CPR 14 has been amended so that admissions of liability made prior to the issue of proceedings now have the same effect as admissions made post issue, so that the admission cannot be withdrawn without the permission of the court.

The new CPR Part 14

CPR 14 currently provides that the Defendant may make an admission by giving notice in writing and that the Claimant can enter judgment on the basis of that admission, save where either party is a child or Patient. The admission could be withdrawn only with the permission of the court.  Claimants argued that CPR 14 applied equally to admissions made prior to the issue of proceedings as to those made after proceedings were issued and served.  Reliance was placed on the Pre-Action Protocol for personal injury claims, which raises a presumption that an admission made in a fast track type claim would be binding on the Defendant.  However, Sowerby v. Charlton decided that CPR 14 applied only to admissions made after service of proceedings.  Then, in Walley v. Stoke on Trent CC, the Court of Appeal hinted heavily that the rules should be changed to give an admission of liability in response to a Pre-Action Protocol letter greater force.

The Rules Committee were clearly thinking on the same lines and we now have revisions to CPR 14 which come into effect on 6 April 2007 and will apply to any admission made on or after that date.

The new CPR 14.1A applies to any admission in writing by the Defendant of the whole or part of the Claimant’s case made prior to the issue of proceedings, providing that the Claimant has sent a Letter of Claim in accordance with the Protocol (or otherwise if the admission is stated to be made under Part 14).

When such an admission is made, it can only be withdrawn if the Claimant agrees or, after proceedings are issued, the court gives permission.  After proceedings are commenced, the Claimant may apply for judgment on the basis of the pre-action admission.  Judgment is likely to be granted unless the Defendant succeeds in a cross application to withdraw the admission.

The rule change means that, if an admission has been made by a Defendant prior to the issue of proceedings, it will no longer be possible to serve and lodge a Defence resiling from that admission.  The Defendant will have to apply to the court for permission to serve a Defence if it wishes to resile from an admission and will have to persuade a court that it should be allowed to do so.  The court will consider the conduct of the parties and the balance of prejudice. Whether the rule change will mean that it will be more difficult to withdraw from a pre-action admission remains to be seen but insurers would be advised to ensure that the full implications of the admission are understood before it is made. 

Guidance as to how the court is likely to approach an application to set aside a pre-action admission in a multi track claim can be gained from the cases of Sowerby and Walley (see below). 

Sowerby –v- Charlton

[2005] EWCA Civ 1610

On 26.04.03, the Claimant visited the Defendant’s property, the front door of which was up a flight of eight stone steps from pavement level.  It appears the Claimant fell from a platform outside the front door a distance of 8 feet or so onto steps leading to a basement flat.  On 10.05.04, the Defendant’s solicitors wrote a "Without Prejudice" letter which stated that the Defendant was "prepared to admit a breach of duty" but argued for contributory negligence.  On 30.06.04, the Defendant’s solicitors made the same admission in an open letter.  Proceedings were commenced and, on 24.09.04, the Defendant served a Defence denying primary liability.  The Claimant applied to strike out the denial and argued that the Defendant required the court’s permission under CPR 14 to withdraw the admission.  The Defendant argued that CPR 14 applied only to admissions made after service of proceedings.  The Claimant succeeded before the Master and Judge on appeal and the Defendant appealed again.

The CA held: CPR 14 was never intended to cover pre-action admissions of liability, so a Defendant does not require court permission to resile from a pre-action admission.  However, on the facts, there was no real prospect of the Defendant resisting a finding of primary liability so summary judgment could be entered for the Claimant.  The court went on to approve the following guidelines for determining whether to permit withdrawal of an admission made after an action is commenced:

• The court will consider all circumstances to give effect to the over-riding objective.
• Factors to be considered will be:

          1. reasons and justification for the application;

          2. balance of prejudice;           

          3. whether any party has been the author of any prejudice they may suffer;

          4.  the prospects of success of any issue arising from the withdrawal of an admission;

          5.  avoidance of satellite litigation, disproportionate use of court resources and the impact of strategic manoeuvring.

• The nearer an application is to a final hearing, the less chance it will have of success, even if there is clear prejudice.

Walley v Stoke on Trent City Council

[2006] EWCA Civ.1137

On 28.08.01, the Claimant injured his knee when descending from the passenger seat of a refuse wagon, allegedly due to refuse bags on the floor of the cab.  After an initial denial, a loss adjuster wrote on 13.06.03 admitting liability.  Subsequently, his work was reviewed and found to be unsatisfactory and, on 12.05.04, solicitors wrote to rescind the admission. The Claimant issued proceedings and the Defendant filed a Defence denying liability and alleging contributory negligence.  The Claimant applied to strike out the Defence based on the admission. The District Judge considered the matter by reference to CPR 14 and found that the Council should be bound by the admission, even though it had good prospects of defeating the claim.  On appeal, heard on 09.08.05, a Judge also considered the matter by reference to CPR 14 and exercised his discretion in favour of the Claimant by finding that the Council was bound by the admission. 

The Council did not appeal again until it saw the CA decision in Sowerby v Charlton which held that CPR 14 applied only to admissions made in the course of proceedings.  It sought permission to appeal out of time which was granted. 

The Claimant argued that there was substantial prejudice because of the delay between the admission and its withdrawal and the length of time that would now pass to trial, though he had to accept that no witness evidence had been lost or documents destroyed. The Claimant’s disappointment amounted to prejudice as did the potential difficulty surrounding funding arrangements.  It might prove more difficult to obtain ATE cover once the admission had been withdrawn and liability denied.  

The CA held: (1) For the withdrawal of an admission to amount to an abuse of process it would usually be necessary to show that the Defendant had acted in bad faith.  There was no suggestion of bad faith here, merely incompetence on the part of a loss adjuster. (2) To show that a withdrawal of admission would obstruct the just disposal of the case, it will usually be necessary for the Claimant to show that he will suffer some prejudice which will affect the fairness of trial, eg loss or destruction of evidence, inability to pursue lines of enquiry, death of witnesses etc.  Funding difficulties might be a factor, although ATE premiums were available without the need for a Claimant to pay in advance. Disappointment alone, whether creating uncertainty, turmoil or even despair, could not ever be said to obstruct the just disposal of a case. On the facts, the Defendant had shown a reasonable prospect of defending the claim and the Claimant had not demonstrated any prejudice from the withdrawal of the admission so the appeal was allowed.

Simon Cradick can be contacted on 029 2038 5464 or be email.