Dunhill v Burgin (Rev 1)

Summary

Hilary Term
[2014] UKSC 18
On appeal from: [2012] EWCA Civ 397; [2012] EWHC 3163 (QB)

JUDGMENT

Dunhill (a protected party by her litigation friend Tasker) (Respondent) v Burgin (Appellant)

Dunhill (a protected party by her litigation friend Tasker) (Respondent) v Burgin No 2 (Appellant)

before

Lady Hale, Deputy President
Lord Kerr
Lord Dyson
Lord Wilson
Lord Reed

JUDGMENT GIVEN ON

12 March 2014

Heard on 3, 4 and 5 February 2014

Appellant
James Rowley QC
Matthew Stockwell
(Instructed by Keoghs LLP)

Respondent
Christopher Melton QC
Marc Willems
Maria Roche
(Instructed by Potter Rees)

LADY HALE (with whom Lord Kerr, Lord Dyson, Lord Wilson and Lord Reed agree)

There are two issues in this case, both of them simple to state but neither of them simple to answer. 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 proceedings for her)? Second, what happens if legal proceedings are settled or compromised without it being recognised that one of the parties lacked that capacity (so that she did not have the benefit of a litigation friend and the settlement was not approved by the court as also required by the CPR)? Can matters be re-opened long after the event or does the normal rule of English law apply, which is that a contract made by a person who lacks capacity is valid unless the other party to the contract knew or ought to have known that she lacked that capacity in which case it is voidable (the rule in Imperial Loan Co Ltd v Stone [1892] 1 QB 599)?

These issues are of very considerable importance, particularly in personal injury cases. On the one hand, there is the need to protect people who lack capacity from making settlements which are disadvantageous to them. On the other hand, people are assumed to have capacity to make their own decisions and should only be deprived of the right to do so in clear cases. There is also a public interest in upholding bargains which everyone, but particularly the other party, thought were valid when they were made and in putting an end to litigation. The spectre looms of many personal injury claims which insurers thought had been settled long ago being reopened on the basis of an incapacity which they had no reason to suspect at the time. The real culprits, they would say, are the claimant's original legal advisers (if she had any) against whom she will almost always have a claim for professional negligence.

The history of this case

On 25 June 1999, there was a road accident on a dual carriageway near the entrance to a roundabout in Goldthorpe (which is roughly half way between Doncaster and Barnsley in South Yorkshire). Mr Burgin, who was riding a motorcycle in the offside lane, struck Ms Dunhill, who was crossing the…

JUDGMENT