AXA v Airedale NHS Foundation Trust

Settlement of a child’s personal injury claim requires the court’s independent approval. The court must determine whether the proposed settlement is in the child’s best interests, in the interests of justice and consistent with the overriding objective.

Where damages include periodical payments, the court must also assess whether the proposed structure best meets the child’s needs, having regard to the applicable practice direction, including the level of payments and the parties’ preferences. Approval is appropriate where the court has sufficient information to evaluate the settlement and considers both its amount and structure reasonable.

The claimant, a child, brought a personal injury claim arising from clinical failures during her birth which caused a permanent brain injury and cerebral palsy. Judgment had already been entered for her on a 100% basis, leaving quantum to be determined.

Before the quantum trial, the parties agreed a settlement comprising a lump sum, periodical payments for care and case management, and a sum for deputy costs. The application required the court to decide whether the proposed settlement and its payment structure were in the claimant’s best interests.

1. The court approved the proposed settlement in the terms of the order before it. The claimant was a child within CPR 21.2(2), so court approval was required.
2. The court’s function was to provide an important and independent check on the parties’ agreement. It had to consider whether the settlement was in the claimant’s best interests, in the interests of justice and consistent with the overriding objective.
3. The court had sufficient information to assess the settlement. It considered the confidential advice, the schedules of loss, the parties’ competing valuations and the supporting material.
4. The settlement figure was well within the reasonable range of damages which the court could have awarded. Its structure was also sensible from the claimant’s perspective.
5. Because the settlement included periodical payments, the court considered whether that structure best met the claimant’s needs, having regard to the factors in the relevant practice direction, including the scale of the annual payments and the preferences of the claimant and defendant. Periodical payments were appropriate for care and case management and for deputy costs from year three.
6. The court concluded that periodical payments offered clear advantages in a case involving potentially lifelong care needs. The settlement was therefore in the claimant’s best interests and was approved.