Defendants and their insurers sometimes find themselves in the uncomfortable position of wanting to withdraw an early admission of liability in light of new evidence, the unexpected increase in a claim’s value or simply because a mistake has been made in assessing the liability position. The courts have often been reluctant to allow this, especially where no new evidence has come to light to warrant a departure from the admission. The recent judgment in Newham London Borough Council v Arboleda-Quiceno  7 WLUK 544 provides some clarity and is a welcome one for insurers who wish to withdraw a pre-action admission in a personal injury claim.
The Civil Procedure Rules provide that a party may, by giving notice in writing, withdraw a pre-action admission before or after the commencement of proceedings. Where proceedings have been started, an admission can only be withdrawn with the consent of all parties to the proceedings or with the permission of the court.
As a claimant is unlikely to agree to the withdrawal of an admission, defendants will usually have to apply to the court, which must take into account a number of matters. These include (but are not limited to): whether or not new evidence has come to light; the prejudice to the party in allowing or refusing the application; the prospects of succeeding with the part of the claim to which the admission relates; and the interests of the administration of justice. In Woodland v Stopford  EWCA Civ 266 the Court of Appeal held that the Court has a wide discretion under the Rules and the above matters to be taken into account are not listed in any hierarchical order. In particular, where one matter is not applicable, this should not bar a party’s application from being successful.
Despite the Court’s wide discretion under the rules, first instance decisions have often seen defendants’ applications to withdraw refused, driven in large part by the court’s desire to restrict litigation. This happened in the Newham London Borough Council matter.
In that case, the claimant had injured his knee whilst playing football on an astroturf pitch in the local authority's recreation grounds. He alleged that he was injured due to a hole in the astroturf and that the local authority had failed to carry out adequate inspections and maintenance.
Insurers admitted liability when the statement of value was said to be no more than £50,000. Proceedings were subsequently issued and around £3million was claimed. The local authority applied to withdraw the admission, alleging that the claimant was fundamentally dishonest in that he had simply jumped and landed awkwardly and because he had been on a different pitch to the one containing the defect.
At first instance the Master dismissed the application, relying on the prejudice to the claimant and the fact that whilst the local authority’s allegations of fundamental dishonesty had realistic prospects of success, the evidence in support was weak and contained inconsistencies. She also held that, despite the value of the claim having increased, it had not fundamentally changed in size or character.
On appeal, Lambert J agreed that the size and character of the claim had not fundamentally changed. The prognosis was guarded in the letter of claim and insurers could have contemplated that the claim could be substantial. However, this did not bar the application from being successful.
The Court of Appeal considered additional matters including the local authority’s prospects of succeeding with its allegations of fundamental dishonesty. Lambert J held that it was inappropriate for the Master to have undertaken a nuanced assessment on the papers where hearing the parties give evidence was key. Having found a realistic prospect of success in such a case, she should have left it there.
Lambert J also held that there would be no real prejudice to the claimant and with regards to the good administration of justice, it would not be right for the claimant to be compensated where there were doubts over the reliability of his account.
The judgment reinforces the position that where one of the matters for the court to take into account is immaterial, this will not bar the application from being successful. Further, it helpfully makes it clear that the applicant only needs to show that it has realistic prospects of succeeding with its claim or defence and it is not appropriate for a Judge hearing such an application to scrutinise the evidence to the standard of a trial judge.
We are able to make a balanced cost / benefit assessment as to the merits of making an application and indeed, we have had a number of successes in applications to withdraw from a pre-action admission.
Should you require any advice or guidance on claims whereby a pre-action admission has been made, a member of our team would be happy to advise. Please contact Langleys on 01904 683074.