View source for OH v Craven (2016) EWHC 3146 (QB), (2016) MHLO 52

{{Case
|Date=2016/12/07
|NCN=[2016] EWHC 3146 (QB)
|ICLR=[2016] WLR(D) 682
|ICLR ID=2016008226
|Other citations=[2016] MHLO 52
|Court=High Court (Queen's Bench Division)
|Judges=Norris
|Parties=OH, Susan Craven
|Sentence=Personal injury settlements
|Summary=Principles for personal injury trusts.
|Detail===Extracts==
"This brings me back to the focus of my concern. The firm of solicitors who have acted in the successful litigation will have established a relationship of trust and confidence with the claimant or the litigation friend. At the successful conclusion of the litigation the person in whom trust is reposed then suggests a further transaction out of which its associate will derive a personal benefit. The adviser suggests that a private trust is the preferable arrangement, and that its associated trust corporation should be appointed trustee and should charge for acting, although there are many other trust corporations who could fulfil the role. So the client is retained for the long term. The solicitors before me suggested that this arrangement was not about an integrated business model (whereby the litigation solicitors secure for their associate the future income stream of management fees, the size of which will be under its control, together with any transactional fees) but was an arrangement for the convenience of clients who wanted a "one stop shop" in personal injury litigation. But this is a shop that stocks only one product. The principled approach to this situation is in my judgment as follows. The law irrebuttably presumes that a solicitor has influence over his client: Etridge [2001] UKHL 44 at [18]. Vesting a large sum of money to which the settlor has recently become absolutely entitled in the settlor's solicitor upon a bare trust for the settlor (but subject to charging and other powers vested in the solicitor) cannot readily be accounted for by ordinary motives. It is a transaction that calls for an explanation (in a way that making a family solicitor the trustee of a family trust or making a partner in the will draftsman's firm the prospective executor simply do not). It gives rise to a rebuttable evidential presumption that the solicitor's influence has been undue. The burden lies on the solicitor to adduce evidence rebutting this presumption. Typically, that evidence will demonstrate that the settlor had independent advice such that the constitution of the bare trust was a spontaneous act undertaken in circumstances which enabled the settlor to weigh matters up and to exercise his or her own free will. How might that be done? In my judgment where the litigation firm proposes the establishment of a "personal injury trust" in relation to a settlement of £1 million or more where its in-house trust corporation is to be a trustee then (drawing on the established practice in applications under the Variation of Trust Act 1958 and in trust compromises) a separate partner in the firm should instruct Chancery Counsel of not less than 5 years' standing to advise the claimant or the litigation friend in writing as to the advantages and disadvantages of the proposed private trust (both as to its strategic advantages and as to its exact provisions, including the advantage of trusts other than bare trusts) and as to the trusteeship arrangements: and this should be done at the expense of the firm. The instructions to Counsel and the Opinion should be put in evidence on the occasion when the approval of a compromise incorporating such a proposal is sought, or when an application is made for a payment out of the Court Funds Office. I express the provisional view that where the Trust Fund exceeds (say) £3 million (so that the annual income may well be of the order of £75,000) serious thought ought to be given to including within the trust provisions the appointment of a suitably qualified family member or an independent professional as a "protector", whose consent would be required to (a) any alteration in the original trustee remuneration rates originally approved by the Court when approving the compromise or payment out; (b) the engagement of any investment advisers or managers and their remuneration; and (c) the exercise of any power which would deprive the beneficiary of income or capital to which he or she would otherwise be entitled as of right."

==Citations etc==
OH (a minor by his litigation friend TA) v Susan Craven - and - AKB (a protected person by his litigation friend JB) v Christopher Willerton

Case Nos: C90MA169 & B90MA009
|Subject=Other capacity cases
|News=No
|RSS pubdate=2021/09/20 09:20:06 PM
}}