- Bookmark
- Share
- CaseIQ
Masterman-Lister v Brutton & Co
Factual and Procedural Background
This opinion concerns an appeal by the claimant from a decision of Wright J on a preliminary issue regarding whether the claimant has been a "patient" within the meaning of RSC Order 80 and/or Part 21 of the CPR at any time since 8th September 1980, and if so, the periods during which the claimant was a patient. The trial of this issue was ordered on 29th March 2000 and judgment was delivered on 15th March 2002 following a hearing in January and February 2002.
The claimant, born on 24th July 1963, suffered severe injuries, including a head injury, in a motorcycle accident on 9th September 1980. He was hospitalized for over three months and returned to work in June 1981 performing only routine clerical tasks until resigning in March 1989. He has had minimal employment since. Litigation was commenced against the driver and employer responsible for the accident in December 1980, with the Statement of Claim served in September 1985. The claim was settled in September 1987 for £76,000 plus costs following negotiations and payments into court.
In 1993, the claimant issued proceedings against his former solicitors for negligence related to their conduct of the litigation, which the defendants contend is statute-barred. In 1997, the claimant was examined by a neuropsychiatric consultant who opined that the claimant had been a "patient" under the Mental Health Act 1983 since the accident. The claimant sought to re-open the original settlement on the basis that court approval required under RSC Order 80 had not been obtained. This led to the trial of the preliminary issue concerning the claimant’s status as a patient.
Legal Issues Presented
- Whether the claimant has been a "patient" within the meaning of RSC Order 80 and/or Part 21 of the CPR at any time since 8th September 1980.
- If so, the period or periods during which the claimant was a patient between 8th September 1980 and the date of the judgment.
- The correct legal test for capacity and its application to the claimant’s medical and other evidence.
- The effect of the claimant’s capacity status on the validity of the original settlement and subsequent litigation.
Arguments of the Parties
Appellant's Arguments
- The judge failed to properly consider the medical evidence of serious memory deficit, dysexecutive syndrome, and pain resulting from the claimant’s head injury.
- The judge focused incorrectly on outcomes and decisions made with parental support rather than the claimant’s actual decision-making capacity at relevant times.
- The judge did not adequately distinguish between the claimant’s ability to manage minor affairs and his alleged incapacity to manage more complex matters such as large sums of money.
- Insufficient weight was given to the claimant’s medical and lay witnesses, including his parents and friends.
- The judge over-relied on the claimant’s diaries and gave them too much weight compared to other evidence indicating impaired decision-making capacity.
Respondent's Arguments
- The judge correctly applied the legal test for capacity, considering the issue-specific nature of capacity and the evidence as a whole.
- The medical experts provided balanced evidence, with some disagreement, but the judge was entitled to prefer the majority view.
- The claimant demonstrated sufficient understanding and ability to manage his affairs, particularly since 1983, including managing finances and legal matters with or without assistance.
- The diaries and letters were properly considered as part of the overall evidence and were consistent with the judge’s conclusions.
- The original solicitors and other experienced lawyers did not consider the claimant to lack capacity, supporting the judge’s findings.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Re F (Mental Patient: Sterilisation) [1990] 2 AC 1 | Interpretation of "patient" and limitation of "property and affairs" to business and legal matters. | Confirmed that "property and affairs" excludes physical care and treatment and applies to legal and business matters relevant to capacity. |
| Winterwerp v Netherlands [1979] 2 EHRR 387 | Requirement of judicial procedure before deprivation of civil rights due to mental incapacity. | Highlighted the absence of judicial determination requirement in RSC Order 80 and CPR 21, suggesting courts should investigate capacity carefully. |
| White v Fell (unreported, 12 Nov 1987) | Issue-specific test of capacity related to managing one's affairs. | Adopted as appropriate test for capacity in personal injury litigation context. |
| Kirby v Leather [1965] 2 QB 367 | Definition of "unsound mind" for Limitation Act purposes and capacity to instruct solicitors and exercise judgment on settlements. | Supported the issue-specific capacity test and the importance of insight into mental condition. |
| In re Beaney, deceased [1978] 1 WLR 770 | Degree of understanding required for different transactions. | Confirmed that capacity varies with transaction complexity and importance. |
| In re C (Adult: Refusal of Treatment) [1994] 1 WLR 290 | Specific test for capacity to consent or refuse medical treatment. | Illustrated that capacity involves understanding, retention, and weighing of information in decision-making. |
| In re MB [1997] 2 FLR 426 | Definition of lack of capacity for medical treatment decisions. | Supported the requirement of comprehension, retention, and weighing of relevant information. |
| Bankes v Goodfellow [1870] LR 5 QB 549 | Capacity required to make a valid will. | Used as an example of issue-specific capacity test. |
| Molton v Camroux (1848-49) | Voidability of contracts made by persons lacking capacity when other party knows of incapacity. | Explained substantive law relating to contracts and capacity. |
| Imperial Loan Co Ltd v Stone [1892] 1 QB 599 | Voidability of contracts due to mental incapacity. | Reinforced principles on capacity and contractual validity. |
| Hart v O'Connor [1985] 1000 | Capacity and contract law principles. | Supported the substantive law on capacity and contracts. |
| Beal v Smith (1873) LR 9 Ch App 85 | Practice regarding persons of unsound mind suing by next friend. | Explained procedural protection for persons under disability. |
| Harwood v Baker (1840) 3 Moore 282 | Capacity required for testamentary dispositions. | Confirmed issue-specific understanding requirement. |
| Ball v Mallin (1829) 3 Bligh N.S. 1 | Capacity to execute voluntary deeds. | Affirmed the necessity of understanding nature and effect of the transaction. |
| Durham v Durham (1885) 10 PD 80 | Capacity to enter marriage contract. | Confirmed capacity test relative to the particular transaction. |
| Mason v Mason [1972] Fam 302 | Capacity to consent to divorce decree. | Illustrated capacity test in family law context. |
| In re K (Enduring Powers of Attorney), In re F [1988] Ch 310 | Capacity to understand and execute enduring powers of attorney. | Confirmed issue-specific capacity test and understanding of nature and effect. |
| In re W (Enduring Power of Attorney) [2001] Ch 609 | Approval of issue-specific capacity test. | Endorsed approach in In re K and In re F. |
| In re S (F G) (Mental Health Patient) [1973] 1 WLR 178 | Distinction between persons under disability and patients under Mental Health Act. | Clarified that procedural rules do not require judicial satisfaction of incapacity. |
Court's Reasoning and Analysis
The court carefully examined the legal definition of "patient" under RSC Order 80 and CPR Part 21, focusing on the requirement that incapacity must be due to mental disorder as defined by the Mental Health Act 1983 and specifically relates to incapacity to manage and administer property and affairs. The court emphasized the issue-specific nature of capacity, requiring assessment in relation to the particular legal transaction or litigation context.
The court reviewed extensive medical evidence, noting some disagreement among experts regarding the claimant's capacity. The judge was entitled to prefer the majority view that the claimant, despite a serious brain injury and cognitive impairments, retained sufficient capacity since about 1983 to manage his property and affairs, especially with assistance when necessary.
The court also considered non-medical evidence, such as the claimant's diaries, letters, and testimony from family and friends, and found that the judge had appropriately weighed this evidence in conjunction with medical reports. The judge distinguished between the claimant’s ability to manage routine affairs and more complex decisions, concluding that the claimant was capable of understanding and making decisions relevant to the litigation and settlement.
The court rejected the appellant's criticisms that the judge failed to properly analyze medical and lay evidence or focused improperly on outcomes rather than capacity. It was recognized that capacity must be assessed on a balance of probabilities and with regard to the complexity of the matters at issue, not by reference solely to the claimant’s vulnerabilities or risks of exploitation.
The court further noted that the absence of a judicial procedure to determine capacity under RSC Order 80 and CPR 21 is a procedural gap that should be addressed by the Rules Committee, but until then courts should diligently investigate capacity whenever there is reason to suspect its absence.
Finally, the court held that the claimant’s capacity to litigate and settle the claim was sufficient to render the original settlement valid and that the appeal should be dismissed.
Holding and Implications
The appeal is dismissed.
The court held that the claimant was not a "patient" within the meaning of RSC Order 80 and/or CPR Part 21 at the relevant times from 1983 onwards, and therefore was capable of conducting litigation and settling the claim without the appointment of a next friend or court approval of the settlement. The original settlement was valid and the subsequent claim against the former solicitors is subject to limitation defenses.
The decision directly affects the parties by upholding the validity of the settlement and the trial judge's findings on capacity, but does not establish a new precedent beyond clarifying the application of the issue-specific capacity test in the context of litigation under RSC Order 80 and CPR Part 21.
Alert