Court dismisses defendants' application to approve settlement against claimant's wishes

High Court dismisses defendants' application to approve settlement against claimant's wishes

In a notable decision, the High Court dismissed an application by the defendants, Craig Howson and Allianz Insurance Plc, to approve a settlement reached with the claimant, David Forsyth, against his wishes. The case revolved around the inherent jurisdiction of the court to approve settlements where there are doubts about the claimant's capacity to litigate.

The case arose from an accident on 1st February 2018, when Mr Forsyth, riding an e-bicycle, collided with Mr Howson's car, resulting in significant injuries, including a traumatic brain injury. Liability was determined in February 2022, with the court ruling that Mr Forsyth was entitled to 25% of the damages to be assessed.

In July 2024, the defendants made a Part 36 offer to settle the claim for £250,000. Despite advice from his legal team that the offer was too low, Mr Forsyth accepted it. The defendants sought court approval of the settlement, citing concerns about Mr Forsyth's capacity to manage his finances and the potential for the settlement to be overturned if he was later found to lack litigation capacity.

The court heard evidence from neuropsychology experts who agreed that Mr Forsyth most likely retained capacity to litigate, provided he received appropriate support. However, there was disagreement among experts about his financial capacity, with some expressing concerns about his ability to manage large sums of money.

Her Honour Judge Claire Evans, who presided over the case, noted that the application was unusual as it was not supported by the claimant. She highlighted that the evidence from medical experts consistently indicated that Mr Forsyth had litigation capacity. Judge Evans concluded that there was no good reason to invoke the court's inherent jurisdiction to approve the settlement, particularly as it was accepted against legal advice.

The judgment emphasised that approval proceedings are designed to protect the interests of protected parties and that invoking the inherent jurisdiction in this case was not appropriate. The court found that the defendants' concerns about the settlement being unpicked were outweighed by the claimant's opposition to the approval and the lack of evidence suggesting a need for such protection.

This decision underscores the court's cautious approach to approving settlements against a claimant's wishes, especially when the claimant is deemed to have litigation capacity. It also highlights the importance of legal advice in such proceedings and the protective nature of court approval processes.

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