Not only was Henning Berg's recent 'win' in claiming £2.25 million compensation from Blackburn Rovers a concerning insight into corporate governance within that club, but it was also an altogether more familiar scenario involving a claim, an admission of liability and then an application by the defendant for permission to withdraw that admission when the 'dawn of realisation' reached a higher level within the business.
The parties’ arguments led Judge Pelling QC (sitting in the High Court, Chancery Division in Manchester) in Berg v Blackburn Rovers Football Club & Athletic Plc to comment that the overriding objective has been radically amended with effect from April and that its amendment is likely to have,
"a significant impact on the approach to be adopted to applications of this kind, which will now be approached by courts much more rigorously than perhaps has been the practice in the past, particularly where formal admissions are made on behalf of parties represented by experienced and specialist professional advisors."
The recent changes to the CPR have been well-documented. We are now beginning to understand the implications for the day to day management of claims and litigation when previous Court of Appeal authority (Woodward v Stopford, 2011) gave confidence of at least one 'second chance' to take a more focussed view on a given case and reach a different liability decision.
Every insurer claims department, every claims solution provider and every insurance broker should properly be regarded as 'specialist professional advisors'. They and any of their corporate (or personal lines) clients could therefore find themselves in the same position as Blackburn Rovers, wanting to revisit a previous liability decision but feeling the straps on the procedural straight jacket tighten.
Any claimant practitioner striving to hold onto an early admission of liability will seek to rely on this decision. All the more determined an effort will be made by a claimant whose claim has become a significant, high value or complex loss that could entail a level of compensation comparable to the award made to Henning Berg.
Mills & Reeve has had success in the past when arguing for the withdrawal of pre-litigation admissions, especially where the value of the claim has silently increased when proceedings are issued. This first instance decision can't be ignored. It undermines the chances of being able to put the defendant back on a level playing field where liability has previously been admitted, whether for commercial or other reasons. Getting those early liability decisions right, within much tighter timelines, is an ever-increasing priority for insurer, broker and the corporate defendants they serve.
The newly amended CPR has narrowed the goal posts, shortened the match and seemingly made it much harder to get the ball back if erringly launched into the neighbour's garden.