High Court approves settlement in cruise ship meningitis claim

This blog post draws attention to the decision of Andrew Baker J in RCX v PMX [2021] EWHC 816 (Admlty). This was a claim arising out of serious injuries suffered by a child who developed meningitis on board a cruise ship. The judgment has recently been released on Westlaw.

The injured child brought a claim in the courts of Florida. This was countered by a separate claim by the cruise company for an anti-suit injunction in the courts of England and Wales. Just before a jurisdiction battle in the English proceedings, the substantive claim settled. The judge was asked to approve the settlement.

Of particular interest for the purposes of this blog are the judge’s observations on the strategic aspects of the jurisdiction dispute and its implications for his approach to approval of the settlement.

D1 was an infant passenger on a 7-day cruise holiday which took place in February 2020. The holiday was booked by her mother (D2), for herself and her husband (D3), the then-unborn D1, and D1’s paternal grandmother (D4).

D1 suffered in the course of the holiday a meningitis, the consequences of which included amputations to both of her feet and the fingers of her left hand.

Personal injuries litigation in relation to her injuries and their consequences followed in the Florida courts. The essential allegation, at all times been disputed, was that D1 did not receive appropriate, timely intervention by the medical staff on board the cruise liner, such that their negligence was an effective cause of the very severe aftermath of the basic infection.

The cruise company issued its own claim in the English Admiralty Court seeking an anti-suit injunction on the basis that D1 had been bound to litigate in England, and was restricted to the quantum limits in the Athens Convention. An interim anti-suit injunction was granted by the court.

D1 challenged the English court’s jurisdiction on grounds of forum conveniens and also sought the removal of the anti-suit injunction.

However, the case settled before the court could determine the jurisdiction issue. This hearing concerned the court’s approval of the settlement.

The judge started by pointing out the practical impact of the positions adopted by both sides:

As I indicated in the course of my very helpful dialogue with counsel, the reality of a case such as the present – with the burden, as it now is, of the very substantial interlocutory battling over jurisdiction already having been incurred – is that the real claim, which is the first defendant’s personal injuries claim against the first claimant, is, rather starkly, either worth a very significant sum by way of entitlement to compensation, even net of all such matters as legal and other costs of pursuing the claim if it can be litigated through to judgment in the Florida courts, and if, although, as I have indicated, liability would be contested, the claim then succeeded – or it is, in practical terms, worth very little, if anything, by way of real recovery for the purposes of compensating for and covering the costs caused by the first defendant’s injuries, if it has to be pursued in this jurisdiction.

It was in those circumstances necessary to closely scrutinise whether the uncertainties associated with pursuing the claim had all been realistically identified, assessed, and taken into account by D1’s lawyers when agreeing the compromise. The judge was satisfied that they had been:

that is to say, anxious, skilled, and careful consideration has been given to the degrees of uncertainty surrounding: the prospects of the defendants seeing off here the claimants’ position as to jurisdiction; the prospects then of the first claimant as defendant in Florida achieving a stay of the Florida proceedings on forum non conveniens grounds; and, ultimately, and very significantly, the substantial uncertainties as to whether liability would be established at a contested trial.

In respect of the quantum of the settlement, the judge considered that this would meet D1’s future needs:

what is being offered appears to be a settlement sum which will buy for the first defendant very substantial enhancements to her accommodation and, if private provision is sought, prosthetic and other medical assistance, as she is likely to need them, over the course of her entire life. I am satisfied that the settlement sum agreed between the parties, even net of items that may come to be paid from it other than directly for the first defendant’s care, will achieve those goals.

Interestingly, the length of proceedings necessarily involved in protracted jurisdiction disputes in both England and the US was also a relevant factor:

Additionally, settling means achieving resolution now which, although it will have seemed a very long 12 months for the defendant family, I have no doubt, I say nonetheless is only 12 months since the incident itself, and by way of a certain and substantially valuable result rather than only after protracted hearings, probably appeals, possibly in both jurisdictions, with the ever-present significant uncertainty resulting in a risk of ultimately recovering materially nothing.

Although, the judge went on to say, considerations of time would ‘rarely, if ever, be sufficient reason in itself to approve a settlement’, it was, in the context of a fair figure, ‘a very real benefit being purchased’.

Lastly, a key part of the settlement agreement provided that the court retained control over potential payments out of the damages in respect of the lawyers’ fees. This was a particularly important protection in the context of fees incurred overseas in the US proceedings:

However, the court is to retain control over how much, if any, contingency is allowed to be paid out of the settlement fund by provisions in the agreed terms pursuant to which: firstly, the settlement funds paid may only be expended for the direct benefit of the first defendant unless and until a court approved personal injury trust for her benefit, so as to receive and manage that fund, has been put in place; and secondly, no sums are to be paid out in any event of the funds received for that purpose, in relation to costs, without specific further order of the court.

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