When I first started litigation I was taught the basics such as the fact that a child’s settlement had to be approved by the Court and appropriately protected until the child reaches majority age (18 years of age).
I recall other fee earners having training about infant cases and one particular team being moritifed when the Barrister giving the training was horrified to hear of that team utilising parental indemnity for settlements.
There is a real straightforward reason as to why that Barrister was concerned and condemned the use of parental indemnity, and that’s because of what CPR 21.10 says:-
21.10—
(1) Where a claim is made—
(a) by or on behalf of a child or protected party or
(b) against a child or protected party, no settlement, compromise or payment (including any voluntary interim payment) and no acceptance of money paid into court shall be valid so far as it relates to the claim by, on behalf of or against the child or protected party, without the approval of the court.
The civil procedure rules prevent any acceptance of an offer from being valid until the Court approves it. This is the ultimate safeguard for the child who cannot conduct their own claim or give instructions as they have no standing.
Sometimes, those in litigation forget this. So I was instructed on a matter where a child’s Solicitors had accepted an offer to settle. A new fee earner took over conduct and, upon reviewing the medical evidence, realised that a psychologist was recommended. This was obtained and a recognised psychiatric DSM-5 disorder was diagnosed. This substantially changed the landscape in terms of damages. The offer that was provisionally agreed subject to approval by the Court was far too low. Whilst an application was made to adjourn the IAH, it is likely that if the matter proceeded to an Infant Approval Hearing, the Court would have adjourned and ordered a psychological report.
Imagine if this was circumvented by a parental indemnity agreement?
What is a parental indemnity agreement?
The agreement is between the parent and the child. It essentially discharges the liability on the parent. So if the child becomes 18 and finds out that the settlement was undervalued or the parents have spent the money on a holiday, then the parents would have a claim against them by the child.
This should never be accepted as a form of settlement. This is a significant risk to the litigation friend and to the firm. The White Book gives the following advice:-
Where a settlement has been reached without approval and where it is alleged the legal advisers were negligent in under or over settling, the usual route is likely to seek to re-open the original claim, with the legal advisors indemnifying for any adverse costs in seeking to do so. The claimant is likely to in any event seek an indemnity against the advisers for any adverse costs. However, it may still be possible to bring an action against the legal advisors (see Evans v Betesh Partnership (A Firm) [2021] EWCA Civ 1194).\
For those reasons, always seek approval of the court regarding settlement. If proceedings have not been issued, you can issue Part 8. If proceedings have already been issued, then all that is needed is an application.
Information
Alec Hancock is a CILEX Advocate and Litigator in Civil Proceedings. CILEX Regulation is his regulator. He can appear in open Court in all County Court matters save for family proceedings.
Alec Hancock conducts his advocacy through AJH Advocacy Limited. The Bar Standards Board is the regulator. Alec will attend any Court in England and Wales. He does not charge extra for:-
- Truro County Court
- Bodmin County Court
- Plymouth County Court
- Exeter County Court
- Torquay & Newton Abbot County Court
- Taunton County Court
- Barnstaple County Court
Contact Alec Hancock
Alec Hancock cannot accept instructions from the general public. He can receive instructions from any law firm or entity subject to professional availability and conflict checks.
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