[2007] NSWSC 336
Somerset v Ley [1964] 1 WLR 640
Elderfield v Transport Accident Commission
[2010] VSC 116
Source
Original judgment source is linked above.
Catchwords
[2007] NSWSC 336
Somerset v Ley [1964] 1 WLR 640
Elderfield v Transport Accident Commission[2010] VSC 116
Judgment (2 paragraphs)
[1]
REVISED EX TEMPORE Judgment
This matter comes before me today by way of an application for approval of a settlement pursuant to s 76 of the Civil Procedure Act 2005 (NSW). Mr Cranitch of Senior Counsel appears with Mr Campbell for the plaintiff and Ms Sandford appears for the defendant.
As the plaintiff is a person who is under legal incapacity, any settlement must be approved by the Court pursuant to s 76(3) of the Civil Procedure Act. The Court's function on any such application is essentially protective. I must review all of the evidence presented on the application and be satisfied that the proposed settlement is for the plaintiff's benefit. [1]
The question of whether any settlement is for the benefit of a person under legal incapacity may turn on whether there is a sufficient prospect of obtaining a more favourable judgment such as to outweigh the value of certainty which arises from the settlement. [2] I will keep those principles in mind in considering any particular settlement.
The plaintiff was born in December 1999. During her delivery, complications arose. The plaintiff is now 23 years of age. She is severely disabled and has ataxic cerebral palsy and hypoxic ischemic encephalopathy. She also has a permanent intellectual cognitive disability.
The plaintiff alleges that the difficulties she has experienced since birth arise out of the negligence of the defendant, the Hunter New England Local Health District. As set out in a further amended statement of claim filed on 26 August 2021, the plaintiff alleges that she was born at the Belmont Hospital. It seems that complications developed during the birth, including shoulder dystocia, which, at least by one of the experts in the case, is said to be a nightmare for obstetricians.
The plaintiff alleges that in circumstances in which there was a risk of shoulder dystocia, the defendant should have taken precautions to ensure a senior practitioner was present during induction and delivery. It is said that the moves implemented by the treating specialist to deliver the plaintiff were unreasonable in the circumstances of the known shoulder dystocia. Further, it is said that after birth there was a delay in the administration of adequate resuscitation efforts.
The plaintiff's case changed at some stage after the commencement of the proceedings such that the focus of the case against the defendant went from being the appearance of foetal distress in labour to the quality of her resuscitation. This issue was the subject of an application heard by Harrison J to amend the statement of claim in July 2021. His Honour granted leave to pursue the amended statement of claim.
There is no doubt as to what happened to the plaintiff as a result of her birth. There is, however, a significant issue between the parties in terms of the defendant's responsibility for that which occurred.
The plaintiff has served extensive medical evidence in support of the allegations she pursues, including reports of Dr Peter Campbell, a paediatrician, Dr Dan Milder, a consultant neurologist, Professor Paul Colditz, obstetrician and gynaecologist and Dr Steven Buckley, a well-known rehabilitation consultant. On the other hand, the defendant has served contrary medical reports, in particular, from Dr Keith Hartman, a well-known obstetrician and gynaecologist.
Dr Hartman opines that, in his view, the antenatal management was of an acceptable standard and would attract no peer criticism. Further, he says that the intrapartum management was generally of an acceptable standard. He says that in his opinion the defendant took all reasonable precautions against the risk of harm through regularly monitoring the foetal heartbeat and notifying the Registrar of the deficient heartbeat, although he was critical of the defendant's recording of the foetal heartbeat during the second stage of labour.
He says that in his view, the poor outcome was not the result of poor management and the one departure from accepted good practice did not contribute to the poor outcome. He says that the overall management was consistent with the standard regarded by peers at the time as competent medical practice.
The significance of Dr Hartman's opinion is that the defendant relies on a defence under s 5O of the Civil Liability Act 2002 (NSW). As is well known, the standard of care in these types of medical negligence cases is in effect determined having regard to expert medical evidence as to the standard of care in accordance with widely accepted peer practice. In circumstances in which there is evidence of competent professional practice adduced by the defendant, then it may be that the s 5O defence will be available. I have focused on the defendant's case in this judgment because having reviewed all of the medical evidence which has been presented on this application, being the evidence annexed to the affidavit of the solicitor for the plaintiff, Leslie Abboud dated 22 July 2022, I am satisfied that this is a case in which the outcome could not be certain.
Whilst the plaintiff does have expert medical evidence on which the plaintiff could rely, I am satisfied that if this case proceeded to a hearing, neither party could necessarily approach the outcome with confidence. In my view, it is a case which calls for a compromise.
I am in receipt of a confidential advice from Mr Cranitch SC and Mr Campbell. In the usual way, that has not been provided to the solicitors for the defendant. Suffice to say that I share the views of senior and junior counsel as to the appropriateness of the settlement, primarily because of the need for a compromise.
Of course, it is also necessary to consider the range of damages that the plaintiff might recover. Again, I am in receipt of an occupational therapy report obtained on behalf of the plaintiff from Ms Claire Welsh. The most significant issue on damages may be the plaintiff's entitlement to care, although economic loss is also a big factor.
On my analysis of the evidence, the plaintiff has done remarkably well to get to where she is. No doubt that is because of the extensive full-time care provided by her parents. However, as far as I can determine at this stage, it is unlikely that the views of Dr Buckley that she would need 24-hour care would be accepted. Of course, that is not in any way to minimise or detract from the 24-hour care that has no doubt been provided by her parents for so long but, on a hearing such as this, the Court has to have regard to all of the evidence, including the evidence of the experts.
In the end, as I have said, this is a case which calls for a compromised settlement. It is difficult to predict what the plaintiff might have obtained if successful, but I am satisfied, having regard to the estimates given by senior and junior counsel, that the amount of the settlement $3,750,000 inclusive of fund management, plus costs and disbursements as agreed to or assessed, is appropriate. I am satisfied that it is for the benefit of the plaintiff and should be approved.
However, I do wish to say something else about the legal costs in this matter. When this matter first came before me, the only evidence as to costs was that contained in the affidavit of the solicitor for the plaintiff, Mr Abboud, dated 22 July 2022. He says that he estimates there will be an amount for solicitor and client costs which should not exceed $500,000. I raised with Mr Cranitch SC as to whether it was appropriate in a matter such as this for there to be some further explanation of the amounts that would be coming out of the settlement (the other amounts to come out were explained). He pointed out that it is a matter for the trustee to approve any costs or any amounts which would be deducted from the amount of the settlement.
That is so. However, it seems to me that in circumstances in which the solicitors for the plaintiff suggest that, in a matter which has not ever been to hearing, their solicitor/client costs alone would be up to $500,000 (that is, over and above the amount they recover from the defendant, by way of party/party costs), there needs to be some sort of additional explanation or verification of those costs. This is not just for the purposes of the trustee but for the purposes of the Court in ensuring that the settlement is for the benefit of the plaintiff. I thus stood the matter down and directed that the solicitors provide some further itemisation of the costs.
The Court has an overall supervisory function and a protective function. I raise this in this matter because the approach of the solicitors for the plaintiff was apparently to simply say that, without any sort of explanation or verification, there may be a further $500,000 to come out of the settlement by way of solicitor/client costs in a case which has not even been to a hearing. On any view, that is a significant amount.
I received a further affidavit from Mr Abboud, dated 25 July 2022. He broke down the cost estimate. It included a round sum of $500,000 in professional fees. On average, this equates to, for example, $500 per hour of 1000 hours of solicitors' time in preparing this medical negligence matter.
Mr Abboud also provided details of all the disbursements in the matter. Again, they are significant and are said to amount to $462,000 plus interest on disbursements.
Suffice to say that it is somewhat disturbing to learn that a case like this would take a million dollars in legal fees to get to a point of settlement shortly before the hearing.
I mention these matters because, in my view, it is necessary in an application such as this for those representing the plaintiff not merely to provide an estimate of solicitor/client costs as has been done in this matter, but to provide some verification and justification of the level of fees. Mr Cranitch SC is correct, that it is, in the end, a matter for the trustee, but it is also a matter for the Court to exercise its supervisory and protective powers and ensure that it is aware of all of the deductions.
In any event, in this matter, I am satisfied that the settlement should be approved because of the issues on liability. I must leave the other matters (costs) to be worked out with the trustee, who will no doubt consider the extensive costs sought to be charged carefully.
I make the following orders:
1. The Court approves the settlement pursuant to s 76 of the Civil Procedure Act 2005 (NSW) in accordance with the terms of the consent judgment dated 15 July 2022 (the consent judgment) and signed by the legal representatives from both parties.
2. The Court makes orders in accordance with para 1 of the consent judgment.
3. The Court notes the agreement between the parties set out in paras 2, 3, 4, 5, 6, 7, 8, 9 and 10 of the consent judgment.
4. In accordance with s 77 of the Civil Procedure Act 2005 (NSW), the Court orders the defendant to pay the judgment sum referred to in para 1 of the consent orders, less any authorised deductions for which the consent judgment provides, into the Court.
[2]
Endnotes
Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336; Somerset v Ley [1964] 1 WLR 640.
Elderfield v Transport Accident Commission; [2010] VSC 116; (2010) 55 MVR 206.
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Decision last updated: 03 August 2022