When is a pre-action admission binding? The impact of Sowerby
There are an increasing number of cases where liability has been admitted before the issue of proceedings but where a defendant, in its defence, has sought to resile from the admission.
In the case of Sowerby -v- Charlton [2005] EWCA Civ 1610 the Court of Appeal sought to resolve the issue of whether CPR part 14 applies to admissions made before proceedings that are not repeated in the defence. It considered whether a defendant requires permission from the court to resile from such an admission.
The facts of Sowerby
Jane Sowerby, the claimant, was leaving a friend’s flat at midnight when she fell from a platform at the top of steps that led from the front door down to the pavement. There was a handrail on one side but not the other and there was a drop in excess of eight feet. She suffered a catastrophic spinal injury causing paraplegia. The defendant’s solicitors were provided with witness statements and medical records. In the medical records the claimant admitted to having had a number of drinks during the evening but strongly denied being drunk.
The defendant said that the claimant was intoxicated. After the benefit of the views of the solicitors, insurers and re-insurers the defendant admitted primary liability but argued for contributory negligence. The offer was originally made “without prejudice” but was then repeated in open correspondence. The claimant issued proceedings and relied upon the admission. A defence was served that withdrew the admission.
At a case management conference, the claimant applied to strike out those paragraphs of the defence that were inconsistent with the admission. At the first instance the application was granted and judgment was entered on the issue of primary liability. It was directed that the issue of contributory negligence be tried as a preliminary issue.
The matter eventually came before the Court of Appeal on 14 December 2005. They concluded that, for CPR 14.1 to be engaged, the admission had to be made during the proceedings.
The relevant provisions are:
14.1:
“(1) A party may admit the truth of the whole or any part of another party’s case
I) He may do this by giving notice in writing (such as in a statement of case or by letter) …
II) The court may allow a party to amend or withdraw an admission.”
14.3
"(1) Where a party makes an admission under rule 14.1(2) (admission by notice in writing), any other party may apply for judgment on the admission.
I) Judgment shall be such judgment as it appears to the court that the applicant is entitled to on the admission.”
What authority do pre-CPR cases have?
The Court of Appeal referred to the judgment of Lord Woolf MR in Biguzzi -v- Rank Leisure [1999] 1 WLR 1926. It was stressed that the Civil Procedure Rules were a new procedural code, and that earlier authorities were no longer generally of any relevance once the CPR applied.
Relevance of Sowerby
This case was decided on the construction of the CPR and CPR 14. The question was whether CPR 14 could be applied to pre-action admissions.
The court concluded that the CPR, as a code, had been drafted in such a way that pre action admissions were not caught by the words: “A party may admit the truth of the whole or any part of another party’s case.” The judgment noted that a party’s “case” will not have been formulated until the claim form or the particulars are prepared.
The court found support for its conclusion in the Personal Injury Protocol. This provides that: where in a case worth less than £15,000 an insurer responds to a letter of claim with an admission that will normally be binding see paragraph 3.9 of the Protocol. The court concluded that a pre action admission was not within the scope of part 14 and therefore a defendant would not need to apply under part 14.5 to withdraw it nor could a claimant rely upon it in seeking a judgment under 14.3.
What happened in Sowerby?
Notwithstanding that the court held that the admission was not caught by part 14 the facts of the case were such that in the words of Brooke LJ at paragraph 32:
“In all the circumstances we considered that there was no real prospect of the defendants resisting a finding of primary liability. Summary judgment might therefore be entered on this issue...”
The court therefore allowed the judgment on primary liability to stand.
How to secure judgment on a pre-action admission
And so we should not be too disheartened by Sowerby. There are a number of routes open to us to exploit a pre-action admission without recourse to Part 14.
Pre action personal injury protocol
Firstly, where liability is admitted pre-action, the presumption is that the defendant will be bound by the admission for all claims with a total value of up to £15,000. We should therefore rely on this point in claims with a value under £15,000.
Where we later discover that the value of the claim has increased to more than £15,000 since the letter of claim, we should specifically notify the defendant as soon as possible as per the Pre-action Protocol. In this way we should seek to protect the claimants rights and bolster any arguments that we can put later against any attempt by a defendant to resile from an admission.
Rule 3.4
We should seek to use Rule 3.4 (2) (b) in particular to argue that a defence should be struck out where a defendant has sought to resile from an admission upon which we have relied. We can argue that the defendant’s actions have caused prejudice to the claimant and that we have relied on the admission by not carrying out further investigations into liability subsequent to the admission.
We can argue that for the court to deal justly with the case judgment should be entered. In our favour, we should also rely on the stock letter, which must be sent to defendants in all cases where a pre-action admission is made (see below).
Remember also that the court may exercise its powers under rule 3.4(2)(a) or (b) on application or on its own initiative at any time if it feels:
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim
(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings
(c) that there has been a failure to comply with a rule, practice direction or court order.
It is always open for us to invite the court to use these powers whenever a case comes before the court through an application or for any other reason.
Regard should also be had to the court’s powers under CPR part 3.1 (2) (k) – to exclude any issue from consideration. A claimant prejudiced by a late withdrawal of an admission can also seek reliance upon that provision.
How will the court decide whether to grant an application?
As always the overriding objective applies and the court has to look at:
1. whether the admission was made in good faith
2. whether the party seeking to withdraw the admission has reasonable prospects of success
3. whether and to what extent it is just to allow the withdrawal
4. whether and to what extent a party would be prejudiced by a withdrawal.
Part 24
Summary Judgment can also be obtained under Part 24 where the court considers 24.2
(a) that the defendant has no realistic prospect of successfully defending the claim or issue
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.
Final note from Sowerby and practical advice
A final point, obiter in Sowerby, is the value placed on the guidance set out by Sumner J in Braybrook -v- Basildon & Thurrock University NHS Trust which was held to offer “valuable guidance on the way in which a court should exercise its discretion when determining whether or not to permit the withdrawal of an admission that was made after an action was commenced:
“45. From these cases and the CPR I draw the following principles.
1. In exercising its discretion the court will consider all the circumstances of the case and seek to give effect to the overriding objective.
2. Among the matters to be considered will be:
(a) the reasons and justification for the application that must be made in good faith
(b) the balance of prejudice to the parties
(c) whether any party has been the author of any prejudice they may suffer
(d) the prospects of success of any issue arising from the withdrawal of an admission
(e) the public interest, in avoiding where possible satellite litigation, disproportionate use of court resources and the impact of any strategic manoeuvring.
The nearer any application is to a final hearing the less chance of success it will have even if the party making the application can establish clear prejudice. This may be decisive if the application is shortly before the hearing.”