Among the many issues highlighted by Lord Justice Gillen’s 2017 review of civil justice in NI was the absence of a process for approving settlements in claims involving minors and in which proceedings had not been issued. The Gillen group’s view was that “serious consideration [should] be given to introducing legislation to make court approval of legal settlements of financial cases involving minors mandatory.” The consultation paper issued on 7 July 2021 by the Department of Justice NI now takes that forward and sets out possible options for reform (including ‘no change’). Responses are due by 24 September.
The DoJ NI’s latest consultation paper is a fairly thorough analysis of the nature of the perceived problem and of the numbers of claims which may be involved. The sources of data available to the DoJ included the state benefit Compensation Recovery Scheme (CRS), information provided ABI / insurers and by public bodies. The DoJ established that although 800 settled claims involving unrepresented minors were recorded by those sources over three years: “the large majority of claims recorded on the CRS database as having been settled without legal representation are incorrectly recorded … analysis indicates that only around 10% of these were settled in reality without legal representation: this would represent around 26 cases per year (about 1% of all compensation claims involving children).”
If this analysis is valid – and there is no reason to doubt that it is – then this does not appear to be a significant issue in practice. The Justice Minister’s use of “proportionate” and “appropriate” in the press release accompanying the publication of the consultation paper may hint at that: “I want to ensure, in a proportionate way, that children are properly compensated for personal injuries and that there is appropriate protection of their awards.”
Even if case numbers are as low as suggested, the perception of risks or abuses arising from unapproved settlements of minors’ claims remains real. The DoJ’s consultation sets out 6 options to address these, including “no change”. The legislative options outlined by DoJ differ from each other depending on which of three binary policy choices are made, as illustrated below.
|which claims are covered?||> threshold value (eg £3,000)||any value|
|who applies for approval?||claimant||compensator|
|what procedure is involved?||simplified (paper by default)||conventional|
|less costly / onerous||more costly / onerous|
It is difficult to assess what the ultimate outcome might be. On the one hand, following the principled approach in Gillen would point to a legislative solution (and comes with judicial endorsement in the 2017 review). On the other, adopting a “proportionate” approach to what, on DoJ’s latest analysis, now looks to be problem of quite modest size might tend to point either to no intervention or to something relatively light touch.
We should expect to learn the way forward by the end of the year. In the meantime, please get in touch if you would like to discuss the consultation and options for responding before the September deadline.