England and Wales High Court (Queen's Bench Division) Decisions

THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
IN THE MANCHESTER DISTRICT REGISTRY

		07 March 2011

MR JUSTICE SILBER:

I. Introduction

1. Joanne Dunhill ("the claimant"), who is a Protected Party now acting through her Litigation Friend, applies for a declaration that the Consent Order entered on 7 January 2003 ("the consent order") whereby her claim for personal injury damages against Shaun Burgin ("the defendant") arising out of a road traffic accident which occurred on 25 June 1999 was settled, is void because she lacked the capacity to enter into this compromise agreement and the Court did not approve the settlement.
2. This is a hearing of preliminary issues which was ordered by Hickinbottom J on 19 April 2010 and which have now been re-formulated by agreement as follows:-

"1. The Parties agree that the legal test in respect of capacity to litigate is issue-specific and relates to the capacity to conduct the proceedings.

2. In order to decide if the consent order made on 7 January 2003 might be set aside on the grounds of lack of capacity, the fundamental question is whether, in considering the issue of capacity historically rather than prospectively, should the Court:

(a) Confine itself to examining the decisions in fact required of the claimant in this action; or

(b) Expand its considerations to include decisions which might have been required if the litigation had been conducted differently?

3. If 2(a) is correct:

a) The practical issue in this case is agreed to be confined to whether the Claimant had capacity to enter the compromise agreement on 7 January 2003. Is the presumption that the Claimant had capacity rebutted on the evidence?

b) If the answer to 3(a) is in the negative, the compromise is unimpeachable (but go to question 5).

c) If the answer to 3(a) is yes, go to question 5.

4. If 2(b) is correct, the Defendant concedes lack of capacity; and go to question 5.

5. The issue of the application of CPR 21.10(1) to the facts of this case is to be adjourned."

3. The court is no longer concerned with another preliminary issue ordered by Hickinbottom J, which was that if the claimant lacked the capacity to agree the consent order, the court should then decide whether to approve it. It is now conceded by the defendant that no court would now approve the settlement of £12,500 because the defendant's pleaded provisional Counter-Schedule on a full liability basis produces a claim of £793,571 while the claimant's provisional Schedule of Damages on the same basis comes to £2,231,746.
4. In this judgment, I will set out the background to this claim (paragraphs 5 to 14), and the statutory background (paragraphs 15 and 16) before considering the correct approach to the issue of capacity (paragraphs 17 to 50) and then in the light of that answer will consider whether the claimant had the requisite capacity (paragraphs 51 to 97).

II. The Background to the Claim

5. The accident, which gave rise to the claimant's claim, occurred on the A635 Doncaster Road/Roundabout on 25 June 1999 when the claimant, who was a pedestrian crossing the road, was knocked down by a motorcycle ridden by the defendant.
6. The claimant, who was then 38 years of age, sustained a head injury resulting in a severe traumatic brain injury as a result of which she suffered, against a background of pre-existing psychological vulnerability, significant cognitive emotional and subsequent psychiatric symptoms. She sustained damage to the olfactory nerve as well as losing her sense of smell. The claimant's head injury has increased substantially the risk of her developing epilepsy.
7. The claimant also suffered post-traumatic amnesia of more than 24 hours as well as evidence of damage to her brain with a fractured skull. According to Dr Bruce Scheepers, who is a Consultant Neuropsychiatrist, the claimant's head injury was diagnosed as being severe and she has undergone a change of personality due to the traumatic brain injury with the result that she is diagnosed as suffering from an organic personality disorder.
8. Prior to the accident, the claimant suffered from anxiety and her organic personality disorder has exacerbated her underlying anxiety.
9. As a result of the accident, the claimant contends that she has an impoverished quality of life, and according to her medical advisors, she is unlikely to make further progress even with active rehabilitation. She requires structured assistance such as sheltered therapeutic employment and on-going case management and support to enable her to function at a reasonable level. The case for the claimant is that she is at substantial risk of severe deterioration in her mental health unless she receives appropriate support and supervision.
10. For her claim against the defendant, the claimant instructed solicitors who had acted for her in matrimonial proceedings and who were W. Brook & Co of Rotherham ("the former solicitors"). They commenced her proceedings against the defendant in the Sheffield County Court on 7 May 2002 alleging that he had negligently knocked down the claimant. The Particulars of Claim and Schedule of Loss state that her losses were:-

"Travelling Expenses

Attending medical examination at Barnsley District General Hospital £5.00 return bus fare

Attending Northern General at Sheffield for treatment 3 x 40 mile round trip.

Petrol charged at 42p per mile £50.40

Travel to Psychiatrist at Darfield bus fare being £192.40

£1.85 for a week for two years

Cost of Care

£4.50 per hour for 10 hours a day for six months £1,170.00

£4.50 per hour for one hour (needs assistance with £460.00

cooking due to lack of sense of smell for two years)

Total Loss £1,885.80

Interest claimed at 8% per annum accident occurring £377.16

on the 25^th June 1999 and it now being February 2002

which is 30 months interest.

Total £2,262.96"

11. A Defence was filed on 18 June 2002 disputing that the defendant had been negligent and claiming that the claimant had been totally at fault or contributorily negligent because she had stepped out from between two stationery cars straight into the path of the defendant, who then had no chance of avoiding the accident. The claimant's case was listed for hearing at Sheffield County Court on the issue of liability on 7 January 2003. On that occasion, the claimant was present together with a representative of her solicitors, Mr Marsh, the counsel who was then acting for her as well as her mental health advocate, Mr Nick Burton, whose role was not to advise her but to ensure that she understood what was said to her and to act as a mouth piece for her, as well as her son's girl friend Carole Rogers. At no time prior to the settlement of the claimant's claim against the defendant did she have a Litigation Friend or was she declared "a patient" within the meaning of that term in the legislation in force at the time which was the Mental Health Act 1983. It was not suggested by anybody that she was at the time of the consent order "a patient" or indeed until many years later that she had then needed a litigation friend.
12. The claim was settled immediately before the case was called on for hearing in the sum of £12,500. I will have to return to explain how it came about that the case was settled (paragraphs 53 to 77 below).
13. On 11 February 2009, the claimant applied to set aside the consent order on the basis that the claimant ought to have been properly classified as a "patient" because she lacked the capacity to conduct proceedings and this is the application which I am now hearing.
14. To complete the picture, I should explain that the claimant has issued proceedings against her former lawyers alleging that they have been negligent in failing to advise the claimant of the full extent of her claim against the defendant. As I have explained, even on the defendant's account, the claimant has a claim for £793,751 on a current valuation against the defendant based on full liability. The schedule as now drawn includes many heads of loss (such as a future need for care) which were not included in the actual claim against the defendant. The claimant's claim against her former solicitors and former counsel awaits the outcome of the present application and I make no comment about it other than to explain that there is no evidence before me that the claimant was asked to make any decision about any head of claim other than those which I have explained in paragraph 10 and the claim for general damages which were set out in the Particulars of Claim.

III. The Statutory Background

15. It is common ground that the issue of capacity has to be considered in the light of the law on mental capacity in force on 7 January 2003, which was before the Mental Capacity Act 2005 came into force. The provisions of the CPR Part 21 then in force, which are material, provided that:-

"Scope of this Part

21.1 – (1) This Part -

(a) contains special provisions which apply in proceedings involving … patients; . . .

(2) In this Part –

…

(b) '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.

Requirement for litigation friend in proceedings by or against children and patients

21.2 - (1) A patient must have a litigation friend to conduct proceedings on his behalf.

Stage of proceedings at which a litigation friend becomes necessary

21.3 - …

(3) If a party becomes a patient during proceedings, no party may take any step in the proceedings without the permission of the court until the patient has a litigation friend.

(4) Any step taken before a … patient has a litigation friend, shall be of no effect, unless the court otherwise orders."

Who may be a litigation friend without a court order

21.4 - …

(3) If nobody has been appointed by the court or, in the case of a patient, authorised under Part VII, a person may act as a litigation friend if he –

(a) can fairly and competently conduct proceedings on behalf of the … patient;

Compromise etc. by or on behalf of child or patient

21.10 – (1) Where a claim is made –

(a) by or on behalf of a … patient; or

(b) against 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 or against the … patient, without the approval of the court.

(2) Where –

(a) before proceedings in which a claim is made by or on behalf of, or against a … patient (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".

16. It is common ground that if the claimant was incapable, then it was a result of mental disorder within the meaning of the Mental Health Act 1983 but the main issue, of course, is whether she was capable of agreeing to settle her claim on 7 January 2003.

IV. The Correct Approach to the Issue of Capacity

(i) The Issue

17. As is set out in the list of issues to be resolved, it is agreed first that the legal test in respect of capacity to litigate is issue-specific, second that the capacity to litigate relates to the capacity to conduct the proceedings, and third that, in this case, the issue has to be considered historically rather than prospectively.
18. The dispute between the parties relates to the issue of whether when considering the capacity of a party historically, the approach of the court should be to (i) confine itself solely to examining what was in fact required of the claimant in her claim against the defendant or (ii) expand its consideration to include decisions which might have been required if the litigation against the defendant had been conducted differently. Mr James Rowley QC, counsel for the defendant, contends that the correct solution is (i) above while Mr Marc Willems, counsel for the claimant, submits that the proper approach is (ii).
19. The case for the claimant is first that she needed to have capacity to conduct proceedings on her own behalf and second that, according to Mr Willems, this entailed a capacity do deal with all matters, and to take all actual and potential decisions relating to the action, up to and including a decision whether or not to settle. So the claimant's case is that capacity is required of her not merely to make the decisions actually required of the claimant but also in respect of any decisions which might have been required of her but which were not required of her.
20. Mr Rowley for the defendant stresses that in this case, capacity is considered retrospectively. He submits that means the court will not speculate where the real position can be discovered and this should be the focus of the court's inquiry. In other words, the court must look at the actual way in which the litigation progressed and the matters which actually required the claimant's decision, which by agreement in this case on this application was the decision to settle on 7 January 2003.

(ii) The Authorities

21. The issue of how capacity should be considered in the case of brain-damaged claimants in the light of the legal position prevailing before the Mental Capacity Act 2005 was implemented has been the subject of two decisions of the Court of Appeal, which are Masterman-Lister v Brutton & Co (Nos 1 and 2) [2003] 1 WLR 1511; [2002] EWCA Civ 1889 and Bailey v Warren [2006] EWCA Civ 51. Both of these cases have been the subject of detailed and helpful submissions by counsel.
22. In the Masterman-Lister case, the claimant had suffered serious injuries, including head injuries as a result of a road traffic accident. Proceedings were commenced by the claimant's father as his next friend but they were adopted by the claimant after he reached the age of 18 in 1981. In September 1987, after receiving advice from his counsel and solicitors, the claimant accepted an offer by the defendants to compromise the claim in which liability had been denied and in which contributory negligence was in issue, as was the quantum of damage.
23. In 1997, the claimant in that case was examined by a doctor who expressed the view that since the time of the accident and as a result of his injuries, the claimant had been "a patient" within the meaning of Section 94(2) of the Mental Health Act 1983, and so he was incapable by reason of mental disorder of managing and administering his property and affairs. The claimant then sought to reopen the settlement of his earlier claim on the grounds that it had never received the approval of the court. On the trial of a preliminary issue, the judge ruled that the claimant 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.
24. The claimant appealed criticising the approach which the trial judge had applied to the issue of capacity and the Court of Appeal was required to consider the proper scope of the issue of capacity. During the course of the appeal, the breadth of the attack on the findings of the trial judge was narrowed but criticism remained throughout the appeal that he had applied too narrow a focus on the capacity to conduct the litigation and that he had wrongly ignored the issue of the claimant's capacity to manage any proceeds of the litigation, as was noted in paragraph 21 of the judgment.
25. The decision of the Court of Appeal on the proper focus of the test for capacity to conduct litigation constituted part of the ratio of the decision to dismiss the appeal.
26. Reasoned judgments were given by Kennedy and Chadwick LJJ with Potter LJ agreeing both with the judgment of Kennedy LJ and with the exegesis of Chadwick LJ on the position under the Rules and the general law as to mental capacity. Potter LJ did not see any inconsistency in the way in which Kennedy and Chadwick LJJ had expressed themselves and nothing has been said during the course of submissions on the present application to suggest that there was any material inconsistency.
27. In considering the relevance to the present application of the reasoning in that case, it is necessary to bear in mind first that the court in that case was confining itself to decisions that had actually been required of the claimant in that case and second that there was no specific consideration of the issue raised by the claimant on the present application, which is the question of capacity to take account of decisions which might have been required if the litigation had been conducted differently. There are statements made in the judgments which show that the approach of the courts is to look at the transaction entered into and then to decide whether the presumption in favour of capacity has been rebutted.
28. Kennedy LJ concluded that:-

"What, however, does seem to me to be of some importance is the issue-specific nature of the test; that is to say the requirement to consider the question of capacity in relation to the particular transaction (its nature and complexity) in respect of which the decisions as to capacity fall to be made. It is not difficult to envisage claimants in personal injury actions with capacity to deal with all matters and take all "lay client" decisions related to their actions up to and including a decision whether or not to settle, but lacking capacity to decide (even with advice) how to administer a large award. In such a case I see no justification for the assertion that the claimant is to be regarded as a patient from the commencement of proceedings. Of course, as Boreham J said in White's case, capacity must be approached in a common sense way, not by reference to each step in the process of litigation, but bearing in mind the basic right of any person to manage his property and affairs for himself, a right with which no lawyer and no court should rush to interfere." [27]

29. The reasoning of Chadwick LJ was that:-

(a) "English law requires that a person must have the necessary mental capacity if he is to do a legally effective act or make a legally effective decision for himself." [57];

(b) "The authorities are unanimous in support of two broad propositions. First, that the mental capacity required by the law is capacity in relation to the transaction which is to be effected. Second, that what is required is the capacity to understand the nature of that transaction when it is explained." [58];

(c) "The authorities to which I have referred provide ample support for the proposition that, at common law at least, the test of mental capacity is issue-specific: that, as Lord Justice Kennedy has pointed out, the test has to be applied in relation to the particular transaction (its nature and complexity) in respect of which the question whether a party has capacity falls to be decided. It is difficult to see why, in the absence of some statutory or regulatory provision which compels a contrary conclusion, the same approach should not be adopted in relation to the pursuit or defence of litigation." [62]; and that

(d) "For the purposes of RSC 80 – and, now, CPR 21 - the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. If he has capacity to understand that which he needs to understand in order to pursue or defend a claim, I can see no reason why the law – whether substantive or procedural – should require the interposition of a next friend or guardian ad litem (or, as such a person is now described in the Civil Procedure Rules, a litigation friend)." [75]

30. Both Kennedy and Chadwick LJJ were there giving guidance on evaluating capacity prospectively and neither was considering the retrospective analysis required in the present application.
31. In Bailey v Warren, the claimant had suffered severe head injuries from which he had made a good physical recovery but he was left with permanent damage to his cognitive functioning. In 2000, the defendant's insurers offered to settle liability on a 50:50 basis and following counsel's advice and in consultation with family members, the claimant accepted that offer. In April 2001, proceedings were commenced but there was no Reply to the Defence in which the agreement was asserted; and so, on 4 December 2001, judgment was entered for the claimant for 50% of full liability of his damages which were to be determined. At no time did anyone acting on behalf of the claimant consider the question of whether the claimant required the intervention of a litigation friend and he therefore was not suing as a patient.
32. In 2003, a neurologist expressed the view that the claimant lacked mental capacity and a litigation friend was subsequently appointed, who applied to set aside the judgment on the basis that at the time of the settlement, the claimant was a patient under CPR Part 21. The judge found that the claimant was a patient as at the date when judgment was entered but that he was not a patient when the agreement was made in 2000 for the purpose of agreeing a 50:50 apportionment of liability. The issues on the appeal were whether the judge had applied the correct test for capacity to manage and administer a litigant's affairs for the purpose of CPR Part 21 and, if not, whether the case should be remitted for re-hearing or whether the liability compromise should then be approved.
33. There was disagreement amongst members of the Court of Appeal but the majority (Ward and Arden LJJ) considered that the inquiry of the court should be focused on the capacity of the claimant to conduct proceedings and that the issue of capacity should not be judged piecemeal. It was held that the test for capacity was whether the litigant had been able to understand all aspects of the proceedings and to take an informed decision with the help of any explanation from his advisors. Thus if the claimant had the ability to understand what was meant by a 50:50 split of liability but lacked the capacity to understand the concept of damages that resulted from that division of liability, the claimant then in those circumstances lacked the true capacity to conduct the proceedings.
34. It was therefore held that the judge had approached the issue of capacity too narrowly. For reasons which are not relevant to the present application, the Court of Appeal did not remit that case but instead it exercised its discretion in favour of approving the original compromise.
35. Hallett LJ considered that the issue of capacity had to be related to the compromise rather than to other matters which had been entered into [73-75], but the majority saw this issue differently. Thus Arden LJ stated that:-

"It seems to me that the right approach must be to ask as a matter of common sense whether the individual steps formed part of a larger sequence of events which should be seen as one, or whether they were in fact self-contained steps which were not connected with each other." [123]

36. She added that in determining what is meant by:-

"the relevant transaction", that "for the purpose of a compromise made at a time when legal proceedings are in contemplation should be treated in the same way as a compromise made in the course of those proceedings" [124].

37. Arden LJ then went on to state (with my emphasis added) that:-

"The assessment of capacity to conduct proceedings depends to some extent on the nature of the proceedings in contemplation. I can only indicate some of the matters to be considered in accessing a client's capacity. The client would need to understand how the proceedings were to be funded. He would need to know about the chances of not succeeding and about the risk of an adverse order as to costs. He would need to have capacity to make the sort of decisions that are likely to arise in litigation. Capacity to conduct such proceedings would include the capacity to give proper instructions for and to approve the particulars of claim, and to approve a compromise. For a client to have capacity to approve a compromise, he would need insight into the compromise, an ability to instruct his solicitors to advise him on it, and an understanding of their advice and an ability to weigh their advice. So far as Mr Bailey was concerned, the receipt of damages could have a substantial impact upon him. He would need to know what he was giving up and what would happen if he refused to accept the offer of compromise." [126]

38. I stress that Arden LJ was considering prospectively capacity of "proceedings in contemplation" and not retrospectively as is required in the present case. Ward LJ agreed with Arden LJ explaining that "the enquiry should be focused on the capacity to conduct proceedings". He explained (with my emphasis added) in paragraph 178 of his judgment that:-

"If, as it seems to me, the relevant capacity is capacity to conduct proceedings, then the client must be able to understand all aspects of those proceedings and take an informed decision, with the help of such explanation as he is given, which bears upon them. It cannot be judged piecemeal. If he has the ability to understand what is meant by a 50/50 split of liability but lacks the capacity to understand the concept of damages which results from that division of liability, then he lacks true capacity to conduct the proceedings. To return to my main thesis, all of this makes much more sense (I hesitate to use the word commonsense) where one is considering the capacity to conduct the proceedings at the moment when they are instituted and thereafter during their continuance and it makes less sense to consider the matter in the run up to the litigation even if litigation is a possible outcome in default of a fully successful settlement of the claim. If, therefore, it is pertinent to ask whether the Claimant was a patient in November, which is not my primary view, then I fear Holland J approached the matter too narrowly and Mr Ullstein makes good his attack on the judgment on that basis." [178]

39. As the words underlined show, in the Bailey case, the Court of Appeal was again giving guidance on evaluating capacity prospectively rather than retrospectively which is the task on this application. It is noteworthy that the Court of Appeal in that case was, as in the Masterman-Lister case, not considering the issue with which I am now concerned which is whether capacity has also to relate to decisions which might have been required if the litigation had been conducted differently. Further their attention was focused on the approach to a pre-writ compromise agreement, which is very different from what occurred in the case which led to the present application. Nevertheless as in the Masterman-Lister case, valuable guidance has been given on what is meant by capacity which is the subject to which I will have to return in Section IV below.
40. In his final submissions, Mr Willems sought to derive assistance from the decision of Henderson J when sitting in the Court of Protection in the case of In the matter of S [2010] EWHC 2405 (COP). That case was concerned with the operation of the Mental Capacity Act 2005, which was enacted long after the consent order was made in the present case. Mr Willems accepts that Henderson J did not refer to the judgments in either Masterman-Lister nor in Bailey and, for the present judgment, I am unable to derive any assistance from Henderson J's interesting judgment. Although it is noteworthy that he stated that "it is clear that the test of capacity is both issue and time-specific" [38].

(iii) Discussion

41. I should stress that in Bailey, the majority's comments were looking at matters prospectively as Arden LJ referred to "proceedings in contemplation" and Ward LJ was dealing with "the capacity to conduct proceedings" at the moment when they are instituted. Another reason why Bailey is not of relevance is the reason why the Court of Appeal disagreed with the judge is that he did not consider capacity as at November 2000 which was when the compromise was made (see paragraphs [4] and [136]). Neither the reasoning in Masterman-Lister nor Bailey deals with the precise issue with which I am concerned which relates to whether when considering the capacity of a party, the court should (as Mr Rowley contends to be the case) confine itself solely to examining what was in fact required of a claimant in a claim against the defendant or whether (as Mr Willems submits is the correct position) it should expand its consideration to consider discussions which might have been required if the litigation against the defendant had been conducted differently. That means it is necessary to analyse what the court is seeking to do when it retrospectively considers the capacity of a litigant, like the claimant.
42. In my view, the court is then looking to see whether the presumption of capacity can be rebutted in respect of the transaction actually carried out in order to ascertain if it is valid. When this retrospective exercise is carried out, there is no reason why the court should have to consider other transactions which might have been carried out but which have not been carried out. Otherwise it would mean that if a party had full capacity to agree all steps which were taken in a particular piece of litigation, those steps could be set aside just because there is another step which could conceivably have been taken but which was not taken and was beyond the capacity of the litigant. This would mean that the court would set aside for lack of capacity steps in the litigation which a party was capable of entering into. I do not consider that to be the law. That is my first reason why I consider the defendant's approach to be correct.
43. A second reason why I accept the submission of Mr Rowley on this issue is that the authorities in relation to whether capacity was rebutted in a previous transaction stress that the focus on the issue of capacity must be on what the person concerned actually did and not what he or she might have done. Thus in Ball v Mallin (1829) 3 Bligh N.S.1, 12, 22, the House of Lords upheld a direction to the jury that what was required was the person "should be capable of understanding what he did by executing the deed in question when its general import was fully explained to him" (my emphasis added). It is noteworthy that the direction did not state that the consideration should include decisions which might have been required but which in fact were not required which is what Mr Willems contends.
44. The need in a retrospective exercise to focus on what the person concerned actually did is shown by the approach of the Court of Appeal in the case of In the Estate of Park, deceased [1954] P12, in which Singleton LJ (with my emphasis added) stated that the question of determining issue of capacity was:-

"Was the deceased on the morning of May 30^th 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?"

Again the focus of the court is solely on the actual transaction which was entered into and not on a different contract which might have been entered into.

45. Finally, sitting in the High Court of Australia in Gibbons v Wright (1954) 91 CLR, Sir Owen Dixon stated the test for mental capacity to enter a transaction at page 438 in these terms (with my emphasis added):-

"..the mental capacity required by the law in respect of any instrument is relevant to the particular transaction which is being affected by means of the instrument and may be described as a capacity to understand the nature of that transaction when it is explained.

46. This shows the focus of the court's inquiry has to be solely on the actual transaction entered into and not on a transaction which the claimant might have entered into but did not. This supports the defendant's case.
47. A third reason why I consider the defendant's submission on this point to be correct is that if Mr Willems' approach was to be applied, it would have serious and potentially undesirable consequences on other branches of the law in which capacity has also to be considered. Among the areas in which capacity arises are the fields of capacity to consent to medical treatment and capacity to dispose of assets by, for example, a will. All the authorities indicate that when capacity is being considered in those cases, the question of consent has to be geared to the precise decision that is being made and not alternative remedies that might be available. Thus Butler-Sloss J said (with my emphasis added) in Re MB [1997] 2 FLR 426 at 437d :-

"A person lacks capacity if some impairment or disturbance of medical functioning renders the person unable to make a decision whether to consent or to refuse treatment. That ability 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…"

What has to be considered is solely capacity to consent to the particular treatment concerned and not whether the patient has to consider alternative treatments, which were or might be or have been available; but that is what would have to follow if Mr Willems' interpretation is correct. In the cases where capacity is being considered retrospectively, the court would on the basis of his submission, have to consider that a person did not have capacity if they had capacity to consent to treatment which was undertaken but lacked capacity to enter another form of more complicated treatment which neither the patient or his medical advisers had even thought about let alone mentioned.

48. By the same token when the validity of a gift made by a person suffering from senile dementia was being considered, Mr Martin Nourse QC sitting as a deputy judge of the Chancery Division said (with my emphasis added) in Re Beaney, deceased [1978] 1 WLR 770 at 774 that "the degree and extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect". It was not suggested in that case that there had to be consideration of the issue of whether the donor would have been able to make, in Mr Willems' words, "decisions which might have been required if the [transaction] had been conducted differently".
49. A final reason why I accept Mr Rowley's submissions is that in the analysis given by Kennedy LJ in Masterman-Lister in paragraph 27 which I quoted in paragraph 28 above, he refers (with my emphasis added) to "What, however, does seem to me to be of some importance is the issue-specific nature of the test; that is to say the requirement to consider the question of capacity in relation to the particular transaction (its nature and complexity) in respect of which the decisions as to capacity fall to be made". Similarly in the same case, Chadwick LJ said (with my emphasis added) "The authorities are unanimous in support of two broad propositions. First, that the mental capacity required by the law is capacity in relation to the transaction which is to be effected". To my mind, those citations show that capacity is determined retrospectively by looking at the actual proceedings which, in the present case, were for general damages and the limited special damages set out in the Schedule of Loss accompanying the Particulars of Claim and which I quoted in paragraph 10 above. This fortifies my view that Mr Rowley is correct.
50. I therefore conclude in relation to issue 2, that when the court is considering if the consent order might be set aside on grounds of lack of capacity, the fundamental question for the court when considering this issue of capacity historically, is confined to examining the decisions in fact required of the claimant in the action as drafted.

V. Did the claimant have capacity to agree to the consent order made on 7 January 2003?

(i) Introduction

51. As I explained in paragraph 2, if (as has turned out to be the case) consideration of the issue of capacity historically has to be limited to examining the decisions and facts required in this action, then as set out in paragraph 3(a) of the agreed list of issues:-

"The practical issue in this case is agreed to be confined to whether the claimant had capacity to enter the compromise agreement on 7 January 2003. Is the presumption that the claimant had capacity rebutted on the evidence?"

52. There is no dispute between the parties because, as I have explained, the appropriate test was as explained by Chadwick LJ in Masterman-Lister that the test to be applied:-

"is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisors and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. If he has capacity to understand that which he needs to understand in order to pursue or defend the claim, I can see no reason why the law – whether substantive or procedural – should require the interposition of a next friend or guardian ad litem" [75] (cited with approval in Bailey v Warren (supra) [174] per Arden LJ).

53. It is common ground that the answer to this issue entails focussing on precisely what was said and what happened at Sheffield County Court on 7 January 2003 leading up to the making of the consent order. In other words, the court is required to carry out a fact-sensitive inquiry in which it is necessary to see how the claimant behaved in order to assess what she was able to and did understand during those discussions leading up to the settlement. The claimant did not give evidence but she instead made a witness statement which is to be adduced as hearsay evidence under the Civil Evidence Act 1995 ("the 1995 Act"). She explained in her witness statement dated 15 January 2008 that she did not remember anything much about what was said but she recollected that:-

a) "There was a lot of coming and going. At some stage, the barrister told me the other side had made an offer of £10,000 to settle the case. My immediate response was 'chickenfeed' and I was really angry that it had even been suggested that was all I was worth" (paragraph 7.21);

b) "The barrister said something about the problems in my case and the fact some of my witnesses hadn't turned up. As far as I was aware, it was only Sam who hadn't turned up. I thought we had an expert's report from the accident investigator and this was quite favourable to us. I though this would be enough for us to win"...paragraph 7.22);

c) "I made my views on the offer very clear but everyone else said that if I didn't take what was on offer I was likely to get nothing. I didn't understand why this was." She then said that as she was so angry, she clawed her face with her fingers so that there was blood trickling down her cheek and "Carole's lovely suit had blood all over it" ...paragraph 7.23);

d) The barrister told her that the settlement offer was £12,500 which included the interim award of £2,500; (paragraph 7.24); and that

e) "I don't remember how we actually came to accept this sum. I think I was expected to have to sign something to say it was all over. However, it seems it did not as it was already a 'done deal' even though I don't remember whether I ever actually said I would take it…It was all over with so quickly"(paragraph 7.25).

54. It is common ground, however, that the most detailed evidence relating to what was discussed at Sheffield County Court in the period leading up to the making of the consent order comes from a file note by Mr Marsh, a trainee solicitor, who originally represented the claimant and whose evidence is adduced under the 1995 Act with no counter-notice having been served. The only oral evidence adduced at the hearing of this application from anybody who was present at Sheffield County Court comes from Mr Nick Burton, who was the Mental Health Advocate who assisted the claimant in 2002 and 2003. I will consider these two pieces of evidence first before looking at the other evidence to see the extent to which they corroborate or conflict with my conclusions on the evidence in the attendance note and Mr Burton's evidence.

(ii) The file attendance note of Mr Marsh

55. Mr Marsh was a trainee solicitor who compiled the note in accordance of his duties.
56. It is not disputed that it was a contemporary note. The relevant parts of the note state that:-

"Upon arrival at court at approximately 10.00 a.m. counsel had already had an opportunity to speak with the client. A conference then began where myself, Mr Crossley (counsel), client, Carol Rogers and Mr Nick Burton who was a friend of the client from Barnsley Advocacy all attended.

It quickly became apparent that the main witness for the client, Mr Lee Sam Tasker her son was not at court and was unlikely to attend. Client once again confirmed that he had no fixed abode and led somewhat of a nomadic lifestyle. She did however explain that she did telephone him yesterday advising him that he could go through to court with her by taxi, if he were to get to her house in the morning. Carol Rogers also confirmed that she had spoken to Mr Tasker yesterday and the result of the conversation was that he was going to attend court for his mother.

The advice of counsel was that due to the non-attendance of the main witness she could apply for an adjournment to the judge, but he may be unwilling to allow an adjournment in these circumstances. The alternative was to ask the defendants whether they were intending to pay her some of (sic) money for full and final settlement of her claim without admission of liability. Counsel explained that if this was the case the offer would be drastically reduced from what she may expect if she were to receive full damages and she authorised him to speak to the defendants about this.

When counsel returned he informed the client that there (sic) had put forward an offer of £10,000.00 without admission of liability. The client originally viewed the offer as "chicken feed" but when it was explained to her by counsel that the opposition had two strong witnesses, neither Sam Tasker or George Hall had attended, the client herself was hesitant to take the stand and even if she were to proceed to trial the court's (sic) were likely to only award damages of 25-33% of what she could expect due to her contributory negligence. Counsel explained this in some detail, but originally the client struggled with this, but myself, Mr Burton and Miss Rogers tried to assist her in explanation, which she eventually understood.

The decision by Miss Dunhill although she was not 100% sure about accepting the offer of £12,500 was given without duress and with an opportunity of full and frank information.

It was therefore agreed that a consent order would be drafted explaining that the claimant was to accept the £12,500.00 offer in full and final settlement and that they would pay our costs and that would be the end of the matter. The client seemed to understand the majority of the information without any problems, but whenever a difficult point arose it was explained to her in some detail."

57. My task is to ascertain what weight to attach to this note, which is hearsay, and that entails considering section 4 of the 1995 Act which provides that:-

"4 Considerations relevant to weighing of hearsay evidence.

(1) In estimating the weight (if any) to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.

(2) Regard may be had, in particular, to the following—

(a) whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;

(b) whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;

(c) whether the evidence involves multiple hearsay;

(d) whether any person involved had any motive to conceal or misrepresent matters;

(e) whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;

(f) whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight."

58. In respect of the history of events described in the attendance note, I have come to the conclusion that substantial weight is prima facie to be attached to it bearing in mind that:-

a) The attendance note was made contemporaneously;

b) The person making the attendance note had no motive to conceal or misrepresent any matters and indeed he could not have predicted that the attendance note would become of substantial significance in litigation eight years later or why it would or might become so;

c) The attendance note was created as part of his professional duty and as a result of his training to keep an accurate note of dealings with clients and recording advice given to them;

d) There is nothing in the description of the factual events in the attendance note which raises the slightest suspicion in my mind that it could not be accurate;

e) It would not have been reasonable or practicable for Mr Marsh to be called because first he is unlikely to have any recollection of what was said because there would have been no reason for him to have kept details of the discussion leading to the settlement in his mind for eight years; second, it would not have been practicable to call him bearing in mind that his erstwhile (if not present) employers are the subject of a protected writ issued by the claimant for negligence. That fact is likely to have led to submissions that his oral evidence was flawed as being biased and so should be discounted; and that

f) The note is consistent with some other matters. For instance such as the statements that the claimant was struggling and needed repeated explanations seem consistent with the claimant's injuries and the expert medical evidence.

59. In all the circumstances, I consider that prima facie the facts set out in the attendance note are correct; but of course they are subject to rebuttal by other evidence. In so far as Mr Marsh gave an opinion on the ability of the claimant to understand, I treat that conclusion with some care
60. I conclude that the attendance note constitutes cogent evidence that:-

a) The claimant "originally viewed the offer [of £10,000] as chicken feed";

b) Counsel explained that Sam Tasker and George Hall had not turned up while the opposition had "two strong independent witnesses" and so the court was "likely to only award damages of 25-30% of what she could expect due to her contributory negligence";

c) "Counsel explained this in some detail but originally the [claimant] struggled with this, but myself, Mr Burton and Miss Rogers tried to assist her is (sic) explanation, which she eventually understood"; and that

d) "The decision by [the claimant] although she was not 100% about accepting the offer of £12,500 was given without duress and with an opportunity of full and frank information". That does not in itself show that the claimant had capacity.

(iii) Mr Burton's evidence

61. Mr Nick Burton gave evidence about his experience and he explained that after completing his studies, he had made a career of working with people with learning difficulties and/or mental health problems. In about 2002 or 2003, Mr Burton stated that he took a position with the Barnsley Advocacy Service where the majority of his clients experienced some kind of mental health problem and that was when and how he became acquainted with the claimant. He said that the claimant was a client of the Advisory Service when he joined the team.
62. According to Mr Burton, he learnt about the claimant's claim against the defendant and his role in connection with it was "to help her give instructions". That must have entailed ensuring that she understood the matters on which she had to give instructions. He explained that the Advocacy Service operated within guidelines which did not permit him, as an advocate, to be put in the position of having to advise a client or having to give instructions on behalf of a client.
63. Mr Burton explained that his role was to help the claimant to understand matters if she needed it and indeed help was never refused. Mr Burton gave evidence of his dealings with the claimant's solicitors before 7 January 2003. He referred to a meeting not with Mr Marsh but instead with an actual solicitor at that firm when that person raised his voice when speaking to the claimant and Mr Burton concluded that this person:-

"had not worked out a way to deal with her and her need to receive information in 'small manageable chunks' When information and advice was given, "I thought he failed to give her sufficient time to take it in" (paragraph 3.8 of Mr Burton's witness statement).

64. Mr Burton said that he understood that the claimant was expecting her son Sam and his girlfriend Carol to attend court on 7 January 2003 to give evidence because they were present when the claimant was crossing the road and when she was struck by the motorcycle. According to Mr Burton, the claimant had told him that she had been assured by her son that he would be present at court so as to be able to give evidence in support of her claim. Unfortunately Mr. Burton said that when he met the claimant at court "she was in a bit of a state because Sam had not arrived and she was unable to contact him" (paragraph 5.4 of Mr Burton's witness statement). He explained that the claimant was worried because the claimant's team had been told that the defendant had brought all their witnesses while her son Sam was not at court and so he could not give evidence.
65. Mr Burton stated that he could not remember how much the offer was, apart from the fact that it was very low, and that the claimant was unhappy about the offer and was "hell bent on going into Court to get what she felt she deserved". According to Mr Burton, the claimant's solicitors kept telling the claimant that the defendant had witnesses while the claimant did not with the result that:-

"We couldn't be sure we would be able to prove the accident was the motor cyclists fault and that if she failed to do so, she would get nothing. He was very negative about the case".

66. The contents of the attendance note were corroborated because Mr Burton said that the solicitor "ran through the facts numerous times but in such a way that Joanne could have been left in no doubt that he thought that she should take the money". Mr Burton said that the barrister joined in the discussions and he seemed to be of the same view as the solicitor.
67. Mr Burton also explained that Carol, who was the girlfriend of the son of the claimant, joined in the discussions in that:-

"She tried to explain the issues to [the claimant] but the inescapable conclusion was that the legal team believed that [the claimant] should accept the money".

68. An important issue to be resolved is whether Mr. Burton assisted with explanations to the claimant and if he did how he did it. In his oral evidence, Mr Burton did not remember himself assisting with the explanation but the attendance note states that he did. Mr Burton accepted in oral evidence that if he had assisted the claimant with explanations, he would have employed the use of presenting small chunks of information and that he would have helped the claimant by trying to keep her calm.
69. In determining the weight to be attached to Mr Burton's evidence, I have concluded that although he is clearly an honest man, I was left in no doubt that his recollection of what happened at the meeting was very sketchy. Indeed, he said in his witness statement which he made as long ago as 1 May 2008 "I do not remember very much about being in court that day". I was left in no doubt that his recollection of the events of 7 January 2003 leading up to the consent order were very sketchy and unreliable but that is not surprising because first Mr Burton's attendance note of the events of 7 January 2003 had been destroyed before he was required to make his witness statement and so he could not refresh his memory from it ; second at the time of the settlement negotiations and in the ensuing period, he would have had no reason to believe that he would be required to give evidence about it. So I was left with the clear impression that it would not be safe to rely on his oral evidence especially on any particular matter which was not in his witness statement. In so far as there is a conflict between what is in the contemporaneous attendance note compiled by Mr. Marsh and the evidence of Mr. Burton, I prefer what is in the attendance note. I therefore am not prepared to accept any part of Mr. Burton's evidence which is inconsistent with the attendance note but subject to the evidence of further witnesses.
70. I have come to the clear conclusion that Mr Burton did assist with the explanation given to the claimant as stated in the attendance note and that conclusion is fortified by three factors. First, and perhaps more importantly, it must not be forgotten that Mr Burton's role was to help the claimant's understanding and to help her to express her views (paragraph 2.10 and 2.11) and it is difficult to understand what he was doing at Sheffield County Court if it was not to ensure that the claimant understood what she was doing and that her views were ventilated. Second, Mr Burton accepted in oral evidence that if he had assisted the claimant with explanations and he would have employed the use of presenting small chunks of information, and he would have helped her by trying to keep her calm. Although Mr Burton did not accept in evidence that this occurred, I am sure that he did explain matters to the claimant because the attendance note has the ring of truth. Third, I cannot believe that Mr. Burton would have sat silently in the room when the discussions were going on without explaining matters to the claimant when she was having difficulties understanding what decisions were required of her.
71. In deciding what actually happened prior to the consent order being entered into, I do bear in mind that the evidence of Mr Burton was that the conference room was small with five people in it, namely the claimant, Carol, the solicitor, the barrister and Mr Burton and also that the claimant was very distressed both at the prospect of attending court and because of the amount of money that she would receive. Mr Willems attaches importance to Mr Burton's oral evidence relating to the lack of ability of the claimant to understand but, as I have explained I cannot accept such evidence because Mr. Burton's recollection of event is too sketchy and inadequate especially as he frankly stated in his witness statement made in May 2008 that "I do not remember very much about being in court that day".
72. My conclusions on what occurred are that:-

a) The absence of the claimant's main witness was a major source of concern as the claimant said in her own witness statement that she had no recollection of the accident;

b) The advice of counsel was that due to the absence of the claimant's main witness an application to the judge could be made for an adjournment but "he may be unwilling to allow an adjournment in these circumstances" and the alternative was to ask the defendant to settle the case but in that event, the offer would be drastically reduced from what she might expect if she were to receive full damages. The claimant then authorised her legal team to speak to the defendants;

c) When counsel returned he informed the claimant that there had been an offer of £10,000 without admission of liability which the claimant originally viewed as "chicken feed";

d) It was explained to the claimant by her counsel that the defendant had two strong independent witnesses; but neither the claimant's son Sam nor George Hall had attended and the claimant herself was hesitant to go into the witness box. The result was that, even if she were to proceed to trial, the court was only likely to award damages of 25-33% of what she could expect due to her contributory negligence;

e) Counsel explained this in some detail and "originally the client struggled with this but, [Mr Marsh], Mr Burton and Mr Rogers tried to assist her is (sic) explanation which she eventually understood".

f) It is noteworthy that while Mr Burton had been critical of the claimant's solicitors on a previous occasion for not presenting the information in "small manageable chunks" and "giving her sufficient time to take it in" (paragraph 3.8), no such criticism was levelled at the barrister and trainee solicitor at the hearing on 7 January 2003. That suggests that a full explanation was given in an appropriate manner by the lawyers;

g) I would add that for the reasons set out in paragraph 70 above I am quite satisfied that Mr Burton assisted in the explanation. I am fortified in coming to that conclusion by the fact that Mr Burton's actual role was to assist the claimant in understanding issues. In addition Mr Burton accepted that he would do his best to see that the claimant understood matters before she made decisions; and

h) There is no evidence that the claimant became aggressive, cried or walked out as none of these matters are referred to in the attendance note and Mr Burton's evidence does not assist. In addition there is no evidence that the claimant harmed herself as she herself contended because Mr. Marsh would have noted it and Mr. Burton would have recalled it too.

73. I ought to explain that if I had been in any doubt as to whether the claimant understood what was explained to her in making the decision to accept the terms of the consent order, there are two additional reasons why I would have come to that same conclusion. First, Mr Burton explained that once the claimant had formed an opinion she stuck by it no matter what might be said to counter that opinion. In this case it is clear that she initially rejected the offer of £10,000 but the fact that she changed her mind indicates first that there had been good communication from her legal team and second that she had understood it.
74. A second factor which fortifies my conclusion is that as Mr Burton explained the claimant made it clear she was extremely unhappy after agreeing the compromise (paragraph 5.13). This shows, as I will explain in paragraph 93 below, and as Dr. Berry the expert neuropsychologist stated, that the claimant had understood and retained the fact that she had agreed to the compromise; and it is consistent with her original reaction of regarding the first offer as "chicken feed".
75. In reaching this conclusion, I have considered, but rejected, the contention that any inference can be drawn by the fact that the claimant was anxious and upset. Such reactions are almost invariably found in litigants and their presence does not undermine the suggestion that the claimant in fact understood what was going on.
76. I ought to add that in reaching those conclusions, I have considered the remaining lay evidence. Dr Jackson's evidence merely shows the residual brain damage and difficulties but is not relevant to the compromise.
77. I have reached the same conclusion in respect of the evidence of the claimant, her son (Paul Tasker) and her sister (Linda Dunhill). Neither Paul Tasker nor Linda Dunhill were present on 7 January 2003 while the claimant's witness statement made five years after the event is that she remembers little of the day of compromise and little of what was said. None of this evidence dislodges my provisional conclusions.

(iv) The Neuro-Psychiatric evidence

78. The evidence for the claimant was given by Dr Bruce Scheepers but his evidence is now irrelevant because his view was that if (which has turned out to be the case) the court accepts the defendant's approach on capacity, he accepts that he has never considered and expressed an opinion looking solely at the narrow issue of the claimant's capacity to make the compromise on 7 January 2003. Although he says that the claimant was never invited to weigh matters in the balance, I am unable to agree because the claimant was given explanations which enabled her to make a decision.
79. The defendant's psychiatric evidence was given by Professor Greg Wilkinson who considered the position if, as has turned out to be the case, the defendant's approach to the test on capacity is accepted. He concluded that although it was more difficult to reach a decision on capacity in retrospect than it would have been at the time, the issue was simplified because of the uncomplicated decisions that the claimant actually had to make on 7 January. His analysis is that the claimant had the capacity to understand the information relevant to the decisions she made to settle because she was able to use and weigh information as part of the process of making the decision she needed to make.
80. To reach that conclusion, Professor Wilkinson carried out a detailed analysis of what the claimant did on 7 January 2003 during his discussions leading up to the settlement and this was based on the witness statements of the claimant, Mr. Burton and the attendance note. He explained that:-

a) "The claimant was evidently aware of the fact of and, the significance of, the non-appearance of her son as a witness in relation to her Claim" (30.17). Her statement explained that she had asked her son to be at her house by a certain time so that they could go to court by taxi but, in spite of her son's promise, he did not arrive before it was time to leave home and that made her panic;

b) The claimant's first decision was whether to try to adjourn or negotiate a cash settlement and Professor Wilkinson took the view that the claimant "had the capacity to understand the sparse information required and to retain it in her mind long enough to make a decision on this". He pointed out that according to the attendance note, the claimant made a decision on this in line with the advice of her legal team and the record indicates that she authorised her barrister to speak to the defendants about attempting to reach a full and final satisfaction;

c) The claimant then had to decide whether or not to accept the offer of £10,000 without admission of liability and according to Professor Wilkinson "this she evidently decided easily (and I presume, given that this litigation has restarted, realistically). [The claimant] was able to use or weigh information as part of the process of making the decision she needed to make. [The claimant] showed understanding that the offer was low";

d) The claimant's witness statement noted that the barrister had said something about the problems in the case and that some of the witnesses had not turned; up but she was aware that only her son had not turned up;

e) Professor Wilkinson believed that even if the claimant was right about self harm using her fingernails and the appearance of shadows, this did not indicate psychotic mental disorder and/or lack of capacity to make the decision she made to settle on 7 January 2003. He noted that the attendance note did not refer to the claimant's self harm, or in terms, distraction due to shadows. I interject to say that I have found, as I explained in paragraph 72(h) above, that there is no reliable evidence of self harm;

f) According to Mr Burton, the claimant was told that the defendant had witnesses and that she did not; and there was uncertainty about proving the accident was the motor cyclist's fault; and, if she failed to do so, she would get nothing. He observed that the solicitor ran through the facts numerous times but in such a manner that the claimant could have been in no doubt that he thought she should take the money. Mr Burton explained in respect of all the claimant's queries, the legal team's answer to her was always that she might get nothing; and, in the face of this opinion, the claimant agreed to accept the offer because, in Mr Burton's view, she plainly felt she had no alternative;

g) Professor Wilkinson took the view that the claimant began correctly in terms of her decision whether to accept an increased offer of £12,500, from the position it was too low. There then followed persistent advice from two lawyers including a barrister who sought to persuade her to accept the offer. Professor Wilkinson explained "in my experience as a medico-legal expert it is not generally the sign of a lack of understanding for a client to listen to and modify her views when a legal team presents reasoned argument. I cannot infer from [the claimant's] change of mind that she did not understand what she was being told, rather the reverse since she started from the opposite stand point of wanting to reject, and eventually did something she did not want to do. The attendance note itself maintains that everything was explained so that she understood in the end";

h) Professor Wilkinson said that Mr Burton's evidence showed the claimant "understood the advice to the extent that she was 'extremely unhappy' with it and felt that she had no alternative other than to accept. [The claimant] did not make an impulsive decision on the evidence rather a long drawn out and reluctant one. I infer that she understood what she was doing and reached a decision just (I presume again) the wrong one". He adds that many intelligent people are mistakenly persuaded by others to make poor decisions but that has nothing to do with their capacity and everything to do with the advice;

i) Professor Wilkinson concluded "indeed I believe it was likely that it was the claimant's very understanding of this obvious point[ namely that the payment of £12,500 would be the end of the matter] which made her so 'extremely unhappy' in accepting the advice to accept £12,500"; and

j) Professor Wilkinson took the view that the claimant "was clearly able to communicate the ultimate decision she made to her legal advisers".

81. My task of ascertaining whether the claimant had capacity entails considering with care how the claimant reacted to the suggestion that she should settle and the advice given to her; and I find the detailed analysis of Professor Wilkinson very impressive and of great assistance as it showed how he reached the conclusion that the claimant actually satisfied the test for capacity, taking account of the assistance and explanations from legal advisers and friends. Significantly, his evidence, reasoning and conclusions did not suffer from the defect of reaching a decision on capacity based on consideration of hypothetical circumstances very different from what was required of the claimant on 7 January 2003. He concentrated on the period leading to the settlement when, in particular, the claimant was receiving regular and repeated explanations; and when those with her were trying to ensure that she understood all relevant factors and could make such decisions as were appropriate.
82. In reaching his conclusion, Professor Wilkinson took into account his findings on examination. He considered all the other reports and noted for example that Mr Rammani reported on 11 October 2001 that the claimant had no problem in activities of daily living, her speech was normal and she was able to communicate well. Above all the strength of Professor Wilkinson's report was his careful and thoughtful analysis of the way in which the claimant understood the matters on which she was required to make a decision in the period leading up to the settlement on 7 January 2003.

(v). The Neuropsychologist's evidence

83. There was much common ground between Dr. Elisabeth Berry the defendant's consultant clinical neuropsychologist and Dr Nick Morton who performed the same role for the claimant. There is no doubt that the claimant had very significant difficulties cognitively in memorising matters and in performing executive functions. Dr Morton accepted that people with the level of IQ of the claimant did not necessarily lack capacity.
84. Dr. Morton had produced a report on the claimant in 2002 when he carried out an interview with her and then subjected her to a series of tests using the Wechsler Abbreviated Scale of Intelligence; a series of tests to ascertain her attention (such as assessing how different noises would effect her concentration); and a series of tests to assess her memory, her executive functions, and her cognitive functions of planning and strategic application. The tests that were applied included a word repetition test (when 15 words were presented then repeated after five minutes), a test to gauge her ability to recall a story, and other tests which related to situations which were very different from the situation confronting the claimant on 7 January 2003. Thus I would have concluded that none of the tests, whether taken individually or cumulatively, go anywhere near rebutting the presumption of capacity to enter into the compromise agreement. He did not consider how repeated explanations of the kind given to the claimant by her lawyers, Mr. Burton and Carole Rogers could have compensated for her mental disabilities.
85. Dr. Morton's conclusions in his report of 2 November 2010 after seeing the claimant on 23 September 2010 were that:-

"I was not asked to address the issue of capacity in my 2002 report, however, the nature of my assessment would have allowed comment of her capacity at the time. Had I been asked, I would have concluded that she would not have been able to weigh up, and comprehend the implications of major financial decisions from a cognitive perspective. Further, I would have felt that Ms Dunhill could be unduly influenced by her high levels of anxiety present in pre trial negotiations. Finally, Ms Dunhill's reliability in making decisions in 2002 would have been primarily affected by her severe impairment of executive function which, in my view, this does not allow her to take a balanced approach to understanding the pros and con and to understanding the long-term implications on her care and rehabilitation of accepting a substantially reduced amount of compensation.

Therefore, given my view that Ms Dunhill lacked capacity in October 2002 and continues to lack capacity at this assessment then I am of the view that it is reasonable to conclude that she lacked capacity on the 7^th January 2003. It is my view that Ms Dunhill should have been considered a 'patient' under the terms of the Mental Health Act 1983 in January 2003 and could not have been asked to have reliably make the decision regarding the reduction in her compensation.

With particular reference to the decision Ms Dunhill had to make in January 2003, whilst superficially this is a simple 'yes' or 'no' decision, my view is that a valid and informed response would have required cognitive capacity that Ms Dunhill did not and still does not have. She is unlikely to have the ability to understand the true extent of her need for care/rehabilitation and also comprehend the financial costs of her care. Her ability to calculate, understand and then weigh up the finances and translate these to her everyday life is, in my view, extremely limited. Without these cognitive abilities Ms Dunhill cannot make an informed choice, with an understanding of the implications, about accepting a reduced compensation amount."

86. Dr. Berry's approach was different as she considered that the neuropsychological assessments of the claimant carried out in 2000 and 2002 both stated that although acquisition of new information was impaired, subsequent retention of that information after a delay was unaffected, with no additional loss after a thirty minute delay. She also noted that the claimant's working memory skills were not significantly impaired at the time of the examination in 2000, nor at the time of her report in August 2010. Although the neuropsychological assessment in 2002 did not include a reference to working memory, Dr. Berry inferred that the claimant's working memory skills were on the balance of probability, at a similar level at that time.
87. Dr. Berry was therefore of the opinion that, on the balance of probabilities, the claimant's memory skills during that time period, including in early 2003, would have been sufficient to allow her to retain information which related to the offer of settlement on the day of her attendance at court. In reaching that conclusion, Dr. Berry noted that a review of various documentation (including the attendance note as well as the witness statements of Mr. Burton and the claimant) also indicated that she seemed to understand some of the issues arising without needing advice, whereas for other issues she required advice. Thus, she appeared able to understand that her son Sam was not at court and was unlikely to attend. Furthermore, according to Dr. Berry, the claimant also appeared from her statement and that of Mr. Burton to have had an understanding of the issues related to adjourning the case or negotiating a cash settlement because following advice from Counsel, she authorised him to speak to the defendants about this. The claimant also appeared to have been able to form an opinion on the offer of £10,000, as is evident in her response and description of the offer as "chicken feed"
88. The documentation also indicated to Dr. Berry that, up to this point of the discussions at Sheffield County Court, the claimant appeared to have had no significant difficulties in understanding the information presented to her and in making a decision based on that information. Consideration of the issues that she had to consider at the various stages of the decision-making process up to that stage were categorical binary decisions, where the weighing of information did not involve the balancing of multiple options.
89. Dr. Berry also noted that after the claimant had been informed of the offer and when she was also advised of the issues relevant to her decision whether to settle, she originally struggled with this. Making a decision on these issues would according to Dr. Berry have required the claimant to weigh the different strands of the information received, whilst also considering possible outcomes and retain the relevant information in the process. Dr. Berry considered that, although the claimant's working memory skills could have been regarded as adequate for this, the impairments in her executive function would have made it difficult for the claimant to make a decision on this issue without receiving detailed explanation and advice. Very significantly, detailed explanations and advice were given to the claimant as was shown in the attendance note and the evidence of Mr. Burton.
90. Dr. Berry concluded that she was therefore of the opinion that on the balance of probabilities the claimant did have capacity to understand the information relevant to the decision and make a decision based on that information. This conclusion was reached after considering carefully the documentation to which I have referred.

(vi) Conclusions on the Neuropsychologists' evidence

91. The neuropsychologists reached their conclusions in different ways and it seems that each of them was much influenced by the views of their legal team on the correct approach to capacity. So Dr. Berry considered capacity in relation to the events leading up to the consent order on the basis of what Mr. Rowley had contended was the correct approach and with which I agree for the reasons which I have sought to explain. Dr. Morton on the other hand adopted the approach advocated by Mr. Willems; and so he approached the claimant's capacity on the basis of her ability to deal with any decision which might be required of her if the litigation had been conducted differently and not merely her ability to deal with the events leading up to the consent order.
92. Thus, Dr. Berry reached her conclusions by considering how the claimant appeared to understand matters when making the different decisions leading to the settlement on 7 January 2003. I found her reasoning and her conclusions to be logical and very convincing, that on the balance of probabilities the claimant had capacity to compromise her claim as she did with the benefit of repeated explanations. In addition I should add for the purpose of completeness that this conclusion is also supported by some additional factors.
93. First, the claimant had a relatively well-preserved working memory, which refers to her ability to retain and manipulate information within immediate memory. Second, Dr. Berry explained that the claimant had understood the effect of the consent order as she had expressed unhappiness at the same time as accepting the advice to settle; and she explained that in order to express unhappiness, it was necessary that the claimant had an ability to understand what the settlement meant. Third, Dr. Morton had explained in his 2002 report that the claimant has shown both an ability to learn when information was repeatedly presented in a structured way and also that she has an intact non verbal memory. Finally, it is noteworthy that the claimant was able to live by herself and to make the usual decisions that are expected of somebody in that position. I should also add that I cannot accept Mr. Willems' submission that because Dr. Morton saw the claimant in 2002, his conclusions have additional weight: that contention fails to appreciate that the 2002 report did not deal with capacity.
94. Dr. Morton's reports, on the other hand, suffer from the draw back that they do not include the crucially important detailed analysis of the attendance note or any account in the witness statements of what actually happened in the events leading to the settlement on 7 January 2003. Instead he relied on a series of tests but they do not take into account important facts such as that the claimant was repeatedly given explanations when she initially struggled with matters; and that these explanations came initially from counsel; and then first from Mr. Marsh, second from Mr. Burton, who was a representative of the Barnsley Advocacy Service, and third from her son's girl friend Carol Rogers. As I understood it, none of the tests carried out by Dr. Morton on the claimant showed how the claimant would have reacted if given these numerous and repeated explanations and whether they would have compensated for her mental deficiencies.
95. In fairness, when the attendance note was put to Dr. Morton in cross-examination, he accepted that some pieces of advice and information could have been laid down in the claimant's memory if presented in a structured and repetitive way. It seems that at the end he doubted if the claimant could have reached a proper decision. Nevertheless, he failed to show on the balance of probabilities that the presumption of capacity was rebutted and that the claimant lacked capacity to compromise her claim: I felt that he had been over-influenced by the tests he had carried out but which did not deal with the actual decisions confronting the claimant on 7 January 2003 in the light of the repeated explanations which were being given to her.
96. I have no hesitation in concluding the evidence of Dr. Berry satisfies me that on the balance of probabilities that the claimant had capacity to enter into the compromise agreement. Even if I am wrong (in a finding based on Dr. Berry's evidence), I should add that, although Dr. Morton produced a careful report and gave clear evidence, his evidence would not satisfy me on the balance of probabilities that the presumption of capacity should be rebutted in relation to the compromise agreement principally because he, unlike Dr. Berry, did not address his evidence to the right questions.

(vii) Conclusions on Capacity

97. It is common ground that there is a presumption in favour of capacity. As I have explained, the evidence of Professor Wilkinson and Dr. Berry whether considered individually or cumulatively satisfy me that the presumption in favour of the claimant's capacity in respect of the events leading up to the settlement has not been rebutted.

VI. Conclusions

98. My conclusions therefore are that notwithstanding the arguments of Mr Willems :-

a) In response to issue 2 (a) and (b), in determining if the consent order made on 7 January 2003 might be set aside on grounds of lack of capacity and in considering the issue of capacity historically rather than prospectively, the court should confine itself fundamentally to examining the decisions in fact required of the claimant in this action. It should not expand its considerations to include decisions which might have been required if the litigation had been conducted differently;

b) In response to issue 3 (a), in the light of the fact that the practical issue in this case is agreed to be confined to whether the claimant had capacity to enter the compromise agreement on 7 January 2003, the presumption that the claimant had capacity to enter that agreement is not rebutted on the evidence; and

c) In response to issue 5, the issue of the application of CPR 21.10(1) to the facts of this case is to be adjourned with liberty to all parties to apply.

99. Everybody who knows of this case must have sympathy for the claimant as this claim of hers, relating as it does to an accident in 1999, should have been resolved by a court decision or a compromise many years ago; and, irrespective of my decision, there is bound to be further litigation. The claimant has the consolation of two factors. First, her counsel has put forward every argument that could be put forward on her behalf. Second, she has the consolation of being able to pursue her outstanding claim for professional negligence against her former solicitors and counsel. I know little about that claim but there will no doubt be some serious issues to be considered as to why her claim in the original action against the defendant did not include other heads of claim.