NSW court refuses to approve settlement due to concerns over best interests of incapacitated party

Plaintiff suffered a stroke due to the defendant's alleged negligence

NSW court refuses to approve settlement due to concerns over best interests of incapacitated party

The NSW Supreme Court has refused to approve a settlement due to concerns over the best interests of an incapacitated plaintiff.

The case of Alford v Northern Sydney Local Health District [2023] NSWSC 324 involved an application for judicial approval of a settlement on behalf of an incapacitated party. Carol Alford was taken to Hornsby Ku-ring-gai hospital in 2019 shortly after 10 p.m. The plaintiff alleged that the hospital staff failed to diagnose appropriately and manage her presenting symptoms and that the delay in doing so led to a stroke which left her significantly disabled. The plaintiff argued that the hospital operator, the Northern Sydney Local Health District, is legally responsible for the relevant specialists and hospital staff who attended to the plaintiff at the time of the incident.

The parties settled at mediation in February. At the time, the plaintiff's tutor gave instructions to accept the settlement. Since that time, however, the tutor has indicated to the solicitors for the plaintiff that "he does not believe the outcome is satisfactory and requests that the court review the medical evidence and evaluate whether the settlement offer is sufficient."

The NSW Supreme Court noted that its function is protective when it is asked to approve a settlement of proceedings commenced by or on behalf of a person under a legal incapacity. The ultimate question is whether any compromise entered into is in the incapacitated person's best interests. The court further said that it must consider the "advantages and disadvantages of the litigation continuing not only in terms of whether the applicants might secure a more advantageous award from the court at trial but also issues such as prospects of an appeal and the costs and pressures imposed on the plaintiff if the litigation were to continue."

The tutor must also consent to the compromise, but the court was not satisfied that the plaintiff's tutor has consented other than in a highly qualified way.

The plaintiff's expert evidence shows that she failed to receive appropriate treatment and should have undergone emergency surgery within two hours of her admission. The hospital argued that it was necessary to control the plaintiff's bleeding before the surgery and that earlier intervention would increase the prospect of an adverse outcome.

The court found that the medical and expert evidence did not reasonably assess the claim's value if the plaintiff succeeded across all issues. Instead, the assessment is a reflection of the plaintiff's failing across a number of damages issues. The court noted that the plaintiff's damages assessment was essentially double the high range of the defendant's assessment. As a result, the court refused to approve the settlement.

The court pointed out that although the claim called for compromise, there was a substantial discount of the settlement sum, which was a "modest fraction of the plaintiff's best case." The court further said that even if the assessment is moderated, which would be likely if the matter was to proceed to trial, the matter has been heavily discounted. The court was not persuaded that the liability issues identified justified the degree of the compromise.

The court also considered that the tutor had only given highly qualified consent to the settlement. He has concerns that the offer was insufficient, given the plaintiff's current and future care needs. The court ultimately concluded that the proposed settlement was not in the plaintiff's best interests and declined to approve the settlement.

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