often costs which arise from the involvement of the Court of Protection and the other party may be entitled to be heard on such an issue. But that too is not this case. I can see no basis on which it can properly be contended that the defendant to this claim was at risk of suffering any prejudice from the appointment of a litigation friend; the reverse is in fact the case. It provides him with a degree of protection.
27. Consequently I conclude that in the situation where the proposed "patient" and the litigation friend both consent to the appointment of the latter, where there is adequate evidence to support the application for an order appointing a litigation friend, and where there is no evidence suggesting that the application is anything but a bona fide one, the court should make the order sought. That was the case here. I too therefore came to the conclusion that this appeal should be allowed.

Lord Justice Wilson :

28. In the end I find myself in agreement with both the above judgments.
29. At the outset of the hearing I was doubtful about the merits of the appeal for the following reasons:

(a) the decision under appeal to adjourn the appellant's application for its further consideration upon oral evidence rather than to accede to it there and then was a case management decision in relation to which the learned circuit judge had a discretion;

(b) if a wrong turn had been taken in allowing the respondent to participate in the enquiry as to whether the appellant had litigation capacity, it had been taken at a hearing on 16 September 2005 when, ultimately by consent, a district judge had granted each party permission to file a report on the issue by a separate consultant neuropsychiatrist; the circuit judge's order might seem to be only a logical extension of that direction;

(c) in that, by whatever route, the judge had before him an opinion by Dr Jacobson that the appellant probably had the capacity to litigate, it was hard to castigate as plainly wrong his conclusion that the opinion had to be probed before a litigation friend was appointed; and

(d) the appellant had put forward both to the judge and to this court a seemingly unattractive argument that the appointment of a litigation friend could be expressed to be without prejudice to the respondent's contention that it was inappropriate.

30. During the hearing, however, it became clear, for the reasons given by my Lords, that the respondent could not establish that he was likely to suffer adverse effect from the appointment of a litigation friend to assume conduct of the proceedings on the appellant's behalf. This helped me to arrive at my present view, namely that:

(a) it was open to the judge to act on the opinion of Dr Scheepers notwithstanding the contrary opinion of Dr Jacobson;

(b) the course taken by the judge condemned the parties to the unnecessary expense attendant upon a trial of the issue and to a regrettable continuation of the limbo in which, by virtue of the uncertainty as to the appellant's capacity, no step, whether proactive or reactive, could be taken by his solicitors in the proceedings; and

(c) the course was therefore one which, in that he was obliged to seek to give effect to the overriding objective, including saving expense and ensuring expedition, the judge should, with respect to him, not have taken.

31. It is noteworthy that, where at the outset of proceedings the condition of such a claimant is such as to justify it, a litigation friend can act for him pursuant to CPR 21.5 without a court order and without any facility for the defendant to object. In a case, such as the present, in which in the course of proceedings a party aspires to relinquish his conduct of them to a litigation friend, thought will need to be given to whether the other party needs to be served with his application for an order for the litigation friend's appointment. The general rule, set in CPR 23.4(1), is that a copy of an application notice must be served on each "respondent"; but, by CPR 23.1, "respondent" is defined to mean "(a) the person against whom the order is sought and (b) such other person as the court may direct." In that the order is not sought against him, the court will have to consider, in the light of the facts of each case, whether there is any need to direct service upon the other party.