Question: when may the parties to a civil claim not conclude their own settlement or compromise? Answer: when one of them is a child or a patient.

Then it is necessary to obtain the approval of the court and there will be some control or supervision over any money recovered.

Look at Part 21 of the Civil Procedure Rules 1998 (CPR) and the associated Practice Direction (PD21) for the small print.Of course, a payment may be made to settle the claim without the court's approval, but it would not be binding if the child on attaining majority, or someone on behalf of the patient, later wanted more.

If proceedings have already been commenced, you should apply to a judge for approval of any negotiated compromise, and it would be an abuse of process not to do so.There are procedures for obtaining that approval where a claim can be settled before proceedings, although in practice when the amount is very small insurance companies (or other payers) often make payment to a parent or carer in reliance on their indemnity.

They have no legal authority to expend the money, but a challenge is unlikely if this is done in the best interests of the child or patient.For many years, both children and patients have been treated by court rules as being 'under disability' (this expression is not repeated in the CPR) and unable to conduct proceedings.

This is due to age in the case of children and personal factors other than age in the case of patients (old age by itself is not a barrier to conducting proceedings).

This used to be found in the Rules of the Supreme Court 1965 (RSC), Order 80 and County Court Rules 1981 (CCR), Order 10.

Children were then described as minors or infants; the meaning -- a person under 18 -- has not changed.

A patient is 'a person who by reason of mental disorder within the meaning of the Mental Health Act 1983 is incapable of managing and administering his own affairs'.

The former rules which used the expression 'mental patient' referred to '.

.

.

his property and affairs' but this was interpreted as meaning only financial affairs, so there is no material difference in the new definition.There are differences between the two categories: you can readily ascertain whether someone is a child and 'recovery' is to be expected, but it is not always easy to determine whether a person is a patient and recovery is unusual.

Both need a representative to conduct proceedings -- now called a 'litigation friend' but previously a 'next friend' if bringing proceedings and a 'guardian ad litem' if responding.

The duty of this representative is set out in PD21 at paragraph 2.1 as '.

.

.

fairly and competently to conduct proceedings on behalf of a child or patient.

He must have no interest in the proceedings adverse to that of the child or patient and all steps and decisions he takes in the proceedings must be taken for the benefit of the child or patient'.Approval of settlementsApplications for approval of settlements should be prepared in accordance with PD21 paragraph 6.

This is seldom a rou tine task and needs at least a 20 minute appointment.

I generally insist on seeing the claimant and the litigation friend and transfer the case to their local court if the application has not been made there, although recently I consulted a 17-year-old claimant by telephone when she was studying for exams.Representation for the defendant is optional if written consent is available.

Having read the Part 8 statement of case, medical report (if appropriate) and any counsel's opinion, I ask a few questions.

Is the settlement based on full liability and, if not, why not? Has there been full recovery? In personal injury cases I look at the scars and compare these with the photos, which may be all counsel has seen.

I also ask about mental trauma and involve the child in this discussion as well as the parents (if present).

I ask whether the family is content with the settlement -- they usually think the damages should be more, but the issue is whether they are in line with what the court would award.The district judge will award brownie points to the solicitor who produces a draft order in terms that the court can accept, accompanied by a completed form CFO320 (more of that later).

The multi-purpose order which I keep on my computer is reproduced below and could be used as a precedent, although form N292 is the official one.

But it is not just a question of giving approval to the damages.

The court must also approve the costs (then or later) and decide what is to happen to the fund, and this should ideally be done at the same time.

It is usual (but not essential) for the claimant's solicitor to accept the costs recovered from the defendant, and legal aid assessment can then be dispensed with.

This may change with conditional fees.

I would have liked to see a procedure for advance approval of the contractual basis for these fees, but this is only available from the Court of Protection in respect of patients.Supervising a child's fundThe fund of a child is normally invested in court.

Form CFO320 should be completed in advance and produced at the approval hearing so that the court can then give investment directions to the court funds office.

I like to do this in the presence of the litigation friend and child, and let them share responsibility for the investment criteria.

For young children encourage capital growth, and for the 16-year-old high income, because we cannot take a short-term risk with the capital -- but what about those in between? The choice can make a big difference when the fund is handed over years later.Produce the birth certificate at the approval hearing so that the district judge can confirm the date of birth and tick the majority directions box if satisfied that the child will not be a patient on attaining majority.

This authorises automatic release of the fund at that time.

The judge may release a very small fund to the litigation friend for investment on behalf of the child (see PD21 paragraph 10.4), but the interest rate on the court's special investment account is far better than parents can achieve.

I will not entrust the fund to a single parent on means-tested benefits, and if I hand over a fund of more than £1,000 it is to an account in the joint names of the parents with both to sign.

The administrative proposal in a recent Quinquennial Review of the Public Trust Office to do away with funds in court has been opposed by district judges -- we see too many attempts to spend these funds in inappropriate ways.

The Court of Protection will only take over the fund if satisfied that the child will be a patient on attaining majority.The patient's fundIf money is awarded to a patient, the litigation friend has no authority to receive or expend it unless already an attorney under a registered enduring power, so the Court of Protection will normally become involved.

Application for appointment of a receiver should be put in hand before any settlement, judgment or interim payment so the court can hand over the money and need no longer be concerned with how it is spent.Some expenditure 'up front' can be authorised, and where appropriate the county court may retain the fund of a patient and administer it in the same way as it would for a child.

Sums of £20,000 and more can be dealt with in this way where the patient has nothing else apart from state benefits and there is no receiver or attorney.Payments out of a fundAt the approval of a settlement, and on any subsequent applications, the court may release money for the benefit of the child or patient.

In both cases the best interests of the individual must be considered.

The difference is that where there are parents, they should be looked to first for the provision of normal support.

Parents on state benefits cannot always meet the child's needs, so it may then be appropriate to use the child's money for personal benefit.There may be an expectation that the fund of a child will grow until majority, but we no longer safeguard the fund of a patient pending assumed recovery.

Such fund is there to be spent on the patient's needs without worrying about any inheritance for others.ORDER approving settlement where claimant is a child or patient(Civil Procedure Rules 1998, rule 21.10)IN THE .

.

.

COUNTY COURTCase NoBETWEEN.

.

.

(a child)by .

.

.

his/her litigation friendClaimantand .

.

.DefendantUPON HEARING counsel/solicitors for the claimant and [counsel/solicitors for the defendant or reading letter from the defendant's solicitors] and the claimant and litigation friend being presentAND UPON terms of settlement having been agreed by the partiesIT IS ORDERED BY CONSENT that:1.

As to settlement1.1 settlement of the claimant's claim be approved by the court at £1.2 the said sum be satisfied as follows:[(a) the sum of £.

.

.

at present in court be allocated [in satisfaction or on account thereof][(b) the sum of £.

.

.

be paid out of court to the [claimant's solicitors or litigation friend] for the benefit of the claimant][(c) the defendant no later than .

.

.

date [further] pay £.

.

.

to the [claimant's solicitors or litigation friend] for the benefit of the claimant][(d) the defendant no later than .

.

.

date [further] pay £.

.

.

into court for the benefit of the claimant][1.3 all interest accrued on the money in court up to the date of this order be paid out forthwith to the defendant's solicitors and all interest thereafter be added to the fund of the claimant]1.4 all further proceedings in this claim be stayed except that either party may apply to the court for the purpose of carrying this order into effect2.

As to the fund of the claimantIf to be invested by the court (child or small sum held for patient who has no receiver):2.1 [(subject to a first charge under section 16(6) of the Legal Aid Act 1988)] the [fund of the claimant or the balance of £.

.

.

retained for the claimant] be invested and accumulated in the special investment account pending further order and applied for the benefit of the claimant in such manner as the court thinks fitIf a receiver is to be appointed but no such appointment has yet been made:2.1 the sum of £.

.

.

in court be invested and accumulated in the special investment account pending an application by the litigation friend to the Court of Protection for the appointment of a receiver for the claimant and upon such appointment being made the said sum together with any interest thereon [(subject to a first charge under section 16(6) of the Legal Aid Act 1988)] be transferred to the Court of Protection to the credit of the claimant to be dealt with as the court of Protection thinks fitIf a receiver has already been appointed:2.1 the sum of £.

.

.

in court be invested and accumulated in the special investment account to be dealt with [(subject to a first charge under section 16(6) of the Legal Aid Act 1988)] in accordance with the directions of the Court of Protection3.

As to costs3.1 the defendant pay the claimant's costs to be assessed on the [standard or indemnity] basis [the claimant's solicitors waiving any claim to further costs][3.2 the claimant's costs be assessed in accordance with the Regulation 107 of the Civil Legal Aid (General) Regulations 1989 -- delete if no Legal Aid or if the claimant waives any claim to further costs]3.3 there be liberty to apply that assessment of the claimant's costs be dispensed with upon an agreement being reached as to those costsOr if costs have been agreed between the parties and further costs waived:3.2 the claimant's costs be assessed and approved at £.

.

.

and assessment be dispensed with4.

Discharge4.1 upon payment of the [sums and] costs mentioned above the defendant be discharged from any further liability in respect of all claims made by the claimant in these proceedingsDATED 2000NOTES:(1) A receiver will only be appointed if the claimant is a patient.(2) In other cases, investment directions (CFO Form 320) should wherever possible be completed by the district judge at the appointment for approval of the settlement after consulting the litigation friend and/or claimant's solicitor.

This enables the court staff to complete CFO Form 212 which is then submitted to the court funds office.(3) Fatal Accidents Act claims will be brought by the personal representatives of the deceased on behalf of all claimants and an apportionment is necessary.

Where one of the dependants is a child or patient, the above provisions will need to be adapted and the following additional clauses may be required:AND UPON it appearing that the claimant's claims include a dependency claim on behalf of a [.

.

.

name] (hereinafter called 'the child/patient')1.

that the sum of £.

.

.

be apportioned to the dependency claim made on behalf of the child/patient and that settlement of such claim be approved by the court in that sum