An application for approval of a settlement was refused by Justice Harrison in Gray bhnf Salasovicova v St Vincent’s Health Australia t/as Mater Hospital Sydney [2019] NSWSC 1402 (available on Caselaw).
Professor Colditz had opined that the plaintiff’s dystonic cerebral palsy was most likely to have been caused by maternal hypotension resulting from an anaphylactic reaction to penicillin administered to her mother. He was critical of the time taken to deal with the plaintiff’s bradycardia. At [3] the Court noted:
I am aware that there is a medical dispute in these proceedings about whether the plaintiff’s mother in fact suffered an anaphylactic reaction to the antibiotic or instead suffered merely from a vasovagal syncope. The defendants have raised the issue of whether or not the plaintiff can establish that they should have operated upon the basis that the bradycardia was a function of the former rather than the latter. There is an additional medical controversy about whether or not the administration of adrenalin, which did not occur in this case, would have reversed the anaphylaxis, if that is what it was, without harming the plaintiff in utero or whether the administration of adrenalin in fact carried its own risks of foetal compromise by adversely affecting foeto-placental circulation.
However in refusing to approve the proposed settlement, at [8] the Court said:
Having regard to the amount of the proposed compromise, and the balance of competing issues on liability, I am not presently satisfied on balance that the proposed settlement is in the best interests of the plaintiff. Parental concern about litigation outcomes is understandable but is not in the present case a factor that can easily overcome what I consider to be the insufficiency of the settlement that has been offered.
There followed quite a long discussion in relation to solicitor/client costs, which is set out in full:
10 I feel compelled to note in passing that it is, or at least it should be, unnecessary to indicate that solicitors for an infant or legally disable plaintiff do not have any automatic right or entitlement to be paid costs out of the settled funds held on trust for the infant or disable plaintiff following payment by the defendant. While it may be something that does not need to be stated, my experience in this Court continues to be that that simple and obvious fact is either not widely understood or fully appreciated. I say that upon the basis that affidavits sworn by solicitors for the purposes of approvals regularly refer to the solicitor and client component of their costs as if it is something that a judge should necessarily have regard to when assessing how much the plaintiff will receive for investment in the long term. These sworn references to such costs appear to proceed upon the unstated assumption that costs that are not recovered from the defendant will be deducted from that sum.
11 On many occasions I am provided with either an accurate calculation or educated assessment of the amount of the anticipated shortfall between costs payable as part of the settlement and costs for which the tutor is personally liable. I accept that in many cases, solicitors and counsel work on a no win, no fee basis and that they often contribute their own resources, both in terms of time and money, to the prosecution of the litigation, which might not otherwise have been possible without such assistance. I also accept that tutors for infant plaintiffs in particular will most often be one of the plaintiff’s parents, with modest means or without significant resources to fund complex litigation and associated large legal bills. Their understandable interest in doing the best for their child in often heartbreaking and tragic circumstances is usually their single overriding motivation. They are in very many cases the beneficiaries of generosities of this type from their lawyers. These people have a recognisable interest in the finality of litigation.
12 I have attempted in my position as the Professional Negligence List judge to make it clear that I understand the tensions that often exist among the competing interests of the plaintiff, his or her tutor and the solicitors retained by the tutor to act for the plaintiff. Although I do not do so universally, I attempt where it is possible and appropriate, when dealing with approvals, to give what is clearly a non-binding indication to any prospective trustee that payment of the unrecoverable costs from the settled funds might be worthy of favourable consideration in the case at hand. I refrain entirely from giving a contrary indication, even in circumstances where I might hold such a view.
13 In most cases, the amount by which the plaintiff’s total costs exceed the sum that a defendant is prepared to contribute on a party and party basis as part of a settlement is modest and acceptable. Regrettably, that truth is not universal. In the present case, with the commendable co-operation and assistance of senior counsel for the plaintiff, I have been provided with a bill of costs in assessable form prepared by the solicitor for the plaintiff which itemises the costs claimed in these proceedings. Even though I may feel inclined to comment upon that bill of costs, it is entirely inappropriate, for any number of reasons, that I do so now. It is sufficient for present purposes for me to say that I would not at this stage be inclined to give a non-binding indication to the plaintiff’s trustee of the reasonableness of the claimed solicitor and client costs until those costs had been assessed by a costs assessor.