“Lights. Camera. Action!” – Re Motion Picture Capital and standing for minority shareholders to bring unfair prejudice petitions
In many cases where there is a dispute over a trust or estate, one or more of the potential parties will be a minor child (that is, aged under 18). Cases may also involve parties who do not have the requisite mental capacity under the Mental Capacity Act 2005 to engage in litigation. Such parties are commonly referred to as ‘protected parties’.
The procedures for litigation by or on behalf of a protected party are covered by Part 21 of the Civil Procedure Rules (“the Rules”). The Rules say that a protected party must have a litigation friend to conduct the litigation on their behalf (unless the court orders otherwise). A litigation friend is someone who will fairly and competently conduct proceedings on behalf of the protected party. A litigation friend is required to act for the benefit of the protected party’s and to act in their best interests. The litigation friend can be a professional, or it can also be someone related to or connected with the protected party, such as a parent, guardian, or other family member.
A person can become a litigation friend by one of three ways:
The court retains a wide discretion when it comes to the appointment of a litigation friend. It can make an order that a litigation friend be replaced, that their appointment be terminated, or that a person cannot be a litigation friend.
Just as a litigation friend can conduct proceedings on behalf of a protected party, they can also compromise the claim and reach settlement on their behalf. However, no compromise, settlement or payment will be valid without the approval of the court. This is the case whether compromise is reached in the pre-action stage, before proceedings are issued, or whether there are active court proceedings. In order to obtain approval of a settlement reached before proceedings have been started, a claim must still be issued and evidence must be filed outlining, amongst other matters, the terms of the settlement. In most cases the court will also require the opinion of a barrister or solicitor on the merits of the settlement.
There are many situations in which a litigation friend may be required. Recent cases in which we have represented a protected party through their litigation friend include:
It is worth remembering therefore that even if a potential claim involves a protected party, they are able to participate in order to protect or establish an interest or entitlement in an estate or trust. However it is important to get things right from the start because any step taken before a child or protected party has a litigation friend is of no effect unless the court orders otherwise.
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