Ellen Ludlow v Berkshire Healthcare NHS Foundation Trust

Where a proposed settlement concerns a child’s claim or dependency, court approval provides an external check on the propriety of the compromise. The court must exercise judgment in the interests of justice and the protected person, having regard to the overriding objective. A settlement is not binding on the parties until approved by court order.

Apportionment of damages between dependants should protect the children’s interests while recognising the practical need for the caring parent to have access to funds representing lost dependency. The court may approve a pragmatic allocation where the settlement level and structure are sensible and the children’s interests are secured.

The claimant, as executrix of the deceased’s estate and on behalf of his dependants, brought personal injury and dependency claims following his suicide. The defendant accepted that substandard care caused the death on the balance of probabilities.

The parties agreed a settlement of £925,000 gross, reduced by interim payments to a net lump sum of £887,020. Because two dependants were children, the court had to scrutinise and approve both the compromise and its proposed apportionment, including payments of £5,000 to each child into the Court Funds Office.

1. The court approved the settlement under CPR 21.10. Approval was required because two of the deceased’s dependants were children. The court had to exercise judgment in the interests of justice and the best interests of the protected persons, with regard to the overriding objective. The approval hearing operates as an external check on the propriety of the settlement, as explained in Dunhill v Burgin [2014] UKSC 18.
2. A compromise or settlement involving a child or protected party is not binding until approved by order of the court. The court applied Drinkall v Whitwood [2003] EWCA Civ 1547, which applied Dietz v Lennig Chemicals Ltd [1969] 1 A.C. 170. In an application under the inherent jurisdiction, the court should receive the claimant’s representatives’ advice on the merits and any financial advice.
3. The proposed apportionment was consistent with the pragmatic approach described by Latham J in R v Criminal Injuries Compensation Board, ex p Graham Frederick Barrett. That approach seeks to provide the caring parent with sufficient readily accessible cash while recognising that the children are often the dependants for whose benefit the substantial part of the care-related claim is intended.
4. The children’s awards were to be paid into the Court Funds Office, providing security and a reasonable rate of interest. The settlement level and structure were sensible for the dependants, particularly the children. The settlement was therefore approved.