Compromise before incapacity is valid

The claimant suffered severe head injuries in a road traffic accident. His physical recovery was good but in 1999 he developed epilepsy and was unable to work. In November 2000, having taken legal advice, he agreed to accept liability on a 50/50 basis. Proceedings were commenced and in December 2001 Judgment was entered for 50 per cent liability with damages to be assessed.


In January 2003 medical evidence suggested that he lacked mental capacity. A litigation friend was appointed raising issues as to the effect of the 2000 agreement. The Judge held that the claimant was a “patient” in December 2001 but not in November 2000 and exercised his discretion that the 50/50 apportionment should stand.

The claimant appealed on the grounds that the Judge was wrong in law to find that the claimant was not a patient in 2000, and if wrong on that he was wrong in the exercise of his discretion.

The Court of Appeal held that the test was that set out in Masterman Lister: the enquiry had to focus on the capacity to conduct the proceedings and therefore the claimant had to understand all aspects of the proceedings and be able to take an informed decision. If he understood what was meant by 50/50 split, but lacked the capacity to understand the concept of damages, then he lacked true capacity to conduct the proceedings.

But the matter should not be remitted for rehearing. The Judge had already explained how he would have exercised his discretion; his discretion was unfettered and not susceptible to an appeal. The appeal was dismissed.

Bailey -v- Warren. Court of Appeal, 20 February 2006, Times Law Reports.

Refusal of Pre-Action Disclosure Application

A police informer appealed against the dismissal of his application for pre-action disclosure against the police. He had been an informer for 12 years and had given information in relation to possible terrorist activities within the Muslim community at a significant risk of harm to himself. After he ceased to be an informer he instructed solicitors who wrote making a claim for significant damages for psychiatric injury, and sought disclosure of material documents before commencing any action.


His application was dismissed. The Court of Appeal, upholding the decision, said that it was wholly inappropriate for the court to be asked for pre-action disclosure as it was plain the issue could not properly be considered without a properly formulated claim. The difficulty the claimant faced was that the letter of claim had not provided an appropriate platform from which to launch an application for disclosure. It was apparent from the way the allegations were set out that the claim could be perfectly properly pleaded without disclosure and disclosure was not necessary for proceedings to be launched.

Laurence -v- Commissioner of Police of the Metropolis. Court of Appeal, 
13 February 2006.