Procedure for determining mental capacity in civil proceedings
In July 2022, the Civil Justice Council (CJC) approved the creation of a Working Group to look at a procedure for determining mental capacity in civil proceedings, i.e. whether a party lacks capacity to conduct court proceedings.
Why the need for change?
It is important to establish whether an adult party to proceedings has litigation capacity. Under Part 21 of the Civil Procedure Rules (CPR), a person who lacks litigation capacity is a ‘protected party’ and must have a ‘litigation friend’ appointed to conduct the litigation on their behalf.
Part 21 sets out the procedure once it has been determined that a party lacks capacity:
a. A protected party must have a litigation friend to conduct proceedings on their behalf;
b. Any settlement of a claim made in relation to a protected party must be approved by the court;
c. If during proceedings a party lacks capacity to continue to conduct the proceedings, no party may take any further step in the proceedings without the court’s permission until the protected party has a litigation friend; and
d. Any step taken before a protected party has a litigation friend has no effect unless the court orders otherwise.
However, if it is wrongly decided that a party lacks capacity, the appointment of a litigation friend to take decisions on their behalf will represent a significant infringement of their personal autonomy. If it is incorrectly determined that a party has capacity, they may be unable to effectively manage the litigation.
The CPR does not currently set out any procedure for determining whether a party lacks litigation capacity. There is no provision for judicial determination of the issue. Therefore, Part 21 does not assist with determining the essential question of whether a party lacks capacity in the first place.
If a party has legal representation then there is usually no need to involve the court to consider the capacity issue. However, in some cases there is a need for court involvement, for example unrepresented parties and represented parties who deny that they lack capacity and/or will not co-operate with a capacity assessment.
Traditionally, the judiciary, parties and their legal representatives have devised ad hoc solutions, which leads to inconsistency and, potentially, injustice if all litigants are not treated in the same way. A party who lacks the capacity to conduct their own litigation must have their interests protected.
The Working Group set out to consider the issues and make recommendations under these headings:
a. The nature of the issue and role of the court, i.e. is capacity an inter parties issue, or one between the party, any legal representative and the court?
b. Identification of the issue – The role of the court, representatives and other parties.
c. Investigation of the issue – Having identified that a party may lack litigation capacity, some investigation will be needed before the issue can be determined. Who will investigate? What evidence is needed?
d. Determination of the issue – Once the issue has been investigated and evidence obtained, how will a finding be made? Should hearings be in private?
e. Substantive proceedings pending determination – What happens to litigation whilst the issue is investigated?
f. Funding and costs – The upfront costs of investigating the issue, and then who bears the costs at the conclusion of litigation.
The recommendations made by the Working Group
The Working Group published its final report on 11 November 2024. Almost all those involved in the consultation agreed that there should be clear provision and guidance on the procedure for the determination of issues of litigation capacity, either in the CPR or by way of a new Practice Direction. However, given the huge diversity of civil cases, it was felt that courts should be provided with a ‘menu of options’ to ensure an appropriate approach in each case, giving effect to the Overriding Objective.
The key principles and recommendations can be summarised as follows:
a. In dealing with issues of capacity, the court must take into account:
(i) the fundamental importance of the issue;
(ii) the right for those with capacity to conduct their own litigation;
(iii) the need to protect the interests of the party who may lack capacity;
(iv) the need to protect the interests of other parties; and
(v) proportionality.
b. The court’s role must be a quasi-inquisitorial one, i.e. the court will determine the evidence to be gathered but the gathering of such evidence will be delegated to others.
c. Issues of capacity should be identified and determined at the first available opportunity.
d. The presumption of capacity must not be used to avoid proper determination of the issue.
e. The determination of a party’s litigation capacity is not generally one in which other parties have a right to be heard, unless inextricably interlinked with the substantive issues.
f. All parties and their legal representatives have a responsibility to assist the court in identifying and determining issues of capacity. Where the party whose capacity is in doubt is legally represented, the legal representatives should carry out the investigative work.
g. There should be a clear power for the court to order disclosure of evidence relevant to the issue of litigation capacity but only used where it is necessary and proportionate.
h. Once the court has decided that an issue of litigation capacity requires determination, no further steps should be taken in the proceedings and existing orders should be stayed.
i. In hearings to determine litigation capacity, the court should consider what measures are necessary to protect the party’s rights to privacy, confidentiality, and privilege.
j. A party who is found to lack litigation capacity must have a right of appeal.
k. Proper funding must be made available for the investigation and determination of issues of litigation capacity, including the creation of a central fund of last resort.
Comment
It is more than 20 years since Lord Justice Kennedy recommended that consideration should be given to addressing the absence of a procedure for determining whether a party lacks litigation capacity in Masterman-Lister v Brutton [2002] EWCA Civ 1889. If adopted, the recommendations of the Working Party would represent the first step to achieving a system which is fit for purpose. However, there must be concerns over how some of the recommendations will be funded given budgetary pressures.
Presumably insurers might be asked to contribute towards the creation of any central fund of last resort, however, most litigants in serious injury claims tend to be represented. It is relatively rare in our experience for a represented party to deny that they lack capacity and/or refuse to co-operate with a capacity assessment. Unrepresented parties likely to require the court to step into a quasi-inquisitorial role are more common in other, less well funded areas, such as housing disrepair claims.
One recommendation that the CJC has already indicated it supports is the formalisation of a procedure for the appointment of litigation friends prior to the issuing of a claim. At present, there is no requirement for example for a litigation friend to sign a Certificate of Suitability until proceedings are served. This move will no doubt be welcomed by insurers given the extent of work routinely undertaken pre-proceedings in serious injury claims, where substantial interim payments are often requested on behalf of incapacious parties to fund rehabilitation, care and/or accommodation.
Insurers may however be concerned by the recommendation of the Working Party that other parties should not generally have the right to be heard when a party’s litigation capacity is being determined. Whilst rights to privacy, confidentiality, and privilege must of course be protected, in serious injury claims it is likely that litigation capacity will always be inextricably interlinked with the substantive issues. Often both parties will be in possession of expert evidence addressing the issue of litigation capacity and the court should be fully informed of all opinions prior to making a determination.
Given that serious injury claims can be litigated over several years and capacity is time specific, it might be the case that more than one determination of litigation capacity is required during the life of a claim. That will place further burden on the finite resources of the court and add to the costs incurred.
For the same reason, insurers may also have cause to question whether a previous determination of litigation capacity still holds true when approaching settlement. Even with the implementation of a new procedure, we might not have seen the end of the (admittedly rare in our experience) case in which a Coles v Perfect precautionary approval is still sought. As ever, for insurers certainty is key.
In summary, the report should be welcomed in that it sets out recommendations for a procedure to fill the current lacuna and builds on previous important work by the CJC to support the participation of vulnerable parties. We will wait with interest to see which of the recommendations are carried forward and how they are to be funded, however we would have to agree with the Working Party that ignoring the issue is simply not an option.
