Roult v North West Strategic Health Authority

This is a claimant’s interlocutory appeal in a personal injury case. The issue is the extent to which the claimant is bound by the terms of a prior settlement, approved by the Court. It is his contention that CPR 3.1(7) permits the court to revoke or vary the approval given, and that the judge was wrong to refuse to do so.

The claimant’s action arises from a birth injury in which he was starved of oxygen leading to a particular form of cerebral palsy. Like many such cases his history inspires only acute sympathy for the effect on the lives of both him and his parents, who have acted as his carers throughout his life. He was born on 14 November 1987 and so is now 21. He is severely disabled because of lack of brain development. He functions very roughly at the age of 4 or a little more, and he exhibits a significant degree of disruptive and challenging behaviour. He is incapable of looking after himself, and for the purposes of litigation is, inevitably, a patient. Liability is not in issue. As always in such cases, the costs of his future care will constitute a very large element of his claim. How and where he might over the years be cared for, and by whom, are all matters which are critical to the calculation of his claim.

He has lived all his life with his parents. It is perhaps unsurprising that they have, as his full time carers, become over-protective of him. One consequence of that is, for example, that he has become manipulative, particularly of his mother. His behaviour is significantly worse when she is there to be manipulated by it. The details do not matter for present purposes but are uncomfortable. Moreover, his parents each have health difficulties of their own. Even without these factors it would be likely that the professional opinion of all who have been consulted would be that it would be better for him if he were to be cared for somewhere other than full time in the family home. That is the unanimous opinion in this case. That is a development which, for understandable reasons, his parents, and especially his father, have found very difficult to accept.

The claimant’s action was begun in the Summer of 2005, when he was coming up to 18. Liability had already been conceded in correspondence. By the closing months of 2006, the trial of the quantum issue was imminent, being listed for January 2007. Two meetings between the lawyers on either side took place in September and December 2006. A partial settlement was achieved. The careful and full opinion of leading counsel for the claimant, written for the purposes of being put before the Judge so that he could consider whether to approve the settlement, set out the position. Until mid August 2006 the parents had felt unable to agree to any, even temporary, placement of the claimant in a residential school, notwithstanding the advantages which some socialisation was likely to bring. But then they did agree to it, and it was, by January 2007, expected that he would go to one or other such school for about two years until the end of the academic year in which he was 21. For the future after that, the parents had until about the same time resisted professional advice that the claimant’s best interests lay in living in a small group home, with perhaps 2 or 3 other disabled people and a dedicated care team, provided by the Local Authority. The claim as to quantum had accordingly been set out by counsel in a detailed schedule which included claims based on the assumption that in the long term the claimant would be cared for in a home of his own, which would have to be bought, and in which he would need full time care staff. The costing of such a claim is complicated, but conventional, and the considerations applying to an award on such a basis are well known to the courts. However, by the time of the meetings, the position had changed. Counsel put it in this way in his opinion:

“Until as late as 15 August 2006, the family were adamant that they did not want Greg, when an adult and on finishing school, to go into a group home run by the local authority – they much preferred that Greg should go into his own home supported by an independent care team – indeed it is this option that has been costed for in the referred to Schedule. Nevertheless, as the family has gained greater insight into Greg’s needs as an adult, they now recognise that a group home, whilst not an ideal solution in all respects, probably does give Greg the best chance of an enjoyable and fulfilling life with greater social interaction with other young men cared for, in the group home support network. So it was, that in readiness for the JSM.1 [first joint settlement meeting], I initially sought to argue on Greg’s behalf the case against the group home whereas in fact by the time of JSM.1 and following a conference with Angela [mother] on 15 August 2006 it was recognised that the group home offered the best options for Greg and JSM.1 proceeded on that basis.”

Consistently with this approach, when he came to set out the various heads of claim, counsel said of the subheading “Accommodation”:

“The whole of this claim obviously fell, once the family decided the group home was the way forward.”

The Judge was presented with a separate draft schedule to the order in two parts, the first (Schedule 1) comprising heads of claim which had been settled and the second (Schedule 2) those which had yet to be quantified. The first part included accommodation, which was valued at nil, precisely because it was accepted that a Group Home would be reasonable, indeed the best, provision for the claimant’s care. The second part included ‘costs of future care’ because the costs of a Group Home were thought to have a number of unresolved uncertainties about them. But it itself made clear the same basis of approach, because it listed for subsequent calculation the costs of a Local Authority Group Home. For all these reasons it was absolutely plain that the settlement was on the basis that care in such a Group Home was appropriate to the needs of the claimant. The Judge held that it had been made plain to him that the claimant would be proceeding to a Group Home and that

“nobody concerned can have supposed or understood that what was reserved for future consideration was the possible care costs associated with going into an individual home”

There is no appeal against that finding. The agreement was that the right approach to future care was that the claimant’s needs were such as would be met by being looked after in a Local Authority Group Home and not in privately obtained accommodation on his own. In that, the agreement benefited the defendants, because the cost of privately obtained accommodation and constant solitary care would have been much greater. But the settlement also had advantages for the claimant. A trial was avoided, which would otherwise have been imminent, other items were negotiated as a package, and time was obtained for further investigation of the costs inherent in Group Home care, whereas it may well be that the evidence the claimant sought would not have been available if the trial had gone ahead immediately.

On what would have been the first day of the trial, the Judge gave his approval. Because it was a partial settlement it was not approval to a money judgment but rather to the terms of the agreement. The order took the form of (i) reciting that the agreement was approved, (ii) ordering that the Schedule 1 heads of loss be valued in the defined sum of £904,567, with interest to run until payment, and (iii) ordering that the Schedule 2 heads of loss be adjourned, that is to say for quantification by subsequent trial or further agreement.

That was on 22 January 2007. Procedurally the next step which occurred was that in May or June 2008 the claimant served a revised schedule of his outstanding claim. It sought damages for future care in privately obtained accommodation with privately engaged dedicated carers. The Defendants took exception to this because of the previous settlement and approval and it was they who sought referral back to the court of the issue whether the claimant could pursue such a claim. On 17 November 2008, Christopher Clarke J, who had given approval to the original partial settlement, was asked to determine as a preliminary issue whether it was open to him to do so.

What had happened was not put in evidence, and is less than wholly agreed. But it was common ground that in July 2007 the claimant moved into a Local Authority Group Home but was removed after a very short time, it would seem some few days, by his parents. Their view was and has since remained that the home was unsuitable and that such a home always will be. As I understand it, the defendants would say that it was insufficiently, if not scarcely, tried, and that such a view is wrong. Neither side sought to call any evidence. The application was put to the Judge on the basis that it is now the claimant’s case that a Group Home will be unsuitable and that his needs for future care should be quantified on the basis of the cost of privately provided accommodation and care staff.

CPR 3.1 is headed: “The court’s general powers of management”. By subparagraph (1) the various powers listed are stated to be in addition to any other powers which the court has, whether by statute, rule or otherwise. The powers listed in subparagraph (2) are typical case management powers such as varying time limits, adjourning hearings, conducting hearings by telephone, joining or separating trials and the like. Subparagraph (7) then provides as follows:

“(7)

A power of the court under these Rules to make an order includes a power to vary or revoke the order.”

On behalf of the Claimant Mr Grime QC (who did not appear on the application for approval in January 2007) contends that this power is a general one and thus extends to revoking or varying the order approving the settlement. He submits that the power can be exercised (i) where the original order was made on the basis of erroneous information (whether accidentally or deliberately given) but also (ii) where it has been followed by an unforeseen event which destroys the assumption on which it was made. He does not contend that the first situation applies here. But he says that the second does. The unforeseen event is said to be that an experiment with residence in a Group Home was made and failed because such accommodation was unsuitable to the claimant’s needs.

Mr Grime invites us to apply by analogy the jurisdiction exercised in a matrimonial ancillary relief case in Barder v Caluori [1988] 1 AC 20. In that case an ancillary relief order was made by consent. It provided for the husband to transfer his interest in the former matrimonial home to the wife. The undoubted basis for that order was that it would enable her to care for the children in what was already their home. Within two or three weeks of time for appealing expiring, the wife murdered the children and killed herself. The House of Lords held that in those remarkable circumstances the husband could properly be given leave to appeal out of time, despite the fact that the order had been made by consent. At 43B Lord Brandon set out the conditions for permitting such a course:

“The first condition is that new events have occurred since the making of the order which invalidate the basis or fundamental assumption upon which the order was made, so that, if leave to appeal out of time were to be given the appeal would be certain or very likely to succeed. The second condition is that the new events should have occurred within a relatively short time of the order having been made. While the length of time cannot be laid down precisely, I should regard it as extremely unlikely that it could be as much as a year and that in most cases it will be no more than a few months. The third condition is that the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case….The fourth condition is that the grant of leave to appeal out of time should not prejudice third parties who have acquired, in good faith and for valuable consideration, interests in property which is the subject matter of the relevant order.”

Those conditions have been applied in a number of matrimonial cases since. In one of them, S v S [2002] 3 WLR 1372, Bracewell J held that the first condition imports the requirement that the new event be not only unforeseen but unforeseeable, since if it was foreseeable at the time, it cannot be the kind of extraneous supervening event which can be said to destroy the basis of the original order. Mr Grime accepts that additional qualification.

Although its application is relatively rare, this jurisdiction has been accepted in a number of family cases. There has been and remains considerable debate about the procedural route to invoking it. There is no doubt that it can be invoked, as in Barder itself, by an application for leave to appeal out of time on the basis of fresh evidence, at least so long as the right of appeal is not, as in some instances it is, limited to orders to which the appellant did not consent. The view has at times been expressed that it can also be invoked, in a family case, by means of an application to the original trial Judge, relying either on Order 37 r 1 of the County Court Rules, or on the inherent jurisdiction of the Judge. The procedural battlefield is referred to by Bracewell J in S v S and surveyed more fully by Ward LJ in Harris (Manahan) v Manahan [1996] 4 All ER 454. What is certain is that this jurisdiction in family cases, whatever it may precisely be, can owe nothing to CPR 3.1(7). That rule was not in existence at the time of most of the cases, and had no precursor in the Rules of the Supreme Court. More importantly, the CPR have never applied to family proceedings: see CPR 2.2. Moreover CCR O 37 r 1 provides in the county court an explicit power to rehear a case which does not exist in the High Court.

Mr Grime was unable to suggest that there was any authority for the application of such a jurisdiction to reconsider a consent order in any field other than ancillary relief in family cases. His contention is, however, that the words of Rule 3.1(7) are wide enough to cover the case, that the overriding objective of the CPR requires that the rule be interpreted flexibly so as to do justice which might be denied to the claimant if his damages had to be assessed on a basis falsified by events, and that Barder v Caluori is founded on principle capable of wide application.

There is scant authority upon Rule 3.1(7) but such as exists is unanimous in holding that it cannot constitute a power in a judge to hear an appeal from himself in respect of a final order. Neuberger J said as much in Customs & Excise v Anchor Foods (No 3) [1999] EWHC 834 (Ch). So did Patten J in Lloyds Investment (Scandinavia) Ltd v Ager-Hanssen [2003] EWHC 1740 (Ch). His general approach was approved by this court, in the context of case management decisions, in Collier v Williams [2006] EWCA Civ 20. I agree that in its terms the rule is not expressly confined to procedural orders. Like Patten J in Ager-Hanssen I would not attempt any exhaustive classification of the circumstances in which it may be proper to invoke it. I am however in no doubt that CPR 3.1(7) cannot bear the weight which Mr Grime’s argument seeks to place upon it. If it could, it would come close to permitting any party to ask any judge to review his own decision and, in effect, to hear an appeal from himself, on the basis of some subsequent event. It would certainly permit any party to ask the judge to review his own decision when it is not suggested that he made any error. It may well be that, in the context of essentially case management decisions, the grounds for invoking the rule will generally fall into one or other of the two categories of (i) erroneous information at the time of the original order or (ii) subsequent event destroying the basis on which it was made. The exigencies of case management may well call for a variation in planning from time to time in the light of developments. There may possibly be examples of non-procedural but continuing orders which may call for revocation or variation as they continue – an interlocutory injunction may be one. But it does not follow that wherever one or other of the two assertions mentioned (erroneous information and subsequent event) can be made, then any party can return to the trial judge and ask him to re-open any decision. In particular, it does not follow, I have no doubt, where the judge’s order is a final one disposing of the case, whether in whole or in part. And it especially does not apply where the order is founded upon a settlement agreed between the parties after the most detailed and highly skilled advice. The interests of justice, and of litigants generally, require that a final order remains such unless proper grounds for appeal exist.

This order was a final disposal of many of the issues between the parties. It was in no sense a case management order, and the fact that there remained other issues which did need managing towards future disposal does not alter that position. It gave approval to a settlement agreed between the parties. The settlement was reached nearly 19 years after the original cause of action arose. It followed line by line consideration of the case by leading counsel on either side. The process of approval of settlements is as much for the benefit of protected claimants as it is for that of defendants. It is, as this court explained in Masterman-Lister v Brutton [2003] 1 WLR 1511, in an important respect a facilitative power. Without it, no protected party’s claim could ever be settled, because the settlement would remain voidable. It is emphatically not in the interests of vulnerable parties that their cases should unnecessarily be forced into the trauma, expense and uncertainty of a trial. When settlement is not only achieved but approved by the court, CPR 3.1(7) cannot be employed to undo the order.

For the defendants Mr Westcott QC contends that there is a further important difference between a consent order in a matrimonial ancillary relief case and approval given to settlement of a protected party’s claim and that it prevents the application of the Barder principles to the latter. It is trite law that in ancillary relief the legal effect of a consent order derives not from the agreement of the parties but from the exercise by the court of its statutory jurisdiction to make appropriate orders for ancillary relief: see, amongst many cases, de Lasala v de Lasala [1980] AC 546 at 560E per Lord Diplock and Thwaite v Thwaite [1981] 3 WLR 96 at 101B per Ormrod LJ. That is consistent with the long-standing rule that a financial agreement between spouses cannot oust the jurisdiction of the court and can be varied by the court – rules now embodied in section 34 Matrimonial Causes Act 1973. Says Mr Westcott, a settlement such as the present differs. It derives its legal effect from the contract made between the parties, for good consideration. Where one of the parties is a protected person, as here, the contract is voidable unless and until approved by the court under CPR 21.10, but, says Mr Westcott, once that approval is given there is a binding contract. This distinction appealed to the judge, but with great respect to his reasoning I would not decide this case on that basis. In both the ancillary relief case and the approval of settlement case, the court is being asked to exercise its independent judgment as to the fairness and propriety of the proposed consent order. In both instances, the agreement of the parties is ineffective to resolve their affairs until the court rules. The distinction between a contract which is not binding until approved by the court and one which is replaced by an order of the court is a fine one and does not seem to me to be a sufficient reason, by itself, for holding that the court should not revoke its approval in the first even if it be able to vary its order in the second.

However, for the reasons given above, I entirely agree with the judge’s conclusion that CPR 3.1(7) should not be used to revoke approval to a final settlement, whether of the whole or part of a claim.

The broader question of whether an order approving a settlement could ever be one in respect of which an appellate court would be justified in granting leave to appeal out of time if there had been either erroneous information given to the judge, or a supervening event had destroyed the basis on which he had made the order does not arise and accordingly we should not attempt to answer it in the abstract. Erroneous information is not suggested, but if it were to arise it might involve features such as fraud, mistake or misrepresentation which could be capable of vitiating the underlying contract of settlement and/or the approval, and the defendants did not contend otherwise. As to a Barder supervening event, I am in no doubt, though differing in this from the Judge, that even if the principles enunciated in that case could ever apply to an order approving settlement, whatever happened in this case is incapable of being such an event.

All serious personal injuries litigation involves an attempt to predict the future in order to quantify claims for future loss. The quantification of a care claim, as here, is perhaps the largest single example, but the same applies to the assessment of future career paths, lost future earnings and future expense of living, to name but three. What has happened in this case is not that there has been any event which destroys the basis of the order approving the settlement. The most that has happened is that in one (important) respect the prediction of the future has changed so far as the claimant’s parents are concerned. Whether they are right or wrong is necessarily uncertain. The Judge was prepared to proceed upon the assumption (without deciding) that at a future trial the claimant would be able to establish that he should be awarded damages based upon the cost of future care in privately provided accommodation. But even if he could now prove that, that would not be capable of being a new event shattering the basis of the settlement, which, like all such settlements, proceeded upon the best prediction of the future which could be made at the time. It was always foreseeable that the prediction might turn out to be erroneous; this is simply unavoidable. The financing of care homes might be changed fundamentally by government or other action. The claimant might be refused admission to the kind of care which had been anticipated. These uncertainties are inevitable in the settlement of any claim for future loss which is going to endure over many years. For that matter, medical advances or sudden fatal illness may, as everyone knows, unexpectedly falsify the predictions of expectation of life on which a settlement is based. I would moreover add that before any application for leave to appeal could be mounted on the basis of fresh evidence of a dramatic Barder-type event, the case must, as Lord Brandon held, be so clear that it is plain that such appeal would be certain or very likely to succeed. The right test therefore is not to be based on an assumption about disputed facts or the outcome of a hypothetical appeal; it must be clear that it would almost certainly succeed.

Those conclusions make it unnecessary to determine whether the claimant’s application to undo the settlement does or does not fail the third Barder condition, which requires prompt action when the event occurs. The Claimant did not take any procedural step in the action to make his application until, in effect, prompted by the defendants a year or so after the suggested event. But his lawyers had kept the defendants fully informed of what was happening and it was conceded that the latter had suffered no prejudice from the passage of time. The Judge was minded to hold that the application did not in those circumstances fail the third test, and for my part I would find it very difficult to say that he erred in any relevant matter of principle in so indicating.

It follows, however, that for the reasons set out above, I would dismiss this appeal.

I agree.

I also agree.