PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND
GENERALLY – PERSONS UNDER LEGAL INCAPACITY (OTHER THAN
CHILDREN):
JURISDICTION AND POWERS – where the plaintiff’s claim for damages
Source
Original judgment source is linked above.
Catchwords
PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS ANDGENERALLY – PERSONS UNDER LEGAL INCAPACITY (OTHER THANCHILDREN):JURISDICTION AND POWERS – where the plaintiff’s claim for damagesfor personal injuries following a motorvehicle accident was settled –where there was some concern about the plaintiff’s capacity – wherethe terms ofthe settlement required the plaintiff to apply to the Supreme Courtfor a determination about her legal and/or financial capacityand, if not, anorder sanctioning the settlement – whether the plaintiff is a“person under a legal disability”as defined by s 59(1A) of thePublic Trustee Act 1978 so as to require a sanction of the settlementHEALTHLAW – GUARDIANSHIP, MANAGEMENT AND ADMINISTRATION OF PROPERTY OF PERSONSWITH IMPAIRED CAPACITY – ADMINISTRATIONAND FINANCIAL MANAGEMENT –JURISDICTION, PROCEDURE AND EVIDENCE – where the plaintiff’s claim
for damages for personal
injuries following a motor vehicle accident was settled
– where there was some concern about the plaintiff’s capacity
– where the terms of the settlement required the plaintiff to apply to the
Supreme Court for a determination about her legal
and/or financial capacity and,
if not, an order that the settlement fund be subject to administration –
whether the plaintiff
has impaired capacity regarding a financial or legal
matter relevant to receiving, investing or managing the settlement
sum
Guardianship and Administration Act 2000 (Qld), s 5, s 11B, s
11C, s 12, s 245, Sch 1, Sch 2 s 1, Sch 2 s 18, Sch 4
Legal Profession Act
2007 (Qld), Part 3.4, Division 8, ss 345-347
Motor Accident Insurance
Act 1994 (Qld), s 79
Public Trustee Act 1978 (Qld), s 59
Barr v Amalgamated Property Maintenance Pty Ltd [2020] QSC 170,
cited
Council of Queensland Law Society v Roche [2003] QCA 469
[2004] 2 Qd R 574,
cited
Gray v Richards [2014] HCA 40
(2014) 253 CLR 660, cited
Hasted v Mackay
[2020] QSC 58, cited
Hewitt v Bayntun & Allianz Australia
Insurance Ltd [2015] QSC 250, cited
Hyytinen v Palmer & Anor
[2020] QSC 240, cited
Nicotra v State of Queensland [2018] 3 Qd R
219, cited
Richards v Gray (2013) 66 MVR 16
[2013] NSWCA 402,
cited
Judgment (109 paragraphs)
[1]
PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY - PERSONS UNDER LEGAL INCAPACITY (OTHER THAN CHILDREN): JURISDICTION AND POWERS - where the plaintiff's claim for damages for personal injuries following a motor vehicle accident was settled - where there was some concern about the plaintiff's capacity - where the terms of the settlement required the plaintiff to apply to the Supreme Court for a determination about her legal and/or financial capacity and, if not, an order sanctioning the settlement - whether the plaintiff is a "person under a legal disability" as defined by s 59(1A) of the Public Trustee Act 1978 so as to require a sanction of the settlement
[2]
HEALTH LAW - GUARDIANSHIP, MANAGEMENT AND ADMINISTRATION OF PROPERTY OF PERSONS WITH IMPAIRED CAPACITY - ADMINISTRATION AND FINANCIAL MANAGEMENT - JURISDICTION, PROCEDURE AND EVIDENCE - where the plaintiff's claim for damages for personal injuries following a motor vehicle accident was settled - where there was some concern about the plaintiff's capacity - where the terms of the settlement required the plaintiff to apply to the Supreme Court for a determination about her legal and/or financial capacity and, if not, an order that the settlement fund be subject to administration - whether the plaintiff has impaired capacity regarding a financial or legal matter relevant to receiving, investing or managing the settlement sum
S L Doyle QC with A Katsikalis for the plaintiff (26 July 2021)
[16]
R J Clayton (sol) for the second defendant (11 June 2021)
[17]
T Matthews QC with R Dickson for the second defendant (26 July 2021)
[18]
[1] The plaintiff, Mrs Adamson, was injured on 13 October 2015 when she was struck by a vehicle that failed to give way to her as she was walking across a pedestrian crossing. She was aged 63 at the time and is now aged 69.
[2] She suffered many injuries. They included a head injury with post-concussion syndrome, various orthopaedic injuries and an adjustment disorder with anxiety and depression.
[3] During pre-court proceedings under the Motor Accident Insurance Act 1994, medico-legal and other reports about the nature and extent of her injuries and level of impairment were obtained.
[4] On 29 January 2021, the parties participated in a mediation, during which a settlement was agreed on the following terms:
[19]
"(a) That the second defendant pay to the plaintiff the sum of $350,000.00 plus standard costs and outlays to be agreed or, failing agreement, to be assessed.
[20]
(b) That the settlement be subject to the plaintiff applying to the Supreme Court for a determination as to whether the plaintiff has legal and/or financial capacity and, if not, an order sanctioning the settlement, and an order that the settlement fund be subject to administration.
[21]
(c) That the second defendant pay the plaintiff's reasonable administration and sanction fees if it is determined that the plaintiff does not have legal and/or financial capacity."
[22]
[5] This led to an application by Mrs Adamson for a determination as to whether she has impaired capacity.
[23]
[6] Capacity is decision specific. A person may lack capacity for some decisions but not others. For instance, a person may lack capacity to manage and invest a very large sum but have capacity to manage a smaller amount. A person may lack capacity to agree to a complex settlement of a large commercial dispute but not to settle a simpler claim.
[7] Therefore, it is necessary to define in this case the legal or financial "matter" about which there is a capacity issue.
[8] The amended application seeks a determination about whether the plaintiff has "impaired capacity in relation to Supreme Court Action No S206/20 pursuant to section 12 and 245 of the Guardianship and Administration Act 2000". It goes on to say that if a determination is made that the plaintiff "does not have the legal and/or financial capacity to manage the settlement sum" payable to her in the action, then the compromise of the proceeding be sanctioned pursuant to s 59(1) of the Public Trustee Act 1978.
[9] These formulations are unhelpful. The issue is not whether a person has the "legal or financial capacity" to do something, but whether the person has the capacity "for a matter". The "matter" must be defined with some precision.
"Capacity, for a person for a matter, means the person is capable of -
[26]
(a) understanding the nature and effect of decisions about the matter; and
[27]
(b) freely and voluntarily making decisions about the matter; and
[28]
Schedule 4 also defines "impaired capacity" to mean that "the person does not have capacity for the matter".
[29]
[11] Schedule 2 of the Act defines a variety of matters, including a "financial matter" and a "legal matter".
[12] A "legal matter" includes the use of legal services to bring or defend a proceeding, and also settling a claim, whether before or after the start of a proceeding.[1] A "financial matter", as the name suggests, relates to an adult's financial or property matters[2] and would include recovery of damages, a legal matter relating to that, and the investment of the proceeds of the settlement of a claim.
[13] I adopt, with respect, the detailed analysis undertaken by Williams J in Barr v Amalgamated Property Maintenance Pty Ltd[3] of the relevant statutory provisions and authorities about capacity and sanctions of settlements.
[15] A related, but different, "matter" concerns the receipt of a settlement sum and its subsequent management, including its investment.
[16] In a case of this kind one issue is whether it is necessary for the compromise to be sanctioned by the Court under s 59 of the Public Trustee Act 1978.
[17] A compromise need only be sanctioned if the plaintiff is "a person under a legal disability", which is defined as a child or a person with "impaired capacity for a matter within the meaning of the Guardianship and Administration Act 2000".[5] I have quoted the meaning of "capacity" and "impaired capacity" above.
[30]
(a) the Court sanctions a settlement or orders an amount to be paid to an adult; and
[31]
(b) the Court considers the adult is a person with impaired capacity for a matter.
[32]
Therefore, in the case of a settlement, unless it is necessary to sanction the settlement under s 59 of the Public Trustee Act1978 because the person is "under a legal disability", the power to appoint an administrator under s 245 of the Guardianship and Administration Act2000 will not be enlivened. However, if a court has concerns about the capacity of an individual to manage a settlement sum, it could refer the issue to the Queensland Civil and Administrative Tribunal.
[33]
[20] Despite the form of the amended application, the capacity issues that arise for my determination would appear to be:
[34]
(a) whether or not Mrs Adamson is a "person under a legal disability" as defined by s 59(1A) of the Public Trustee Act 1978 so as to require a sanction of the settlement; and
[35]
(b) whether or not Mrs Adamson has impaired capacity regarding a financial or legal matter relevant to receiving, investing and managing the settlement sum.[6]
[36]
[21] I have considered various medical reports which incidentally and briefly addressed the issue of Mrs Adamson's capacity. Most of the relevant reports were concerned with other matters relating to the nature and extent of Mrs Adamson's injuries. I will return to the medical reports which touched upon the issue of capacity. For present purposes it is sufficient to observe that although they address the issue, some did so in a conclusionary way. For example, one expressed the opinion that while Mrs Adamson can manage small amounts of money associated with daily living, she would "struggle to manage more complex funds, such as those associated with the proceeds of the settlement sum". This is a relevant opinion. However, it does not precisely address the question of capacity. The issue of capacity concerns, among other things, whether a person has the capacity to make a decision with "adequate and appropriate support". Speaking generally, and without reference to Mrs Adamson's circumstances, a person with limited financial or other literacy may struggle on their own to manage a large fund, but have capacity to do so provided he or she has adequate and appropriate support to do so. I discuss those principles below.
[37]
The practical significance of a determination about capacity
[38]
[22] Mrs Adamson is not used to investing money. She has never enjoyed wealth. However, her sworn evidence before me indicated that she is a cautious and conservative person who has been careful in managing money in the past, out of necessity, and who is unlikely to alter her frugal habits in the future. Mrs Adamson thought that she might buy some better furniture for the home which she shares with her daughter and another relative. She seems unlikely to engage in extravagant expenditure. However, her assessed mental state, level of literacy and anticipated slow cognitive decline over the next few decades make her, like many others, vulnerable to exploitation. That risk is not, in itself, sufficient to conclude that she currently has impaired capacity for the relevant matter.
[23] If Mrs Adamson does not have "impaired capacity" for the relevant matter then she may be expected, in the light of her evidence, to deposit the net proceeds of the settlement into a bank account or similar secure investment. Apart from one-off purchases of furniture which will improve her comfort and her back pain, she does not intend to draw on the money to purchase major items such as a car. She is likely to use the funds from time-to-time to supplement her age pension.
[24] Unfortunately, at the time of the initial hearing before me on 11 June 2021, Mrs Adamson had not made a will and, more importantly, had not received legal advice about granting an Enduring Power of Attorney in the event that she loses capacity in the years to come. I am not critical of Mrs Adamson in that regard. It is unfortunate that she was not given any advice about those matters until she came into the witness box.
[25] If I was to find that Mrs Adamson did have impaired capacity for the purpose of financial matters associated with the settlement, then the matter would take a far more complex and costly course.
[26] In that event, and if the compromise was sanctioned, it was proposed that an administrator be appointed to manage the settlement sum. Different estimates of fees were obtained from potential administrators. Mrs Adamson (and one of her daughters) met with a representative of Equity Trustees Wealth Services Limited (EQT) and instructed that if she did not have capacity to manage the sum herself then EQT might be appointed as the administrator.
[27] EQT has experience in this field and if appointed it proposed to give Mrs Adamson and her family ongoing financial planning advice and management. Mrs Adamson would have a dedicated local Client Relationship Manager who would provide services to her on an ongoing basis. The fees associated with managing the funds are significant. EQT quoted fees which equated to a present day value of $159,451.10 for the expected period of Mrs Adamson's life. If I found that Mrs Adamson has impaired capacity, sanctioned the settlement, and appointed an administrator, then the second defendant would pay those management fees in addition to the settlement amount.
[39]
[36] In the present context, "capacity" for a person for a matter, means the person is capable of:
[40]
(a) understanding the nature and effect of decisions about the matter; and
[41]
(b) freely and voluntarily making decisions about the matter; and
[42]
[37] The following discussion draws heavily upon and substantially reproduces a recent summary by the Queensland Law Reform Commission of principles contained in the Guardian and Administration Act 2000 and the Queensland Capacity Assessment Guidelines (2020) ("Capacity Guidelines").[7] The Capacity Guidelines were introduced to help assess an adult's capacity to make a particular decision, according to Queensland's guardianship legislation. They include principles and practical guidance to be applied in making an assessment. The Capacity Guidelines apply broadly to persons carrying out a capacity assessment for various matters.[8]
(a) an adult's right to make decisions is fundamental to their inherent dignity, should be restricted and interfered with to the least possible extent, and includes the right to make decisions with which other people may not agree;
[44]
(b) an adult's capacity to make decisions may differ according to the type of decision to be made (including its complexity) and the support that can be provided by the adult's existing support network; and
[45]
(c) an adult with impaired capacity has a right to 'adequate and appropriate support for decision-making'.
[46]
[39] The Act also contains principles[10] that require adults to receive support and access to information that is necessary for them to make, or participate in making, decisions and to communicate their decisions.[11] The principles also require that others act in a way that promotes and safeguards, and is least restrictive of, an adult's rights, interests and opportunities.
[40] The Capacity Guidelines also set out five principles to apply when assessing an adult's capacity. Those principles overlap with the principles and acknowledgements in the Act. The Queensland Law Reform Commission recently summarised them as follows:[12]
[47]
"(a) Always presume an adult has capacity: An adult should not be assumed to lack capacity because of their age, appearance, conduct and personal habits, beliefs, language and communication skills, or any impairment (for example, an intellectual disability or a physical impairment).
[48]
(b) Capacity is decision-specific and time-specific: An adult may lack capacity for some decisions but not others (for example, an adult may be able to make simple decisions about their personal care but not complex decisions about their medical treatment)...
[49]
(c) Provide the adult with the support and information they need to make and communicate decisions: An adult should be supported to express their views and wishes in any way (for example, through their conduct). An adult's capacity can depend on the support and information available to them, and they cannot be treated as unable to make a decision unless 'all practicable steps' have been taken to give them the necessary information and support.
[50]
(d) Assess the adult's decision-making ability rather than the decision they make: The focus of a capacity assessment must be on the adult's ability 'to exercise the decision-making process', noting that a person's right to make decisions includes the right to 'take risks' and to 'make "bad" decisions'.
[51]
(e) Respect the adult's dignity and privacy: An assessment of an adult's capacity should occur in a suitable place, that preserves the privacy and dignity of the adult and limits possible distractions. The adult should be informed that their capacity to make a specific decision is being assessed, and the possible consequences of the assessment should be explained. The information provided by the adult during the assessment must be protected."
[52]
[41] As noted, the relevant definition of 'capacity' has three limbs.
[53]
Understanding the nature and effect of decisions
[54]
[42] The first limb requires that an adult can understand the nature and effect of his or her decisions about the relevant matter.
[43] The Capacity Guidelines explain that the adult needs to be able to understand the information that is relevant to the decision, including the options and their consequences. It is sufficient for the adult to have a 'basic understanding of the key features' of that information, but for this criterion to be met, more complex decisions require more understanding.[13]
[44] The adult must also be able to retain the relevant information. This may only be for a short period, provided the period is long enough for the adult to make a decision.[14] Also, the adult must have the ability to broadly identify the advantages and disadvantages of the available options and to understand the consequences of those options, then weigh those consequences and reach a decision.[15]
[45] Giving the adult the information they need to make a decision might involve using the adult's usual methods of communication, or providing information in a way that is accessible to them; for example, by providing simple explanations aided by diagrams. It also requires the adult to be given enough time to consider information and have a support person present.[16]
[55]
[46] The second limb of 'capacity' requires that an adult is capable of freely and voluntarily making decisions about the relevant matter.
[47] The Capacity Guidelines explain that '[i]t must be clear that the adult is making the decision and is not being pressured or coerced into making the decision'. Risk factors that might indicate pressure or coercion, or affect an adult's ability to make a decision freely and voluntarily, include:[17]
[56]
(a) family conflict, especially if one family member has isolated the adult from other family members or their usual support networks;
[57]
(b) the history or presence of threats or perceived threats and abuse;
[58]
(d) sudden decisions to make significant changes to their arrangements (like large gifts of money or property) that are out of character and would disadvantage the adult.
[59]
[48] The Capacity Guidelines note that the test in this limb of the definition should not be applied 'too broadly'. They state that a person may seek advice from others before reaching a decision and that this does not mean that a decision was not made freely and voluntarily. The Capacity Guidelines explain that 'the focus is on whether the adult can make a decision free of intimidation, pressure or influence'.[18]
[49] In a 2010 Report, the Queensland Law Reform Commission concluded that this limb of the definition of capacity is 'an important legislative safeguard' in that an adult's ability to make a decision independently is 'arguably a useful indicator of the [adult's] capacity to exercise decision-making power in his or her own interests'.[19]
[60]
[50] The final limb of 'capacity' requires that an adult is capable of communicating their decisions in some way.
[61]
[51] Mrs Adamson was born and raised in Sydney. She was one of nine children who were raised by their mother alone. Her mother was very loving but the family was under great financial distress.
[52] She did not receive a good education. She felt that she had teachers who did not care. Her grades were poor and she left school at the age of 15. She then found work at a shoe factory. All of her subsequent work was in factories.
[53] She married at the age of 23. Her husband died from a heart attack after they had been married for 19 years. She has been single ever since.
[54] Mrs Adamson had three daughters. One daughter was the victim of an horrendous murder. One of her daughters works as a hotel manager. The other daughter has a history of work but is not presently working.
[55] Mrs Adamson relocated to Hervey Bay to be closer to her children, grandchildren and great grandchildren.
[56] For a long time, she lived in a caravan park. At the time, one of her daughters also lived there. However, in recent times they have relocated to a house which they share with her daughter's aunt. Mrs Adamson described her current living situation as "very nice and comfortable".
[57] She explained the financial arrangements between her, her daughter, and the aunt. All three contribute to electricity and groceries. The aunt, who owns the property, pays the land rates and water rates. Mrs Adamson indicated that, in the future, they will all contribute to those rates.
[58] Mrs Adamson had to manage a family budget when she and her husband were raising their three daughters. However, she has never had enough money to buy a house. She has had to budget to rent. She suffered a major disability to her back more than a decade ago. As a result of her disability she received a pension which she managed to live on. In more recent times she became entitled to the age pension. She lives a frugal life. She is not addicted to alcohol, drugs or gambling.
[59] I spoke to her about many matters during her evidence. She had a reasonably good memory. She did not seem to be the kind of person who would allow herself to be easily preyed upon by a family member or friend wanting to borrow money for a business or similar venture. I think it likely that she would seek assistance from a bank manager, financial adviser or a trusted family member if issues arose as to the investment or reinvestment of the funds. She gave the impression that she understood that the funds were intended to provide her with a level of security for many years to come.
[62]
[71] It is disappointing, to say the least, that prior to the hearing on 11 June 2021, Mrs Adamson's solicitors had not considered some obvious matters that were highly relevant to the issue of capacity which they asked me to decide. These included the kind of basic legal and financial advice that a person in her situation would require to support her decision-making about investment of the net settlement proceeds. Her solicitors had not bothered to inquire what kind of advice would be available to her, at a relatively small cost, about investing that sum.
[72] It also concerned me that they had not advised her to make a will (if only to spare the costs and complexities associated with an intestacy) and had not advised her about an Enduring Power of Attorney, despite the evidence of an expected cognitive decline in the future.
[73] I also mentioned towards the conclusion of the hearing on 11 June 2021 that Mrs Adamson and, with respect, her daughter, did not seem to have the wherewithal to review costs assessments and the difference between indemnity and standard costs assessments, and might require assistance in that regard so as to make "the nest egg as big as it can be".
[74] The application was adjourned to allow a short report or affidavit to be filed about what steps had been taken to obtain advice for Mrs Adamson.
[75] I subsequently received an affidavit by Mr Ng from Shine Lawyers that Mrs Adamson had obtained a fixed fee quote from a reputable financial planner about what to do with her settlement funds and had taken steps to get fee for service advice from an independent solicitor at Hervey Bay about estate planning. She made a will and executed an Enduring Power of Attorney with that local solicitor's assistance.
[76] This was sufficient to assure me that Mrs Adamson has the professional support needed to make decisions about the investment of the net settlement proceeds. She also has the support of daughters she trusts to make decisions.
[77] I therefore conclude that she does not have impaired capacity for decisions about investing the net proceeds of settlement. Expressed differently, having obtained adequate and appropriate support for decision-making about the investment of the net proceeds of settlement, she has capacity in relation to that matter.
[63]
Capacity in relation to the legal costs differential
[64]
[78] A remaining concern is whether Mrs Adamson has capacity in relation to the issue of legal costs which affect the net proceeds she would receive from the $350,000 settlement sum. In order to consider whether the concern was justified I had regard to a "costs affidavit" of Mr Ng which was offered to the court in the event the matter proceeded to a sanction, but which was not read at the hearing on 11 June 2021.
[79] This prompted me to have my Associate email the parties about a number of matters of interest, including the costs agreement which Mrs Adamson and her daughter entered with Shine Lawyers, the difference between anticipated standard costs (which are to be paid by the second defendant) and costs which Mrs Adamson would be required to pay Shine Lawyers under that agreement. My final inquiry was who might be expected to represent Mrs Adamson's interests in asserting that the costs agreement which she signed should not be enforced or that the amount which Shine Lawyers might seek to be paid by way of indemnity costs is excessive.
[80] An issue arose as to whether the costs affidavit should be made available to the solicitors for the second defendant so that they might assist me on matters of concern. I heard argument on that issue on 26 July 2021 and was persuaded by Mr Doyle QC and Mr Katsikalis of counsel that I should not do so, and that doing so might prejudice the interests of Mrs Adamson.
[81] I should add that Mr Matthews QC, who appeared with Mr Dickson that day, made some unhelpful submissions about legal professional privilege not applying to the costs affidavit and the quantum advices of counsel if I reached the second part of the amended application (the sanction issue). No assistance was given to me by Mr Matthews QC about whether the costs affidavit was relevant to the issue of capacity, including whether Mrs Adamson has the capacity to ensure that the net settlement sum is as high as possible.
[82] The hearing on 26 July 2021 concluded on the basis that Mrs Adamson's capacity to address issues about legal costs would be dealt with in a further affidavit. This was done in an affidavit of Mr Ng sworn 5 August 2021 (which I grant leave to file and read).
[83] That affidavit satisfied me that Mrs Adamson and her daughter had spoken to lawyers and were aware of the ability to obtain a costs assessment and to challenge the validity of the client agreement and Shine Lawyers' fees so as to minimise the difference between the standard costs recoverable from the insurer and the costs she is obliged to pay Shine Lawyers. I consider that she has means out of the settlement to obtain advice to support decision-making in that regard. I expect that Mrs Adamson will be able to derive additional support from authorities like the Legal Services Commissioner about the enforceability of the costs agreement she entered with Shine Lawyers and whether the amount of costs demanded of her by Shine Lawyers are excessive. I will make a direction in the exercise of the Court's inherent jurisdiction over legal practitioners so that she has the support needed to ensure that Shine Lawyers' costs are not excessive.
[65]
[85] I am satisfied that Mrs Adamson has capacity to understand the nature and effect of the settlement that was reached. At the time her claim was settled she had the benefit of advice and support from others to make a decision about settling on those terms. Her decision to settle was made freely and voluntarily at the conclusion of a mediation, having received the advice of counsel and solicitors. She was able to communicate her decisions about making and accepting offers. Mrs Adamson had the assistance of her daughter, Karen, in considering the legal advice she was given before the mediation and her assistance at the mediation.
[86] I am also satisfied that Mrs Adamson has capacity at the present time to understand the nature and effect of decisions she might make about the settlement sum. I am satisfied that she is capable of freely and voluntarily making decisions about those matters. She is capable of communicating her decisions.
[87] I do not place excessive weight upon the impressive way in which Mrs Adamson gave evidence. My understanding, which is based upon expert evidence in other cases involving related fields such as testamentary capacity, indicates that persons with impaired capacity can present well, be responsive and engage in intelligent conversations without the extent of an incapacity being evident. That said, Mrs Adamson was an impressive witness. She gave her evidence in a forthright manner. She did not appear feeble despite the pain that she experiences from her back injuries. She was not overawed by having to give evidence in a Supreme Court sitting in a city that is unfamiliar to her.
[88] I have had regard to the medical reports which raise concerns about her capacity to manage a settlement sum. However, they do not establish that she would have impaired capacity, even if given adequate and appropriate support for decision-making.
[89] On the question of her capacity to voluntarily make decisions, the incidence of elder abuse should give any judge reason to consider the potential for exploitation of an elderly person's vulnerability. However, one should not presume that most children of elderly parents are inclined to exploit them. There is no evidence that Mrs Adamson's daughters or any other members of her family are disposed to do so. Her children appear to be supportive and loving daughters.
[90] Mrs Adamson appeared to be fairly headstrong. I am disinclined to conclude that her age or intellectual deficits make her incapable of freely and voluntarily making decisions about financial and legal matters associated with the settlement.
[66]
(a) the settlement of her claim in SC No S206/20; and
[67]
(b) a financial or legal matter relevant to receiving, investing and managing the settlement sum.
[68]
I find that she does not have impaired capacity in that regard if she has adequate and appropriate support for decision-making.
[69]
[92] Since the hearing on 11 June 2021 Mrs Adamson has obtained adequate and appropriate support about investing the net proceeds of settlement. She has received some advice about her ability to challenge the anticipated claim for costs by Shine Lawyers. She will have the means to obtain further advice from an independent solicitor or costs assessor about that matter, and then decide what to do.
[93] I propose to declare that:
[70]
(a) The plaintiff is not a "person under a legal disability" as defined by s 59(1A) of the Public Trustee Act 1978 so as to require a sanction of the settlement; and
[71]
(b) The plaintiff does not have impaired capacity regarding a financial or legal matter relevant to receiving, investing and managing the settlement sum.
[72]
I will hear the parties as to the form of declarations and any issue as to costs.
[73]
[94] Two issues associated with the conduct and settlement of Mrs Adamson's claim should not go without further mention.
[95] The first is the legal costs that she committed herself to paying Shine Lawyers and the substantial difference between their estimated amount and the standard costs that she is entitled to recover from the insurer. Any substantial costs differential will erode the settlement sum which was negotiated.
[96] The second is the size of the management fees which the insurer agreed to pay, namely $159,451.10, for an administrator to manage an assumed sum of about twice that amount ($348,000).
[74]
[97] As to the quantum of legal costs which Mrs Adamson is potentially liable to pay Shine Lawyers, some facts should be noted.
[98] There was never an issue of liability. Mrs Adamson was struck by a negligently driven vehicle as she was on a pedestrian crossing. She was injured on 13 October 2015. She entered into a costs agreement with Shine Lawyers on 26 October 2015. The second defendant formally admitted liability a few months later on 29 February 2016.
[99] This was a quantum only claim from a very early stage, not one in which a law firm agreed to take on a case in which liability was in real issue and the claimant might lose. Shine Lawyers did not have to take on Mrs Adamson's claim on the speculative basis that she might be found to have no claim for damages or have her damages reduced on account of a large level of contributory negligence.
[100] A claim for future economic loss can often complicate the quantum of a claim. There was no claim for past or future economic loss in this case.
[101] There was no real dispute that Mrs Adamson suffered a serious head injury when her head and neck hit the pedestrian crossing. There was no dispute that she suffered a head injury, a back injury, a neck injury, an ankle injury and some psychological effects as a result of her various personal injuries that were sustained when she was struck by the vehicle.
[102] The insurer disputed the nature and extent of the injuries which Mrs Adamson sustained as a result of the accident. These matters became the subject of seven medico-legal reports commissioned by Shine Lawyers and six medico-legal reports commissioned by the insurer.
[103] Mrs Adamson's claim was less complex than a case of severe brain injuries where issues of what a young person's life expectancy will be, and life might have been had the accident not occurred, have large consequences on claims for future economic loss and future care. Mrs Adamson did not claim to have suffered a severe brain injury. She did not lose consciousness after being struck. Later that day she was admitted to hospital and consistently reported headaches, vertigo and other conditions which were attributable to the accident and concussion. There was an issue of whether she suffered a mild traumatic brain injury or some other condition as a result of hitting her head and neck on the road surface. There were medico-legal opinions to support a finding of a mild brain injury. Professor Brew, a Professor of Neurology, concluded that she sustained a mild traumatic brain injury, as did other specialists. However, even if such a finding was not made, she undoubtedly suffered a head injury with ongoing symptoms of headaches and vertigo. I do not intend to minimise the differences of opinion in the medico-legal reports. However, this was not a complex quantum case involving severe brain injuries, let alone a multi-million dollar quantum claim.
[75]
The size of the management fees that the insurer agreed to pay
[76]
[124] This second issue, which also relates to the costs of accidents, can be addressed briefly because my decision on capacity relieves the insurer from having to pay $159,451.10 on account of the estimated costs of an administrator investing an assumed sum of $348,000.
[125] Had the settlement been sanctioned, then the amount to be invested would have fallen below $348,000 because of an expected legal costs differential which would be paid out of that sum. However, the practice is to calculate management fees on the settlement sum without any reduction for the indemnity costs differential.[26] This practice follows the majority decision of the New South Wales Court of Appeal in Richards v Gray.[27] Incidentally, the $159,451.10 is a calculation of the present value of future funds management expenses, adopting a discount rate of five per cent. The calculation is based upon the initial funds under management being $348,000 and the claimant having a life expectancy of 19 years. In other words, the actual funds management expenses would be far greater than $159,451.10 over time.
[126] Had the matter proceeded to an assessment of damages and Mrs Adamson's damages been assessed at $350,000 (subject to a small refund which brought the award down to $348,000) then the claim in relation to management fees payable to an entity like EQT would have raised a potential issue concerning the reasonableness of management fees in that amount. In Gray v Richards[28] the High Court observed:
[77]
"The court is not concerned to regulate the market for the provision of fund management services. The court's concern is to ensure that the plaintiff's actual loss is compensated. There is, for example, no scope for the court to say that the amount is simply "too much" as a matter of intuition or impression if the plaintiff has no practical ability to bargain for a lesser charge."
[78]
[127] On one view, it may be reasonable for a company like EQT to charge management fees on the whole of the fund, and for a defendant to be required to pay the present value of those management fees where the company is acting in accordance with the practice of the market and the rates it charges are not outside the market.[29] However, if the issue had arisen for consideration, then there may have been a real issue as to whether management fees in that amount were reasonable, given the expected amount to be invested and Mrs Adamson's circumstances. An issue may have arisen as to whether there was a reasonable alternative to charging management fees calculated on the whole of the fund rather than a fixed fee for some simple advice.
[128] The practice of investment advisers and fund managers charging management fees on the whole of a fund to be invested rather than fixed fees for services has been the subject of consideration by legislators in other contexts, including the regulation of superannuation.
[129] The insurer's acceptance that it would be liable to pay $159,451.10 in the event Mrs Adamson was found to have impaired capacity and the compromise was sanctioned is noteworthy. It may involve a recognition that the practice of charging management fees on the whole of the fund is entrenched and that courts will accept that it is reasonable in a case like this for an administrator to charge management fees that roughly equate to half the funds under management.
[130] In some future case a court may be asked to consider the reasonableness of charging management fees in the amount contemplated in this case in respect of an accident victim with simple needs and a simple life. If in such a case the management fees charged approximate half the sum to be invested and such fees accord with the practice of the market, then they may be recoverable by a claimant in accordance with the principles stated in Gray v Richards. However, if that is the market for management fees for an award or settlement in the order of $350,000, then some may think that the market needs to be better regulated.
[131] If the matter had proceeded to a sanction, and the settlement had been sanctioned, then the sum of $159,451.10 on account of future funds management fees would have been another "tertiary cost" to be borne by those who pay compulsory third party insurance premiums.
[79]
What should be done to support Mrs Adamson's capacity in relation to the costs differential?
[80]
[133] The disproportion between legal costs and the amount to which a client is entitled under a judgment or settlement may be addressed, to some extent, in the case of a "speculative personal injury claim" by what has been described as "the 50% rule".[30] That rule does not apply, however, to a case that is not speculative. It applies only to a case in which the right of a law practice to charge and recover legal fees from a client for work done is dependent on the client's success in pursuing the claim.
[134] Even in the case of a "speculative personal injury claim", the 50% rule may still permit large legal fees to be recovered where the settlement is for an amount such as $350,000 plus standard costs. The figures in Mr Ng's costs affidavit shows how this may be possible.
[135] Mr Ng's costs affidavit was provided to me on 16 June 2021, at my request, since I thought it would be relevant to the capacity issue. It, along with three quantum advices of counsel, were sent under cover of an email which advised that the defendants had not been included in the email due to the privileged documentation attached thereto. Shine Lawyers requested that the costs affidavit of Mr Ng and the three quantum advices be sealed and not disclosed "to the other side". As I indicated in an email from my Associate to the parties on 24 June 2021, I was content to make an order that the three advices of counsel be placed in an envelope marked "not to be opened without an order of the Court". However, as I advised in that email, matters contained in Mr Ng's costs affidavit seemed to me to bear upon the question which I had to determine.
[136] Having considered submissions from Mr Doyle QC and Mr Katsikalis of counsel for the plaintiff at a review on 26 July 2021 that the costs affidavit was not relevant to the issue of capacity, I remain of the view that certain contents of the costs affidavit are relevant to that issue. An aspect of Mrs Adamson's capacity in relation to her receipt of the settlement sum is her ability to maximise the net proceeds of the settlement available to her by minimising the differential between the standard costs she can recover from the second defendant and the costs she must pay Shine Lawyers. One way to address that financial matter is to ensure that the standard costs are assessed in a reasonable amount and in her best interests. I expect her lawyers will do that. Another way is to ensure that she is not required to pay Shine Lawyers more than she should. She may need advice and other assistance about that to ensure that their costs are assessed properly, not simply on the basis of applying the terms of the costs agreement to the number of hours recorded as work done on her file.
[81]
[142] As indicated, subject to any submissions as to the form of declarations, I propose to declare that:
[82]
1. The plaintiff is not a "person under a legal disability" as defined by s 59(1A) of the Public Trustee Act 1978 so as to require a sanction of the settlement; and
[83]
2. The plaintiff does not have impaired capacity regarding a financial or legal matter relevant to receiving, investing and managing the settlement sum.
[84]
(a) the three quantum advices of counsel provided on 18 June 2021 be placed in an envelope and that the envelope not be opened without an order of the Court;
[85]
(b) the costs affidavit of Christopher Ng be sealed in a separate envelope and that it not be opened without an order of the Court;
[86]
(c) the Registrar provide a copy of these reasons to the Legal Services Commissioner; and
[87]
[144] I will hear the parties as to the form of declarations and any issue as to costs. The costs that Shine Lawyers are able to recover from Mrs Adamson should not include the costs associated with the duplication of hundreds of pages of medical reports and the QCAT material in the hard copy "Brief Bundle", being documents which were exhibited to the affidavit of Emma Livingstone sworn 15 March 2021 in section A of the first volume and which were reproduced in sections C and D of the second volume of that bundle.
[6] Forms of orders in similar terms have been made in similar applications: Hewitt v Bayntun & Allianz Australia Insurance Ltd[2015] QSC 250; Barr v Amalgamated Property Maintenance Pty Ltd[2020] QSC 170; Hyytinen v Palmer & Anor[2020] QSC 240.
[94]
[7] Queensland Law Reform Commission, A legal framework for voluntary assisted dying, Report No 79 (2021), [7.224]-[7.240].
[95]
[8] Department of Justice and Attorney-General, Queensland Capacity Assessment Guidelines 2020 (version 1, 30 November 2020) ("Capacity Guidelines") 6-7.
[11] 'An adult's capacity can improve depending upon the support available to them' and states that '[f]or this reason, an adult can't be found to lack capacity until all practical steps have been taken to provide the support and information needed to make the decision': Capacity Guidelines 6.
[99]
[19] Queensland Law Reform Commission, A Review of Queensland's Guardianship Laws, Report No 67 (2010) vol 1, [7.208]-[7.212].
[23] Guido Calabresi, The Costs of Accidents: A legal and economic analysis (Yale University Press, 1970), 225.
[103]
[25] These include Professor Atiyah's ground-breaking work Accidents, Compensation and the Law which is now in its ninth edition: Peter Cane and James Goudkamp, Atiyah's Accidents, Compensation and the Law (Cambridge University Press, 9th ed, 2018). See also P S Atiyah, The Damages Lottery (Hart Publishing, 1st ed, 1997).
[31] In case my expectation of early payment is misplaced, I will grant liberty to apply to ensure that Mrs Adamson obtains a substantial part of the settlement sum without delay.
[28] Mrs Adamson would not have control over the funds. She would have to ask the administrator to pay for items such as new furniture. She would be on what I colloquially called at the hearing "a drip feed".
[29] If she has impaired capacity and I sanctioned the settlement then I would probably have no alternative than to adopt this expensive course of action, which deprives Mrs Adamson of her autonomy and her right to make decisions about her property, including decisions with which other people may not agree.
[30] I have concluded, however, that Mrs Adamson does not have "impaired capacity" for the relevant matters provided she has adequate and appropriate support for decision-making.
[31] She has an existing support network through her family, particularly her two daughters. She has stable accommodation at Hervey Bay. She was open to the idea of obtaining some legal or financial advice about how to best manage her legal and financial affairs.
[32] I adjourned the matter so that Mrs Adamson and her daughters might explore that issue. I indicated that my decision about capacity might be influenced by her obtaining some sound advice for a relatively small fee from a legal practitioner with experience and skill in advising about such matters. I also mentioned that it should be possible for Mrs Adamson to obtain some very basic financial advice for a fixed fee about whether the net proceeds of settlement should be held in a bank or in some other secure form of investment. I expected that such simple advice for a fixed fee could be obtained for a few thousand dollars. The legal and financial advice could address what financial provision should be made for anticipated future events, for example, what would need to be available at some future date to facilitate Mrs Adamson's home-care support or entry into an aged care facility.
[33] Mrs Adamson does not require a complex financial plan. She is not a young person who has received millions of dollars to compensate her for catastrophic injuries. She does not have so much money that it needs to be shifted around through different managed investment funds and direct investments. She needs simple advice about where to invest her money so that it might earn some interest and not attract significant fees which erode its value.
[34] Mrs Adamson impressed me as someone who would be likely to consider and probably accept such investment advice.
[35] For what it was worth, I indicated at the hearing on 11 June 2021 that I thought Mrs Adamson had the capacity to make a will and to give instructions about granting an Enduring Power of Attorney. However, those were matters for others to assess.
[60] Mrs Adamson is not of an age nor an apparent inclination to go into a business venture. As noted, her habits of a lifetime are cautious and conservative. She has managed small amounts of money throughout her life.
[61] The essential issue is whether she has the capacity to manage, with appropriate support from others, a larger amount of money. Given her intentions, needs and habits, I conclude that she does.
[62] In accordance with the previously stated principles, Mrs Adamson should be assumed to have capacity. She should not be assumed to lack capacity because of her age, limited literacy, limited formal education or her physical or intellectual impairments. However, her impairments, as assessed in various medicolegal reports, deserve close attention.
[63] I was provided in advance with copies of all relevant medical reports. It is unnecessary to recite their contents in detail.
[64] Of most relevance are the opinions of specialists Dr Mariani, Dr Chalk and Dr Mathew, who are of the view that she would have difficulty making decisions with respect to and managing a large settlement sum and that she would benefit from assistance in the management of her financial affairs. Dr Mariani, a neuropsychologist, administered a number of psychometric tests and found that Mrs Adamson performed very poorly on a number of significant tests. Dr Mariani opined that whilst Mrs Adamson can manage small amounts of money associated with daily living, she would "struggle to manage more complex funds, such as those associated with the proceeds of a settlement sum". Dr Chalk, a psychiatrist, specifically said that a litigation guardian would be "the most prudent course of action" for her. Dr Mathew, a psychiatrist, opined that Mrs Adamson "does not have the capacity to manage a lump sum of money should she receive one."
[65] I was also referred to the opinions of specialists Dr Campbell and Dr du Plessis, who are of the view that Mrs Adamson did not sustain any, or any significant, brain injury and is unlikely to have any, or any significant, ongoing cognitive deficits. Dr Campbell and Dr du Plessis were not specifically asked to comment on her capacity to manage a large settlement sum.
[66] I had regard to the course of proceedings before QCAT. It is unnecessary to detail them. They concerned an application for one of Mrs Adamson's daughter to be appointed as her administrator and litigation guardian. The application was dismissed.
[67] After QCAT's dismissal of the application, Mrs Adamson was examined by a neuropsychologist, Dr Ashkar. She performed poorly and below premorbid estimates on most tests. Dr Ashkar opined that Mrs Adamson "has sufficient capacity to understand the nature and effect of decisions about her claim for damages for personal injuries and has sufficient capacity to engage in free and voluntary decision making with regard to her claim". Dr Ashkar also noted that Mrs Adamson is experiencing early stages of cognitive decline and that her cognition and functioning will decline progressively over time to the point of incapacity. Dr Ashkar was unable to conclude whether Mrs Adamson would be able to manage a large settlement sum.
[68] Mrs Adamson was last examined by Professor Brew, a neurologist, in July 2020, who did not provide a specific opinion about her capacity but noted that "the difficulties that Ms Adamson experiences now in relation to cognition are minor" and are not as severe and significant as was reported by Dr Mariani in 2017.
[69] I am not concerned about the extent to which the accident may have caused a mild traumatic brain injury. Views differed on that question between the medical experts. The relevant issue is Mrs Adamson's present mental state rather than what contributed to it. In particular, the issue I have to decide is whether or not she has "impaired capacity" as that term is defined.
[70] There are substantial reasons to be concerned about the possibility that she is at an early stage of cognitive decline and that her cognition and functioning will decline over time to the point of incapacity. However, that matter is something to be addressed by an Enduring Power of Attorney or, in its absence, an application to QCAT at some time in the future. It is not a reason to make a finding of present incapacity out of a desire to protect her interests in the future.
[84] In the circumstances I conclude that Mrs Adamson has capacity to make decisions about those financial and legal matters associated with finalising questions of costs as between her and Shine Lawyers.
[104] In summary, this was a quantum only case of some, but not great, complexity about the nature and extent of the accident's contribution to Mrs Adamson's demonstrated physical and psychological impairments.
[105] Against that background, the estimated legal costs (excluding disbursements) to which Mrs Adamson is said to be liable under her costs agreement with Shine Lawyers seem to me to be extremely high, indeed excessive. The disbursements seem high, but I have no information about the extent to which they are made up by the costs of medico-legal reports and of mediation.
[106] Shine Lawyers seemingly claim to be entitled to recover from Mrs Adamson not only a large amount of costs pursuant to its agreement with her on account of time which has been billed on her file but also what is described as an "uplift". Presumably its agreement entitles it to an "uplift" despite liability never being in serious issue.
[107] The amount which Shine Lawyers estimate to be their recoverable costs strongly suggest that the costs agreement provides for Mrs Adamson to be charged on a time-cost basis and that she will be charged for the time spent by non-legally qualified paralegals in performing essentially secretarial or administrative tasks, such as photocopying.
[108] I have not been provided with a copy of the costs agreement or information about the number of hours of recorded time that Shine Lawyers may be expected to bill Mrs Adamson. The estimated legal costs (excluding disbursements) referred to in Mr Ng's costs affidavit suggest that several hundred hours have been recorded unless the hourly rates that are being charged are themselves extremely high.
[109] It will be for Mrs Adamson to decide, with the support of her daughter and any independent legal advice she chooses to obtain, what, if anything, she does to challenge the costs agreement that she entered less than two weeks after the accident or the quantum of the costs which Shine Lawyers claims from her.
[110] She may be content to absorb out of the $350,000 settlement sum the difference between, on the one hand, the costs and disbursements claimed by Shine Lawyers and, on the other, the standard costs she recovers from the second defendant/insurer.
[111] If the matter had proceeded to a sanction hearing, the likely differential between the costs claimed by Shine Lawyers and the standard costs may have been so significant as to affect the reasonableness of the compromise.[20]
[112] When considering whether to sanction a settlement, the Court can have regard to the charges provided for in a costs agreement, such as unusual charges, including for the time of a non-legally qualified paralegal performing essentially secretarial or administrative tasks. In some cases such work is charged at rates vastly in excess of the hourly amount paid to paralegals and at rates approaching the fees appropriate for an employed solicitor.[21]
[113] In a case like this, where the settlement does not need to be sanctioned by the Court, the kind of supervision which may be appropriate at a sanction hearing in accordance with the decision of Burns J in Nicotra v State of Queensland may not be possible.
[114] If the difference between the estimated indemnity costs and the costs recoverable from the second defendant are not to be the subject of investigation and challenge by Mrs Adamson or supervision through a sanction proceeding, then they should not be a matter of indifference to the Court or to authorities concerned with regulation of the legal profession.
[115] The Court has a supervisory jurisdiction over legal practitioners which may be exercised in any appropriate case to regulate the charges made for work done by practitioners and to prevent exorbitant demands.[22] The Court is, however, ill-equipped and ill-suited to investigate in a case like this the kinds of costs agreements which injured persons enter into with law firms. These investigations are better undertaken by authorities with the investigative powers to inquire into whether a standard costs agreement includes terms which are unfair.
[116] One should not expect a court in a case like this to conduct a general investigation in the supervisory jurisdiction into the prevalence of costs agreements of the kind which Mrs Adamson executed with Shine Lawyers. It may be possible that the kind of costs agreement Mrs Adamson signed passed muster in another case.
[117] The fairness of standard costs agreements executed by injured claimants is a matter for regulators and policy makers. An inquiry by the Court in a case such as this may not reveal the extent to which Mrs Adamson's form of costs agreement is unusual, or the extent to which the same concerns may arise in other matters in which that firm is engaged, many of which are resolved before proceedings are commenced in a court and which do not require the Court's sanction of a compromise.
[118] The costs of litigating personal injury claims, including the many claims resolved before proceedings are commenced, raise broader issues of public policy beyond the Court's supervisory jurisdiction over legal practitioners and the quantum of costs in this case. These broader issues include what may be described as "the costs of accidents". They include primary accident costs like awards for pain and suffering. They extend to what the eminent jurist and scholar, Judge Guido Calabresi, described as "tertiary costs". Professor Calabresi referred to tertiary costs as "the expense of making valuations" under a tort system which allocates highly individualised damages to a victim.[23] As he wrote, the administrative costs of the system cannot be ignored "as they must be borne by someone".[24]
[119] The fairness and efficiency of systems of accident compensation, including the legal costs which they generate, have been the subject of consideration by eminent scholars over the following decades.[25]
[120] A free-market theorist may say that the market for legal services should not be heavily regulated. It should allow someone like Mrs Adamson to buy legal services at a price which entails a potentially significant reduction in the settlement sum negotiated by her lawyers on her behalf. Such a theory may contemplate that such a person will agree to settle a claim, appreciating that the difference between the costs they have to pay their own lawyer and any costs recoverable from the defendant will come out of the settlement sum. Some free-market theorists may imagine that poor and unsophisticated people like Mrs Adamson can purchase before the event insurance to cover their costs of litigating claims in an era in which legal aid does not exist to pursue viable claims.
[121] One should not wear rose-coloured glasses in looking back at a time when injured pedestrians and others with a reasonable personal injury claim could obtain State-funded legal aid, with barristers and solicitors agreeing to run legal aid cases for 80 per cent of the relevant Court scale of fees. Some may question the scope for government-funded legal aid to re-enter a field which has been largely surrendered to market forces and the big business of personal injury litigation.
[122] These are issues which require substantial policy and economic analysis. They require a comprehensive analysis of the costs of accidents. Judgments or settlements of the kind Mrs Adamson achieved (primary costs) are passed on to motorists who pay compulsory third party insurance premiums. The costs of quantum claims by persons like Mrs Adamson include the costs of the claimant's and the insurer's lawyers. The legal costs which insurers agree to pay injured parties like Mrs Adamson are passed on. It is for others, not a court, to consider the extent to which such payments increase compulsory third party insurance premiums and the cost of living of ordinary citizens.
[123] Policy makers may need to consider better ways to contain legal costs which, as Professor Calabresi stated, "must be borne by someone".
[132] To again quote Professor Calabresi's words, the administrative costs of a system of accident law, including legal costs and management fees, "cannot be ignored, as they must be borne by someone".
[137] If no concern had arisen about a costs differential, then Mrs Adamson's capacity to address that matter would not have arisen. A concern did, however, arise and so I regard Mr Ng's costs affidavit as relevant to the issue of capacity. I was not persuaded that the costs affidavit should be provided to the defendants since some of its contents are the subject of legal professional privilege and doing so may prejudice Mrs Adamson's interests in negotiating the defendant's payment of standard recoverable costs.
[138] I have found that Mrs Adamson has the capacity to address the costs differential issue provided she has adequate and appropriate support to do so.
[139] My impression is that the estimated costs differential is well beyond what might be expected for a case of this kind. Therefore, Mrs Adamson should have adequate and appropriate support to make decisions about what, if anything, she does about the costs differential. Provided the settlement sum is paid by the second defendant to Mrs Adamson's lawyers, and then a substantial part of that sum is promptly paid to Mrs Adamson (making a reasonable and not excessive allowance for a costs differential), then Mrs Adamson will have sufficient funds to obtain independent legal advice and, if so advised, an assessment by a costs assessor if she is minded to question any bill from Shine Lawyers.[31] She may be able to negotiate, with the assistance of an independent lawyer, a sensible resolution of the matter.
[140] Mrs Adamson's capacity to make decisions about what to do, if anything, about the costs differential so as to maximise the net proceeds of settlement will be further assisted by a consideration by the Legal Services Commissioner of the terms of the costs agreement, the circumstances under which it was executed and the estimate of what is described in paragraph 3 of the costs affidavit as "the recoverable indemnity costs, including GST and uplift".
[141] In the light of my finding on capacity I am not required to exercise the parens patriae jurisdiction of the Court or the judicial task required under s 59 of the Public Trustee Act 1978.[32] I consider, however, that requesting the Legal Services Commissioner to consider those matters is an appropriate use of the Court's inherent jurisdiction over legal practitioners which may be exercised in any appropriate case so as to regulate the charges made by them and to prevent demands for excessive legal costs. Therefore, I will direct that a copy of these reasons be provided to the Legal Services Commissioner. This will further support Mrs Adamson's capacity to make decisions about what appears to be a substantial, indeed excessive, costs differential.