PRE-ACTION
ADMISSIONS POST SOWERBY V CHARLTON
1. A question that had, until recently,
given rise to much uncertainty in the lower courts was whether CPR 14.1, the
successor rule to Order 27, rule 3, was capable of being interpreted in the
same way (i.e. capable of embracing admissions made pre-action). Until Sowerby
v Charlton [2006] 1 WLR 568, the Court of Appeal had not had an opportunity
of stating authoritatively whether that was the case.
The
position pre-CPR
2. R.S.C. Order 27 rule 3 provided as
follows:
“Where admissions of fact or of part of a case are made
by a party to a cause or matter either by his pleadings or otherwise, any other
party to the cause or matter may apply to the court for such judgment or order
as upon those admissions he may be entitled to, without waiting for the
determination of any other question between the parties and the court may give
such judgment, or make such order, on the application as it thinks just….”.
3. Prior to the implementation of the CPR
in 1999 it had long been held by the Court of Appeal that the language of Order
27 rule 3 was capable of embracing admissions made before the relevant action
was started. It was accepted that a party needed the permission of the Court
to withdraw an admission, whether it had been made before or after the
commencement of proceedings.
4. In Gale v Superdrug Stores Plc [1996]
1 WLR 1089, the
majority of the Court of Appeal (Thorpe L.J dissenting) held that when a
defendant sought to withdraw or amend an admission the judge had to balance the
prejudice against which the defendant would suffer if he was deprived of his
prima facie right to resile from his admission against any prejudice which the
claimant stood to suffer if the admission was withdrawn. That prejudice had to
be established specifically by the claimant; it was not capable of inference.
The position post-CPR
5. CPR r 14.1 provides as follows:
“(1) A party may admit the truth of the whole or any
part of another party’s case.
(2) He may do this by giving notice in writing (such as
in a statement of case or by letter).
(3) Where the only remedy which the
claimant is seeking is the payment of money, the defendant may also make an
admission in accordance with –
a. Rule 14.4 (admission of whole claim
for specified amount of money);
b. Rule 14.5 (admission of part of claim
for specified amount of money);
c. Rule 14.6 (admission of liability to
pay whole of claim for unspecified amount of money); or
d. Rule 14.7 (admission of liability to
pay claim for unspecified amount of money where defendant offers a sum in
satisfaction of the claim).
(4) Where the defendant makes an admission
as mentioned in paragraph (3), the claimant has a right to enter judgment
except where –
a. The defendant is a child or patient;
or
b. The Claimant is a child or patient and
the admission is made under rule 14.5 or 14.7
(Rule 21.10 provides that where a claim is made by or on
behalf of a child or patient or against a child or patient, no settlement,
compromise or payment shall be valid, so far as it relates to that person’s
claim, without the approval of the court).
(5) The court may allow a party to amend
or withdraw an admission.
6. Paragraph 3.7 of the Pre-action
Protocol for Personal Injury reads as follows:
“Where liability is admitted, the presumption is that
the defendant will be bound by this admission for all claims with a total value
up to £15,000. Where the claimant’s investigation indicates that the value of
the claim has increased to more than £15,000 since the letter of claim, the
claimant should notify the defendant as soon as possible”.
Sowerby v Charlton
7. Sowerby was an action that arose out of the catastrophic personal injuries
suffered by the Claimant in April 2003 when she was visiting a property in
Richborne Terrace in London. The front door of the property was at a higher
level than the pavement and, in order to access the property, it was necessary
to ascend eight stone steps to the platform outside the front door. There was
a handrail on the left side of the steps but not on the right. To the
right-hand side of the front steps were steps leading down to a basement flat.
On each side of the front steps there was a very low stone pediment, about one
and a half to two inches high.
8. On the evening in question the
Claimant fell over the edge of the platform outside the front door, a distance
of at least eight feet onto the hard surface below as a consequence of which
she was rendered paraplegic.
9. In pre-action correspondence the
Defendant’s Solicitors admitted a breach of duty. Initially the admission was
made in a ‘without prejudice’ letter but was reiterated in an open letter at
the Defendant’s behest. The Defendant accepted subsequently that the decision
to admit liability had been an informed one, taken by solicitors who advised
their insurance client after taking into account the views of the reinsurers.
When proceedings were commenced the defendants denied primary liability in
their defence. Master Tennant granted the claimant’s application to strike out
certain paragraphs of the defence that put primary liability in issue and
subsequently Judge Playford QC sitting as a judge of the Queen’s Bench Division
dismissed the defendant’s appeal.
10. In Sowerby, the Court of Appeal
stated that its previous judgment in Gale should now be approached with
caution because it was concerned with a regulatory regime that was abolished on
26th April 1999 when the CPR came into force. Although technically
obiter dicta because the case was decided against the defendant on the basis
that it had no prospect of successfully defending primary liability, the Court
of Appeal stated as follows:
a. CPR r 14.1 does not relate to
admissions made pre-action but rather those admissions made after proceedings
have begun;
b. The presumption in the protocol that
the defendant will be bound by a pre-action admission applies only to claims
with a value of less than £15,000, which are likely to be allocated to the fast
track; no such presumption applies to pre-action admissions of liability in
multi-track value claims.
11. The effect of the judgment in Sowerby is that a party seeking to resile from a pre-action admission made in a
multi-track claim does not require the permission of the court to do so. The
status of a pre-action admission in those circumstances is evidential only.
12. In relation to the withdrawal of an
admission made after an action has been commenced the Court of Appeal in Sowerby commended and approved the unreported judgment of Sumner J in Braybrook
v Basildon and Thurrock University NHS Trust as offering valuable guidance on the way in which a court would exercise
its discretion whilst emphasising that the exercise of any discretion will
always depend on the facts of the particular case before the court. In Braybrook Sumner J stated thus (at para 45):
“(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) Amongst the matters to be considered will be:
(a) the reasons and justification for the application which 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 the admission; (e) the
public interest, in avoiding where possible satellite litigation,
disproportionate use of court resources and the impact of any strategic
manoeuvring.
(3) 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”.
13. It is perhaps not surprising that some
personal injury practitioners have greeted the decision in Sowerby less
than enthusiastically, with many claimants’ solicitors believing defendants are
effectively free to withdraw pre-action admissions and that there is little
they can do about it as the right to enter summary judgment only applies in
circumstances where the facts are sufficiently clear and that is not so in many
cases where a defendant has made a pre-action admission. Furthermore, it is
felt by claimants’ solicitors that the evidential use to which an admission
might be put is likely to be limited. Such has been the degree of
consternation about these matters that the Civil Procedure Rules Committee has
apparently been asked to consider whether an amendment to the CPR might be
appropriate.
14. In the recently decided case of Stoke
on Trent City Council v John Walley [2006] EWCA Civ 1137 the Court of
Appeal re-iterated that CPR 14.1 did not apply to pre-action admissions and
thus a party withdrawing an admission did not require the permission of the
Court. The Court held that the right approach where a pre-action admission was
withdrawn would be for the claimant to apply to strikeout the defence or part
of it pursuant to CPR r3.4. In order for a claimant to show that the
withdrawal of an admission would amount to an abuse of the process of the
court, it would usually be necessary to show that the defendant had acted in bad
faith. In order to show that the withdrawal of a pre-action admission was
likely to obstruct the just disposal of the case, it would usually be necessary
for the claimant to show that he would suffer from prejudice that would affect
the fairness of the trial. It is a high threshold for a claimant to cross.
15. It is interesting to note that the
Court of Appeal in Walley appeared to share the concerns of many about
the ostensible devaluation of pre-action admissions in multi-track claims.
Brooke LJ considered the matters raised in Sowerby merited the early
attention of the Civil Justice Council and thought there was ‘great force’ in
giving the status of an admission of liability in response to pre-action
protocol letter before action in an multi-track case ‘more powerful effect than
it at present enjoys’, a view shared by Wall LJ.
Emma-Jane
Hobbs
