King v The Wright Roofing Company Ltd

Capacity is decision-specific and is presumed unless proved absent on the balance of probabilities. The Mental Capacity Act 2005 requires the court to distinguish inability to make a decision from an unwise decision. A person may understand and retain relevant information yet lack capacity if, because of an impairment of the mind or brain, he cannot use or weigh that information as part of the decision-making process. For litigation, the assessment concerns capacity to conduct the proceedings generally. It includes the ability to assess settlement offers, evidence, funding arrangements and reasonably foreseeable consequences. For financial decisions, the court must consider whether the person can use or weigh information about income, expenditure, property and future care. Extreme or repeated decisions may provide evidence of inability to use or weigh information, but poor judgment, frustration, generosity or refusal of assistance do not by themselves establish incapacity.

The claimant, a roofer who suffered a severe traumatic brain injury in an admitted accident, brought a claim for damages with a litigation friend. The defendant disputed that he lacked capacity. The preliminary issue was whether he was a protected party under CPR rule 21.2(d) and, additionally, a protected beneficiary under CPR rule 21.2(e).

The evidence was conflicting. Some experts considered that the claimant understood the litigation and could manage his affairs; others considered that he could not use or weigh relevant information, particularly concerning settlement, rehabilitation, future care and financial management. The central questions were whether the claimant lacked capacity to conduct the proceedings and whether he lacked capacity to manage and control money recovered in them.

1. Outcome. The claimant was held, by a narrow margin, to lack capacity both to conduct the proceedings and to manage and control money recovered in them. He was therefore a protected party and protected beneficiary.
2. Under the Mental Capacity Act 2005, capacity was presumed, the burden being on those alleging incapacity. All practicable steps to assist decision-making had to be taken. An unwise decision did not establish incapacity. The relevant question was whether the claimant, because of his brain injury, was unable to understand, retain, use or weigh relevant information, or communicate his decision.
3. The claimant understood the general litigation process, had rejected at least one settlement offer and recognised that approaching the defendant’s insurers directly was inappropriate. Those matters did not resolve the issue. The court concluded that he could not reliably use or weigh information about the value of the claim, the consequences of accepting less than its full value, the evidential basis for settlement, rehabilitation, or the consequences of the funding arrangements. His conduct created a serious risk of under-settlement through inability to weigh the evidence and foreseeable consequences, rather than mere impatience.
4. As to financial capacity, living beyond one’s means, incurring debts, generosity to friends, secrecy about finances, anger at restrictions and refusal of assistance were not, individually, sufficient. The decisive evidence was the claimant’s inability to manage money during several overseas trips, his absent-mindedness and his inability to use or weigh information about future care and the consequences of exhausting his compensation.
5. The conclusions were reached on the balance of probabilities, with hesitation and a very narrow margin. The judge noted that the claimant’s absence from the witness box made assessment more difficult.
6. Obiter guidance included the importance of effective representation by a litigation friend whom the claimant trusted, possible replacement of the litigation friend, attendance directions under CPR rule 3.1(2)(c), and the potential relevance of undue influence and fiduciary duties in cases where a tort has contributed to a claimant’s vulnerability.