Determining capacity with one (judicial) hand tied behind your back

In King v The Wright Roofing Company Ltd [2020] EWHC 2129 (QB), a personal injury case, Kerr J had to decide whether the claimant had capacity to conduct the proceedings, and whether he had capacity to manage his property and affairs.

The factual background is somewhat complex, but its very complexity is at the heart of the issue, and set up a position where the judge had a seemingly overwhelming number of obstacles to overcome to answer the questions before him.

The defendant had admitted liability (subject to contributory negligence) after the claimant, a roofer by trade, fell from a roof and suffered a severe head injury, and other serious injuries, falling from a roof in March 2016. The claimant had only partially recovered from the accident. He could not longer work, has lost his income and had been living off the interim payments and beyond them, running up debts including to his parents with whom he had been living since before the accident. He had taken five or six holidays in the Dominican Republic, funded by interim payments.

The claimant issued the claim in March 2019 as a protected party, with a litigation friend. In its defence, the defendant denied that he lacked capacity to litigate and manage his financial affairs. These issues therefore came before Kerr J as preliminary issues.

The claimant did not give evidence but, the court was told, regarded himself as having capacity to litigate and manage his finances. He mistrusted his solicitors and others involved in the claim on his side. He was weary of and exasperated with the litigation. He had approached the defendant’s insurers, bypassing his solicitors, with a view to reaching a settlement directly with the insurers. He had also made cynical remarks indicating that he regarding the litigation process as a money spinner for the professionals involved. They were, he maintained, exploiting his claim and being paid out of his compensation money. He had also expressed a desire to buy a property and settle in the Dominican Republic, where he said he had friends.

The claimant’s solicitors were receiving instructions from the litigation friend. With the approval of the court, they were withholding certain interim payments from the claimant, wishing to protect him from squandering them. The Court of Protection appointed two deputies in February 2020 to manage his finances. The claimant’s litigation friend and solicitors asserted that he did not have capacity to litigate this claim or manage the compensation he receives from it, applying the tests in the MCA 2005. They were concerned that he would “under-settle” the claim, squander the fruits of it and become unable to pay for the care he needs and will need for the rest of his life.

A trial on contributory negligence and quantum was scheduled to take place in a window from January to April 2021, i.e. at least 6 and potentially 9 months away. An offer or offers of settlement under CPR Part 36 had been made and rejected, but the judge did not know when and in what amounts. As he observed (at paragraph 9): “[e]ven if I did, I would be in no position to assess whether they are, objectively good, bad or indifferent from the claimant’s perspective.”

The evidence was voluminous, including both lay and expert. The judge was concerned about the fact that he did not hear directly from the claimant, noting at paragraph 119 that:

The claimant, however, was not called by either party so I did not, unfortunately, hear from him directly. I understand he was aware that the hearing was taking place and was not willing to provide a statement. I am not privy to any privileged discussions with him about whether it would be a good idea for him to give evidence. I can see why neither side might want to risk calling him but it concerns me that, while all the experts have met him, I have not.

Kerr J found the case a “worrying” one (paragraph 123), for several reasons.

First, relations between the claimant and his representatives were poor and, at or near the point of breaking down. With his former case manager, they have already broken down. With his litigation friend, his former partner, his relations were now very difficult. Kerr J did not criticise her, but noted that she clearly did not command the claimant’s confidence nor, in turn, did the solicitors who received her instructions.   This in turn, meant that his Counsel was put in difficulty properly representing his interests in court before me. As Kerr J noted (at paragraph 125), “[s]he is right, indeed obliged, to argue for the position of the litigation friend, supported by the solicitors but not by her ultimate client.” But, he asked, this meant:

126. Who, then, truly represents the claimant’s viewpoint before me? The only party supporting his position is, paradoxically, his opponent in the underlying litigation. The interest of the defendant in the underlying claim is directly opposed to that of the claimant. It is no criticism of the defendant to say that it has a financial interest in the claimant settling the claim “fast and low”.

Second, Kerr J was very concerned at the costs of the satellite litigation concerning the claimant’s capacity:

127. Could not a joint expert on capacity have been appointed? Were four experts and six reports really needed? The directions hearings were attended by two counsel, again at considerable expense. Who is going to pay the costs of all these reports, the deputies, the Court of Protection application and the fees of solicitors and counsel?

128. Would it be fair for these costs to come out of the claimant’s compensation if the defendant is right that he has capacity to litigate and manage his own finances? This is, of course, a question for me if and when that outcome is reached, but it is concerning that the claimant is, apparently, supportive of an outcome that could lead to a costs order that eats into his damages.

129. Viewed in that light, the claimant’s suspicions that the professionals may gain financially at his expense are not as fanciful as they might seem. Dr Toone’s description of his suspicions as close to “pathological” ought to imply that they are groundless, but it is not certain that they are.

130. The litigation friend and advisers had no choice but to act in what they consider the claimant’s best interests, but that includes doing so at proportionate cost. It is obviously concerning to the claimant that his representatives are spending money on opposing his views and it is right that the money spent could, in principle (though it may be unlikely), deplete the net amount of compensation he eventually receives.

Third, the claimant’s approach to the defendant’s insurers, “while unorthodox and obviously inappropriate, [did] not lack a certain logic” (paragraph 131):

If the claimant and the defendant are right, the litigation friend and solicitors may have allowed the action to become mired in unnecessary cost and delay. And it is not necessarily wrong to reason that a bird in hand may be worth two in the bush.

A fourth difficulty was that:

132. […] The content of the claimant’s discussions with Mr Anderson, of the defendant’s insurers, is probably relevant to the capacity issues I have to decide; but the conversations surely took place behind the “without prejudice” curtain. The claimant’s privilege cannot reasonably be waived by his representatives even if the defendant were willing to waive privilege on its side.

Against the backdrop of those difficulties, and after a discussion which is striking for its thoroughness, and merits reading in its full for its clear agonising over the position, Kerr J concluded that:

162. […] the present circumstances including the claimant’s absence from court make it difficult to judge his capacity. The breakdown of relations between him and his advisers and the strained relations with his litigation friend are inhibiting the court from deciding the issues on the basis of the best available evidence. Doing the best I can, I am just persuaded that absence of capacity on both counts is at present proved on the balance of probabilities.

Kerr J then turned to case management. He laid down a marker, inter alia, that it was a “serious question of case management” as to whether he could or should require the claimant to attend and give evidence, or at least require his solicitors to convey to, the court’s request to do so. He noted that it was an “open question” whether the court had the power to call a witness called by neither party.

He also noted that there was still time to change the litigation friend, either by consent or by order of the court. As he noted:

173. Difficulties in managing cases such as this fairly and effectively may arise where it is the defendant’s admitted tort that has, or may have, changed the victim’s personality in such a way that he acquires a propensity to under-settle the claim. The law appears to permit the wrongdoer to take advantage of this by agreeing to settle the claim at less than its true value, in its own interest.

174. This is subject to the doctrine of undue influence and fiduciary duties that may be owed to vulnerable persons (cf. Masterman-Lister v. Brutton & Co (Nos 1 and 2) [2003] 1 WLR 1511, CA, per Chadwick LJ at [78]). But rather than have to resort to such doctrines, it is better for the claimant’s interests to be protected by effective representation by persons in whom, even if lacking capacity, he has confidence.

Comment

This is a fact-specific decision but Kerr J’s judgment alighted upon a number of important points of difficulty that are unlikely to be limited to this case alone, including as to the delicate position occupied by a litigation friend in circumstances where (as so often) the absence of capacity does not mean the absence of strong feelings on the part of the protected party. And he chose his words with care, no doubt, when identifying that the claimant might be said to have a point that the litigation appeared to have gained a life of its own which on its face did not appear to be of direct benefit to him.

Finally, and although it did not feature heavily in the discussion, the case is of some interest for highlighting the evidence of a neuropsychologist, Dr Carter-Allison, who carried out a clinic based cognitive assessment as part of the claimant’s rehabilitation programme. She reported on 12 August. This included a “multiple errands task” carried out in Bexleyheath town centre by Dr Carter-Allison and a specialist occupational therapist. This test, as Dr Carter-Allison explained in her report, “evaluates the effect of executive function deficits on everyday functioning through a number of real-world tasks” such as shopping and writing down information. Such observational evidence is vital in the assessment of the situation where a person is said to lack capacity because of executive dysfunction, and this reminds us that in such a situation, a final determination can only be reached by combining assessment by interview and assessment by observation (see also here our guidance note on capacity assessment).

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2 Replies to “Determining capacity with one (judicial) hand tied behind your back

    1. (With apologies for delay – I have been away). It was conducted by a neuro-psychologist as part of his rehabilitation programme. It does not appear from the judgment that the local authority was involved.

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