The decision whether or not to admit certain facts or even liability in response to a claim is always an important one.
Part 14 of the Civil Procedure Rules allows a party to withdraw an admission, subject to obtaining permission from the Court. Developments in case law this year show that the Practice Direction to Part 14 and previous case law will not alone determine the court’s decision. The court will only permit admissions to be withdrawn if it is in the interests of justice to do so.
CPR Practice Direction (PD) 14 provides that, in deciding whether to allow withdrawal, the court will have regard to all the circumstances, including whether new evidence has come to light, the parties’ conduct, the prejudice that may be caused to either party if the application is allowed or refused and the stage of the proceedings. In Woodland v Stopford the Court of Appeal provided guidance on the court’s power under CPR 14. In particular, at paragraph 26, Lord Justice Ward said that CPR 14 confers a wide discretion on the court to allow withdrawal; that the factors in the Practice Direction are not listed in order of importance; and that the weight to be given to the relevant factors will vary from case to case.
Should a fact be admitted?
A party might want to admit facts in order to limit the issues or to help advance a defence case. However, doing so carries some risk. If there are unexpected developments in the case that make the admission no longer desirable, the party which made the admission is more likely to be held to it than not.
In Bayerische Landesbank Anstalt Des Offentlichen Rechts v Constantin Medien AG, one of the civil claims arising from the alleged bribe paid by Bernie Ecclestone to Dr Gribowdky at Beyerische Landesbank in connection with the sale of its interest in Formula 1 in 2006, the High Court, rejecting an application for permission to withdraw an admission of a fact, considered the factors to be taken into account.
The judge said that the adequacy of the explanation as to why a fact had been admitted, the fullness of the explanation as to why it was necessary to withdraw the admission and the prejudice to the opponent’s position are merely factors to be considered in each case. The decision one way or the other will be determined by the overriding interests of justice.
The judge also identified the difference between withdrawal of an alleged fact and withdrawal of an admission of an alleged fact, on the basis that a party that alleges a fact is concerned not only with whether the fact is true but also whether the fact can be proved; whereas a party admitting an alleged fact is concerned only with whether the fact is true and not whether it can be proved.
This means that a party who alleges a fact and then discovers that it cannot be proved may readily obtain the court’s permission to withdraw the allegation at any time, usually on terms that the opponent’s costs incurred in dealing with the withdrawn allegation are paid.
Each case will be determined on its individual merits. However, to stand any real chance, it is probably necessary to prove not only that the admitted fact is not true, but also that any prejudice to the opponent is outweighed by the interests of justice. In effect, that allowing the admission to stand will result in an injustice.
It therefore follows that facts should not be admitted unless it is certain they are true or inconsequential. The economics of litigation, particularly claims commenced in the EL/PL Portal, might lead to a decision to admit facts that the claimant is thought likely to prove. However, usually not all relevant evidence is available at both pre-action and pleadings stage. Where there is uncertainty, the better option is to make no admission and to require the claimant to prove the alleged facts.
By coincidence, on the same day that the court gave its judgment in Constantin Median, a Master in the Queen’s Bench division in Mack v Clarke allowed a defendant to serve a revised defence withdrawing a partial admission on causation in an injury claim. The apparently crucial distinction from the Constantin Median decision was that the admission did not admit causation in its entirety. The Master decided that such a partial admission did not fall to be considered under CPR14 because although the wording of CPR14.1 referred to “the whole or any part of another party’s case”, the reference to “any part of another party’s case” was a reference to a distinct whole element such as breach of duty, causation (in its entirety) or a head of loss, and that CPR 14 was primarily directed towards the sort of admissions that entitled a Claimant to enter judgment. In this case the partial admission could not have led to any such entitlement and had anyway not been clear and unequivocal.
Don’t admit liability unless you really mean it.
Whilst admitted facts are likely to be difficult to be put back in issue, getting the court to agree to reverse an admission of liability is even harder.
In Cavell v Transport for London an admission of liability subject to causation was held to have been an admission of liability. In that case the claims handler provided no explanation as to why liability had been admitted and the judge decided it would not be in the interests of justice to allow the admission to be withdrawn when there was no evidence that the decision had not been properly made.
In Clark v Braintree Clinical Services Ltd the defendant’s admission of liability subject to the claimant subsequently proving certain facts was held to be an admission of liability from which the court’s permission was needed to withdraw. In deciding to refuse permission to withdraw the admission, the court considered the expert evidence to establish whether the defendant was seriously disputing liability; the lateness of the application to withdraw the admission; the prejudice to the claimant; and the effect of allowing the application on the court timetable. In all the circumstances, the court decided that it was not in the interests of the good administration of justice to allow the admission to be withdrawn.
Whist obtaining permission to withdraw an admission of liability is difficult, it is nevertheless possible if the court decides that the interests of justice justify it. In Blake v Croasdale and another the claimant suffered brain damage when a passenger in a car accident. The defendant’s insurer initially thought it was dealing with a low value claim which was issued in the Claims Portal with a likely value of less than £25,000. In response to the Claim Notification Form, the insurer admitted primary liability whilst alleging contributory negligence and expressing the view that the claim was not suitable for the Portal. After seeing initial medical reports the insurer offered £100,000. When proceedings were eventually issued, the claimant’s provisional schedule claimed between £3m and £5m, which might increase. The defence pleaded an ex turpi defence on the basis that the claimant’s injury was caused by his own criminal act as he was engaged on a criminal enterprise as a drug dealer.
The court decided that the ex turpi defence being presented did not trump the admission. However, in considering the defendant’s application to withdraw the admission, the judge considered all the circumstances of the case as set out in Practice Direction 14 and decided that it was in the interests of justice to allow the admission of liability to be withdrawn. The judge decided that the insurer had initially thought it was dealing with a low value claim and decided to admit liability rather than run the ex turpi defence on the basis of proportionality. He thought that was a sensible approach and did not want to discourage defendants from acting proportionately. He also thought that the defence had a realistic prospect of success, and allowed the admission to be withdrawn.