The Plaintiff’s mother was injured in a motor vehicle accident in New South Wales whilst in her final term of her pregnancy with the Plaintiff. The driver of the other motor vehicle involved in the accident admitted fault but denied that the accident caused the Plaintiff’s brain damage.

The Plaintiff’s mother was taken to hospital where she alleges that the hospital failed to properly monitor her son’s condition (as a foetus), as a result of which he suffered hypoxia leading to brain damage.

A major challenge for all parties in this case was the determination of the cause of the Plaintiff’s brain injury i.e was it caused by trauma from the motor vehicle accident or hypoxia prior to delivery at the hospital, or a combination of both.

The Plaintiff commenced proceedings against the driver of the other motor vehicle in the District Court of New South Wales. The Plaintiff later commenced separate proceedings against the Hunter New England Local Health District in the NSW Supreme Court. The proceedings were combined, and the matter came to his Honour Ierace J following a settlement reached between all parties. The single issue in both proceedings was causation which was described by his as “very much a live issue”.

The Plaintiff (in the motor vehicle proceedings) alleged that he suffered mild physical and developmental issues because of the accident which would lead to future serial or long-term unemployment. As against the hospital, the Plaintiff alleged that the hospital was negligent in the care it provided on and shortly after the mother’s arrival, in not properly monitoring the condition of the foetus. Later in the same day, the plaintiff was delivered via a caesarean section and suffered a degree of hypoxia prior to delivery.

Ultimately, the New South Wales Supreme Court exercised it protective jurisdiction to approve settlement of the claim in the amount of $3,300,000. See Wells bht McGuffog v Grahaml Wells bht McGuffog v Hunter New England Local Health District [2020] NSWSC 965.

This case, although not new or novel to the law, shows the importance of the court’s power to grant approval for settlements reached on behalf of people under legal disabilities. His Honour adopted the approach set out in the case of Permanent Trustee Co Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336, in which Hammerschlag J observed that the principle for the court to grant approval for a compromise to be entered into by the disabled person must be from the view that it is beneficial to his or her interests. It was taken into account the possibility that an award of damages at the conclusion of a full hearing may deliver a greater quantum of damages than the proposed settlement amounts but ultimately with the confidential advice from the plaintiffs’ counsel and the affidavits of the instructing solicitor and mother, the court was satisfied that the settlements were in the best interests of the plaintiff.

Ordinarily, on approval of such matters, the Court will make orders for the settlement money to be paid into Court and then paid out to a trustee so that the money can be managed for the benefit of the Plaintiff. That process is designed to protect the plaintiff from depleting the money, particularly when the plaintiff may lack the financial skills necessary to manage such a large sum of money. In the case of large awards of money, the trustee will usually seek advice from an independent financial advisor to determine how best to use the plaintiff’s money for his or her benefit.

For more information about that process and the high standard of care that must be afforded to a plaintiff by such advisors, see the decision of the Queensland Court of Appeal of HAP2 Pty Ltd v Bankier [2020] QCA 152 in which the injured person sought advice from a financial planner following receipt of an approved settlement of $2million. In that case, the financial manager failed to advise the injured person about the risks of spending her aware of damages, such that those damages were depleted well before they ought to have been.