Drinkall (a minor) v Whitwood

A settlement of a child’s claim has no legal effect unless and until the court approves it under rule 21.10 of the Civil Procedure Rules 1998. Until approval, either party may repudiate the proposed settlement.

The requirement applies whether the agreement was reached before or after proceedings began. It also applies to a partial settlement, including an agreement determining liability while quantum remains unresolved. A contrary construction would permit the protection to be avoided merely by leaving one issue outstanding.

A 14-year-old cyclist suffered serious injuries, including permanent brain damage, in a collision with the defendant’s car. Before proceedings began, her solicitors made a Part 36 offer to settle liability on an 80:20 basis in her favour. The defendant’s representative accepted it but later withdrew before the claimant attained her majority.

The claimant commenced proceedings and alleged that the correspondence created a binding agreement. District Judge Glentworth decided that the agreement was binding subject to approval and entered judgment on liability accordingly. His Honour Judge Hepple QC upheld that decision, reasoning that rule 21.10 of the Civil Procedure Rules 1998 did not invalidate settlements reached before proceedings.

The defendant’s second appeal concerned whether an unapproved pre-action agreement partially settling a child’s claim was valid and binding.

1. Appeal allowed unanimously. The agreement settling liability was invalid because it had not received the court’s approval. The defendant was therefore entitled to repudiate it.

2. Dietz v Lennig Chemicals Ltd [1969] 1 AC 170 was decisive. Under the materially identical predecessor rules considered there, an agreement settling a claim involving a person under disability remained only a proposed settlement until approved. Either party could lawfully repudiate it before approval. The fact that the present agreement arose from a Part 36 offer made no difference.

3. Rule 21.10 of the Civil Procedure Rules 1998 applies to agreements reached before proceedings. The reference in rule 21.10(2) to an agreement reached before proceedings for settlement of “the claim” necessarily contemplates that the claim exists before proceedings commence. The reasoning below, which confined the rule to settlements made within proceedings or voluntarily submitted for approval, could not stand.

4. The rule also applies to partial settlements. Excluding them would mean that court approval could be avoided whenever any aspect of the claim remained unresolved, even a minor head of damage in a high-value claim. That consequence would be intolerable and absurd. An agreement determining liability while quantum remained contested therefore required approval during the claimant’s minority.

5. Simon Brown LJ added that practitioners acting for children might prudently commence Part 7 proceedings to obtain approval of a partial settlement. He also observed that an unrepudiated agreement might, after the child attained majority, operate as an offer capable of acceptance by either party. Estoppel might possibly protect a party who had acted to their detriment in reliance on an unapproved settlement, but that issue had been abandoned and was not decided.

Jonathan Parker and Thomas LJJ agreed.

1. Court of Appeal (Civil Division): Allowed the defendant’s second appeal in [2003] EWCA Civ 1547. It held that the unapproved agreement was invalid and could be repudiated.
2. Kingston-upon-Hull County Court, His Honour Judge Hepple QC: Dismissed the defendant’s appeal on 6 February 2003 and upheld the District Judge’s decision.
3. Kingston-upon-Hull County Court, District Judge Glentworth: On 4 October 2002 held that the agreement was valid and binding, subject to approval, and entered judgment for the claimant on 80% liability.