ERS v KIDS

Approval of a settlement for a child or protected party requires an independent judicial assessment. The court must consider the claimant’s best interests, the interests of justice and the overriding objective. The approval hearing provides an external check on the propriety of the compromise.

The assessment should address the recoverable loss, litigation risks, evidential strengths and weaknesses, and possible adverse costs consequences. A settlement should be approved where, viewed in the round, it is prudent and in the protected party’s best interests.

Where costs are ordered subject to detailed assessment, costs on account should ordinarily be ordered unless there is a good reason not to do so. The interim sum should reflect a broad assessment of the sum likely to be recovered.

This was a personal injury claim by a protected party arising from repeated sexual and physical abuse suffered as a child at an adventure playground operated by the defendant charity. The defendant admitted vicarious liability for the abuser’s criminal conduct, while liability for safeguarding breaches remained disputed.

The dispute therefore resolved into the assessment of damages. The court was asked to approve a negotiated gross lump-sum settlement of £150,000 under Civil Procedure Rules 1998, rule 21.10, and to determine the claimant’s application for costs on account.

The court also considered whether anonymity should continue, having regard to the competing rights under Articles 8 and 10 of the ECHR.

1. Settlement approval. Under rule 21.10, a compromise involving a protected party is invalid without court approval. The court’s task is one of judgment. It must act in the interests of justice, in the claimant’s best interests and having regard to the overriding objective. The hearing operates as an external check on the propriety of the settlement, applying the approach described in Dunhill v Burgin [2014] UKSC 18.
2. The court considered the assessment of recoverable loss, the risks and uncertainties of litigation, the strengths and weaknesses of the evidence, and potential adverse costs consequences. The claimant’s sustained abuse, profound vulnerability, serious psychiatric injury and poor prognosis placed the claim within the severe category of the Judicial College Guidelines. The proposed gross settlement of £150,000 was prudent and in her best interests. It was approved under rule 21.10.
3. Anonymity. The claimant’s Article 8 privacy and private-life interests significantly outweighed the Article 10 freedom-of-expression rights of the press and public. The anonymity order was therefore maintained, consistently with the balancing approach noted in Thoma v Luxembourg [2001] ECHR 240.
4. Costs on account. Rule 44.2(8) requires a reasonable payment on account where costs are subject to detailed assessment unless there is a good reason not to order one. No such reason was shown. Applying a broad assessment of the costs likely to be recovered, the court ordered £100,000 on account, noting that £50,000 had already been paid.