ZSY v AAA

Approval of a settlement for a protected party is an evaluative judicial exercise. The court must act in the interests of justice and in the protected person’s best interests, having regard to the overriding objective. Approval provides an external check on the propriety of the compromise.

Where damages include periodical payments, the court must consider whether the structure best meets the claimant’s needs and whether the proposed indexation method is appropriate. Relevant considerations include the accuracy, authority, reliability, accessibility, consistency, reproducibility and simplicity of the chosen index.

This was a personal injury claim arising from a road traffic accident in which the claimant suffered very severe injuries, principally traumatic brain injury and skull fracture. Liability had been apportioned 57.5 per cent to the claimant’s advantage, and judgment on liability had previously been approved.

The parties later agreed damages comprising a net lump sum of £1,170,000 and annual periodical payments of £16,000, converted into euros and indexed by reference to the Latvian Monthly Wage Index. The claimant was a protected party, so the settlement required court approval. The issues were whether the settlement was in his best interests and whether the proposed periodical-payment and indexation arrangements were appropriate.

1. The court approved the compromised settlement under CPR 21.10. Court approval of a settlement involving a protected party is an exercise of judgment. The court must act in the interests of justice and in the protected person’s best interests, while having regard to the overriding objective. The purpose of the approval hearing is to provide an external check on the propriety of the settlement, as explained in Dunhill v Burgin [2014] UKSC 18.

2. The court considered the proposed structure, comprising a net lump sum of £1,170,000 and annual periodical payments of £16,000. The independent financial advice confirmed the advantages of periodical payments in an award intended to meet lifetime needs. The structure was therefore found to be in the claimant’s best interests.

3. In assessing a periodical-payment structure, the court must have regard to all the circumstances and, in particular, to the form of award that best meets the claimant’s needs, including the factors identified in CPR 41.7, Part 41 and Practice Direction 41BD.

4. The proposed indexation by reference to the Latvian Monthly Wage Index was appropriate. The relevant assessment includes the accuracy of the match between the data series and the loss or expenditure compensated, the authority of the data collector, statistical reliability, accessibility, consistency over time, reproducibility and simplicity and consistency in application. The court accepted that the proposed indexation would, so far as possible, protect the claimant against currency volatility and reflect the growth of the Latvian economy.

5. An anonymity order was justified because the claimant’s Article 8 ECHR privacy interests significantly outweighed the Article 10 ECHR freedom of expression rights of the press and public. The order was also necessary to prevent jigsaw identification.

First-instance decision. No appellate history was stated in the judgment.