Judgment was handed down by the Court of Appeal today in Evans v Betesh Partnership and McGinty. Howard Elgot acted for the Betesh Partnership. The Master of the Rolls, Sir Geoffrey Vos, gave the leading judgment.
The Claimant had been represented by the Betesh Partnership and Robert McGinty, a barrister, in a road traffic claim which settled for £100,000. Many years later the Claimant found new solicitors and alleged that the settlement was invalid because she did not have litigation capacity as at the date of settlement, and that the court had not approved the settlement.
The appeal was compromised on the second day. Because of the importance of the case, the Court of Appeal asked for further argument on the issues after the compromise had been reached, meaning a judgment could be handed down after full argument. On Friday 30th July, the judgment was handed down.
The compromise reached was that the solicitor defendants and the barrister defendant would provide an indemnity as to the costs of the claimant in the pursuit of the driver who had injured her, limited to the issue of the validity of the original settlement.
It is important to realise that this was a solution that the court had no power to impose on the parties and the Court of Appeal noted that, but for the compromise, the situation between the parties to the appeal would have been “intractable” as set out in the paragraph 34 of the judgment below. The Master of the Rolls stated that:-
5. Before us, the barrister and the firm supported the judge’s reasoning, and argued that there was simply no sustainable pleaded claim. Ms Evans had not suffered any loss of the chance that she might have recovered more damages from the driver, because it was still open to her, on her own case, to do so. We were told that this would be the first case of which counsel for the defendants were aware in which a professional negligence claim had been allowed to proceed in such circumstances. The “normal practice” was for the professional negligence claim to be stayed whilst the application to re-open the personal injury settlement took place, as had happened in Dunhill v. W Brooks & Co (a firm)  EWHC 165 (QB),  EWCA Civ 505 and Dunhill v. Burgin  1 WLR 933. Indeed, the firm pointed to the unsatisfactory possibility that, whatever the outcome of these proceedings, Ms Evans would still, in theory, be able to seek to re-open the settlement at any stage in the future, since no limitation period applies to such an application. That possibility made it all the more crucial for the question of Ms Evans’s capacity as at November 2011 to be decided before these proceedings were concluded.
32. It might have suited Ms Evans to argue that she did have capacity in 2011, had it not been for the views expressed by Professor Wood. Had she done so, the judge would not have struck out the claim and the defendants would have accepted that she had pleaded a reasonable claim for substantive loss, even if they might have quarrelled with the allegation that the defendants ought to have investigated whether she had capacity. As it seems to me, however, that allegation by itself would be unlikely to lead to substantial damages.
33. Conversely, as appeared in the course of Mr Elgot’s submissions for the firm, it looked likely that the defendants would ultimately argue, if there were a trial of these proceedings before any application to re-open the settlement, that Ms Evans did not have capacity. In that way, it could submit, as it has done before us, that Ms Evans had either suffered no loss because she could have re-opened the settlement or, at best, suffered very little loss for that reason.
34. It was this dichotomy that led the court to suggest the indemnity that has now been agreed, and the stay that has now been agreed. This approach is, and always was, the obviously pragmatic solution to an otherwise intractable situation – as the judge also effectively recognised.
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