The Court of Appeal has rejected as “too binary” the approach taken by a High Court judge when striking out a negligence claim against lawyers over their former client’s capacity to litigate.
Sir Geoffrey Vos said he disagreed with the High Court that there was “no possible loss” if Hannah Evans, who suffered a traumatic brain injury, could be shown to have lacked capacity to settle the case for only £100,000.
The Master of the Rolls said Mr Justice Marcus Smith struck out her negligence claim because he believed she had not lost the opportunity of recovering appropriate damages. Her lack of capacity meant the limitation period had not expired and she could still make a claim.
Describing this approach as “too binary”, Sir Geoffrey said: “She has lost, even if she had no capacity, the opportunity of recovering more than £100,000 in damages in 2011 and before entering into a settlement.
“Instead, as a direct result of the breaches of duty alleged against the firm and the barrister (if proved), she has been party to a settlement that may be difficult and costly to re-open.”
The Court of Appeal heard in Evans v Betesh Partnership  EWCA Civ 1194, that Ms Evans was the front passenger in a car which left the road and hit a tree in 2009, leaving her with a traumatic brain injury.
She retained the Betesh Partnership and barrister Robert McGinty to make personal injury claims against the driver and in November 2011 instructed the law firm to accept a part 36 offer of £100,000.
Ms Evans cancelled an appointment to see a neuropsychologist, Professor Rodger Wood, later that month and did not see him for over six years, when he found that she “probably lacked capacity” to instruct lawyers in 2011.
She sued her lawyers for professional negligence in November 2018, alleging among other things that they failed to investigate the issue.
District Judge Morgan rejected applications by the law firm and barrister to strike out the claim on the grounds that Ms Evans lacked capacity to litigate, meaning the limitation period had not expired and she could reopen the settlement.
However, Marcus Smith J held that the particulars of negligence implicitly asserted that Ms Evans had no capacity when she settled the case, whilst the particulars of loss implicitly asserted that she had such capacity because she had been deprived of the opportunity to claim greater damages from the driver.
Sir Geoffrey recounted: “Accordingly, having given Ms Evans an opportunity either to accept a stay of the proceedings or to cure the defect, which she declined, he struck out her claim in its entirety.”
Appealing against his ruling, Ms Evans argued that she had nowhere pleaded that she did not have capacity in 2011, merely that the firm and the barrister ought to have investigated her capacity before allowing her to settle.
It was, she submitted, “unjust and inappropriate” to be forced to engage in “hotly contested and perhaps costly litigation with the driver” in a bid to re-open the settlement when the law firm and barrister had caused the difficulties.
“Ms Evans noted that both the firm and the barrister had declined her offer, in pre-action correspondence, to seek to re-open the settlement if she were indemnified by them against the costs of so doing.”
Sir Geoffrey said he did not accept the High Court’s view that Ms Evans was “obliged to decide whether or not she had capacity in 2011 in order to be permitted to make a valid claim against the firm and the barrister for negligently under-settling her claim”.
The Master of the Rolls said the question of capacity “may be a difficult one”, but it was for a different court to decide.
Sir Geoffrey said he agreed with the district judge that there was a “genuine and serious dispute” as to whether Ms Evans had suffered economic loss due to the negligence of her lawyers.
He restored the district judge’s decision dismissing the defendants’ strike-out applications and ordered them to pay the costs of both appeals, even though during the hearing the defendants agreed to indemnify Ms Evans against the costs of trying to re-open the settlement with the driver on account of her incapacity.
The case has now been stayed pending Ms Evans’ application to do so.
Lord Justice Peter Jackson and Lady Justice Davies agreed.