Before proceedings, the plaintiff widow accepted the defendants’ offer to settle her and her infant son’s Fatal Accidents Acts claim ‘subject to the approval of the court’. A summons was then issued for the court to approve that settlement. The plaintiff, unknown to the solicitors on either side, remarried. The master approved the settlement but, before the consent order had been drawn up, the defendant’s learned of the remarriage and applied to set the order aside. The master agreed.
Held: There were two issues: was the settlement agreement prior to its approval binding on the parties or could either side repudiate? Second, even if it was not binding, was it correct to set aside his consent order rather than draw it up? Both points were decided against the plaintiff, the first because that was held to be the true effect of Order 80, r11; the second because the defendants’ consent to the court’s approval of the settlement had been induced by an innocent misrepresentation.
Lord Pearson said: ‘There was a suggestion made in the course of the argument that the Compromise Rule, if it meant what it appears to say – if ‘invalid’ means ‘of no legal effect’ – is ultra vires. I do not accept that suggestion. When the claim of an infant or other person under disability is before the court, the court needs, for the purpose of protecting his interest, full control over any settlement compromising his claim. In my view, the making and re-making of the Compromise Rule were valid exercises of the rule-making power under the Judicature Acts, which is now contained in section 99 of the Act of 1925 . . . The compromise rule is the vital one here. . . In my view, ‘not valid’ means having no legal effect. The settlement, so far as it related to the pounds 9,250, in which the infant was interested, was only a proposed settlement until the court approved it. Either party could lawfully have repudiated it at any time before the court approved it. It had no validity by virtue of the parties’ agreement in the August settlement. That which might have given it validity would have been an order made by the master with the effective consent of the parties . . ‘
Lord Morris of Borth-y-Gest said: ‘In my view, there was no binding agreement made in August. If in the present case a writ had first been issued and if thereafter there had been discussions leading to agreement, such agreement would have lacked validity unless and until the approval of the court was given. This is made clear by RSC Ord 80, r11 . . The present case came within the provisions of Order 11, r12 . . When . . the originating summons was taken out it made a ‘claim’ on behalf of a person under disability (ie the infant . . [T]he agreement ‘for the settlement of the claim’ would depend for its validity upon obtaining approval of the court. [p183] . . If the court’s approval were given, a binding agreement would result upon the basis of which certain directions could be given by the court.’
Lord Morris of Borth-y-Gest, Lord Pearson.
[1969] 1 AC 170
Rules of The Supreme Court, judicature Act 1925 99
England and Wales
Cited by:
Cited – Drinkall (A Minor Who Sues By Her Mother and Litigation Friend) v Whitwood CA 6-Nov-2003
The claimant, a child, had sought damages. An agreement was made to compromise the claim. Later the child sought to withdraw from it.
Held: No court order had been made to approve the compromise, and therefore no binding arrangement existed. . .
Cited – Bailey v Warre CA 7-Feb-2006
The claimant had been severely injured in a road traffic accident. His claim was compromised and embodied in a court order, but later a question was raised as to whether he had had mental capacity at the time to make the compromise he had.
Cited – Sharland v Sharland SC 14-Oct-2015
The Court considered the impact of fraud upon a financial settlement agreed between divorcing parties where that agreement is later embodied in a court order? Does ‘fraud unravel all’, as is normally the case when agreements are embodied in court . .
Cited – Dunhill v Burgin SC 12-Mar-2014
Lack of Capacity – Effect on Proceedings
The Court was asked ‘First, what is the test for deciding whether a person lacks the mental capacity to conduct legal proceedings on her own behalf (in which case the Civil Procedure Rules require that she has a litigation friend to conduct the . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 August 2021; Ref: scu.188679
