Date: 29 September 2006

RESILING FROM A PRE-ACTION ADMISSION OF LIABILITY

“A member of our claims handling team has admitted liability, including causation, to a Claimant in a personal injury claim.  Can we withdraw it?”

This is a question sometimes asked of us by our insurance clients.  To date it has not been an easy question to advise upon with any degree of certainty.  The issue did however come before the Court of Appeal recently in a case of Stoke on Trent City Council v John Walley 2006 EWCA Civ 1137.  The case concerned a Council refuse collector who had injured his knee during the course of his work.  The Council wanted to withdraw an admission made by an employee of their loss adjusters, who was later dismissed for incompetence.  The Claimant had applied to strike out the Council’s Defence on the basis that it was an abuse of process, or otherwise would obstruct the just disposal of the proceedings; and the Council cross applied to resile from its earlier admission. At the Court of Appeal the Council was successful in obtaining permission to resile from its earlier admission. Whilst there is insufficient time to deal with the full facts of this case in detail, some salient points can be gleaned from the decision, and some previous case-law.

In respect to any such application a Defendant will need to show:-

• full reasons and justification for the need to withdraw the admission
• that it is not acting in bad faith, or in other words for purely tactical reasons
• that there will be no real prejudice to the Claimant that would affect the fairness of the trial
• that there will be some unfairness to the Defendant if it were not permitted to resile from its earlier admission.
• it has withdrawn the admission at the first available opportunity (note in particular that the nearer an application is to a final hearing, the less chance of success it will have, even if the party making the application can establish real prejudice)
• it has a reasonable prospect of succeeding in defending the issue of liability.
• there is otherwise no infringement of the overriding objective laid down in Paragraph 1.1 of the Civil Procedure Rules 1999 that the Court deals with cases justly, ie, equally, proportionately and expeditiously.

Concern has recently been expressed by claimant solicitors and judges about the “devaluation” of pre-action admissions in high value cases and  it is possible that this issue will be reviewed by the Civil Justice Council.

In my experience insurers and their solicitors do not seek to resile from an earlier admission without good reason - usually because some new evidence has been received which casts doubt on the Claimant’s credibility either that an accident occurred at all, or that it occurred in the circumstances alleged, or with such particular consequences. 

In my view , in those circumstances, the Courts should permit a Defendant to resile from an admission in a multi-track or fast-track claim where it can also satisfy the criteria listed above.  It is to be hoped that any future review of this issue will not fetter the Court to deal with cases “proportionately” or “expeditiously”, at the expense of “justly”. 

 In answering the issue posed at the outset of this article, the first question that must be asked is whether or not you have a good and valid reason for needing to resile from the admission and then to carefully consider if the case meets the criteria listed above.

We will keep you posted as to any developments from the Civil Justice Council.  In the meantime, if you are having any difficulties in resiling from an admission or want some advice on whether to do so or not, please do contact me:  collette.bourne@bullerjeffries.com.

Collette Bourne