Litigation Capacity - An Introductory Guide

Published date23 December 2021
Subject MatterLitigation, Mediation & Arbitration, Trials & Appeals & Compensation
Law FirmRussell-Cooke Solicitors
AuthorMr Gareth Ledsham

Issues of mental capacity may not feature heavily in the caseload of the average litigator, but many of us will have had reason at one time or another to question our own client's instructions, or those being provided by the opposing party.

Capacity issues can arise unexpectedly in any case, and when they do, a number of different considerations come into play: what about representation? What about settlement? Costs? Does the Court of Protection need to be involved? It is therefore something all litigators (indeed all lawyers) should be alive to.

The aim of this article is to be a 'rough and ready' guide to capacity issues in litigation and a starting point in how to navigate them.

What is meant by lack of capacity?

Before moving onto practicalities, it is necessary to have a brief look at what is meant by lacking capacity.

Since 2007, what constitutes a lack of capacity is defined by the Mental Capacity Act 2005 (MCA 2005), and the definition has been incorporated into CPR 21 which deals with protected parties.

The starting point under MCA 2005 is that everyone is presumed to have capacity unless it is established otherwise, on the balance of probabilities. A person must be assisted to make decisions themselves where possible. Further, they must not be presumed to lack capacity because they make an unwise decision.

To establish a lack of capacity, there is a two-stage test:

  • First is a diagnostic test: is there an impairment of, or a disturbance in the functioning of, the mind or brain (whether permanent or temporary)?
  • Second is a functional test: a person must (i) understand the information relevant to the decision; (ii) retain that information (iii) use or weigh the information as part of the process of making the decision; and (iv) be able to communicate their decision (whether by talking, using sign language or any other means).

A person's capacity is time and issue specific. A person can have capacity to make some decisions, but not others, and may have periods when they are better placed to make decisions (e.g. in the morning).

In terms of the information a client needs to understand, retain and weigh up, this will depend of course on the case, but will include aspects such as: the value of the claim; the cost / benefit analysis of a given course of action and what the implications are of losing (including costs consequences).

This was the approach adopted in the first case to consider the question of litigation capacity: Masterman-Lister v...

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