PI Brief Update

'Good Discharge': The Importance of Obtaining Court Approval for Child Settlements - Amy Lanham Coles, Temple Garden Chambers

14/12/23. Bayless v Norfolk and Norwich University Hospitals NHS Foundation Trust [2023] EWHC 2986 (KB)

This dispute arose following the death of a 42-year old father of two whose wife and children had witnessed his death on 24 April 2016. The NHS, who had treated Mr Bayless just days prior to his death, admitted they had negligently failed to diagnose and treat an acute type A aortic dissection.

His widow first sought to resolve a Fatal Accidents claim, particularised as follows:

• Claims on behalf of the estate under Law Reform (Miscellaneous Provisions) Act 1934 for funeral expenses and Mr Bayless' pain, suffering and loss of amenity and care before his death.
• His widow’s statutory claim under the Fatal Accidents Act 1976 for a bereavement award.
• Claims for loss of dependency under the 1976 Act for both his widow and children.

By a Part 36 offer made on 29 August 2019, the Trust offered to settle the claim for £340,000. This offer was accepted on 2 September 2019 but there was a failure to obtain court approval before this was paid by the Defendant, or indeed at all. This was an oversight, being required under Part 21 of the Civil Procedure Rules because the offer comprised a dependency claim for the children who were both under 18 years old.

On 8 December 2022, the Claimant and her children then issued further proceedings arising out of the death, as secondary victims for psychiatric injury. The Claimant pleaded that she had not been aware that she had suffered psychiatric injury until April 2020 when she was diagnosed with PTSD.

In response to this second claim, the Trust sought an order striking out Mrs Bayless's claim as an abuse of process on two grounds. Firstly, they argued Mrs Bayless's claim had been settled by virtue of the 2019 settlement. Secondly, they argued her second claim constituted an abuse of process under the rule in Henderson v Henderson.

However, shortly before the application was to be heard, the Defendant discovered that the 2019 settlement had not received court approval and was therefore not binding. It was common ground that the 2019 lump sum settlement could not be severed such that Mrs Bayless’ claim had in fact been validly settled (paragraph 10). Accordingly, the Defendant sought to withdraw the application, as it was bound to fail. The question for the court was whether the Claimants ought to recover their costs of the application or there should be no order as to costs.

The Defendant argued they had acted reasonably in bringing the strike out application – maintaining that the absence of court approval had only been discovered by the Defendants just prior to the application hearing and that this was an omission by the Claimants’ solicitors rather than the Defendants (paragraph 11). The Claimants refuted this and noted that Mrs Bayless had acted in good faith in bringing a later personal injury claim where her psychiatric injury was not known to her at the time of the 2019 settlement.

JUDGMENT

Pepperall J gave short shrift to the idea that the Defendant had latterly discovered there had been a failure to obtain court approval. They should not have assumed it had been done and indeed would have been notified by Part 8 proceedings had it been done (paragraph 15). The Defendant had therefore paid out the 2019 settlement sum “without obtaining good discharge” and this oversight put them at risk (paragraph 15). Their strike out application was bound to fail on this basis.

Secondly, Pepperall J refuted that Mrs Bayless’ further claim for psychiatric injury was an abuse of process. He noted that no personal injury claim was asserted by her in correspondence leading up to the 2019 settlement and accepted that she was not aware at the time of that settlement of the basis for any claim for psychiatric harm (paragraph 17). Accordingly, the Defendant’s strike out application was equally bound to fail on this basis.

In light of this, he ordered that the Defendant pay the Claimants the costs of the application on the standard basis (paragraph 18).

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