A recent Supreme Court ruling has effectively voided an 11 year old settlement for a personal injury claim that could lead to the reopening of other previously settled cases for injury.

The claimant, Joanne Dunhill, now 53, instructed solicitors to represent her after being involved in an accident in which she sustained a head injury. She was advised to settle the claim for £12,500 and the claim was settled in January 2003 without the insurer admitting liability.

Different solicitors were instructed some time after the settlement because of concerns about Ms Dunhill’s capacity. They advanced a case that, as Ms Dunhill did not have the mental capacity to conduct litigation at the time of the settlement, it should therefore not be binding. It was alleged that she is due significantly higher compensation for her injuries and consequent needs and, rather than pursue a professional negligence claim, her new solicitors asked the court to review the original settlement figure. Permission was granted and a hearing will now decide the level of damages applicable.

The main reasoning behind allowing the review is that it has now been ascertained that, at the time of settlement, the claimant lacked the mental capacity to enter such a settlement agreement and to make decisions about the litigation. As a result, court approval would have been required and, as this was not obtained, the settlement is not valid.

It will be interesting to see whether there are other claimants who were advised to settle claims in circumstances where they did not have capacity to conduct litigation and did not have litigation friends  or court approval of such settlements.

Steven John, senior associate in the personal injury/clinical negligence team at Penningtons Manches LLP, said: "The circumstances of this case mean that there may now be a flurry of cases with similar appeals. One thing that must be considered with anyone who has suffered a head injury and is pursuing a claim is to ensure that an appropriate assessment of the individual’s capacity to conduct the litigation is undertaken first. Although there is a need for finality in litigation - and it will be difficult to revisit previously settled cases - protected parties require and deserve protection hence the obligatory court approval process in such cases to avoid inappropriate or inadequate settlements being agreed.

"We do come across cases where claimants have been advised to settle claims without the severity and longer term effects of their head injury being properly assessed and we suspect that there are other claimants for whom the court would take a similar approach. However, whether the claimants will be aware of this route is another matter."