Blake v (1) Croasdale and (2) Esure Insurance Limited  EWHC 1336 (QB)
This is a particularly interesting case where the High Court considered the merits of the second defendant’s application to withdraw from an admission of liability and to raise the defence of ex turpi causa.
This claim arose from a road traffic accident but the same principles will be applied to casualty claims in respect of liability admissions and raising defences of ex turpi causa.
In this case, the first defendant had driven on the wrong side of the road during a police chase and had collided with a car. The claimant was a rear seat passenger in the first defendant’s car and sustained severe brain injuries as a result of the accident.
The claim was pursued in the portal for low value RTA claims of up to £25,000 in value. The second defendant insurer admitted primary liability for the accident but intended to raise an argument for contributory negligence because the claimant had not been wearing a seatbelt, and the first defendant had been using drugs.
At the time, when proceedings were issued, the claim was valued at between £3,000,000 and £5,000,000. The second defendant insurer pleaded that the claimant’s injury had been caused by their own criminal act as a drug dealer operating jointly with the first defendant. As a result, the second defendant applied to withdraw its admission of liability and to plead the defence of “ex turpi causa”, on the basis that the claimant’s cause of action had arisen from their own illegal act of dealing drugs so they should be prevented from pursing the claim.
In respect of the admission of liability, the High Court held that it was binding and could only be withdrawn by consent or with the permission of the court.
The High Court concluded that the defence of ex turpi causa and the defence of contributory negligence both had reasonable prospect of success and could not be struck out. It was specifically held that whilst the second defendant had access to material from an early stage, allowing it to raise a defence of ex turpi causa, the second defendant genuinely did not believe that it was facing a multi-million pound claim because the claim had been started in the RTA portal for claims not exceeding £25,000 in value.
The High Court held that neither party’s conduct could be criticised. Instead, there would be prejudice to the second defendant if they could not rely on their defence. As a result, the second defendant’s application to withdraw the admission of liability was successful. Also it was held that the sensible cause of action was for both the ex turpi causa and contributory negligence defence to remain on the pleadings and to proceed to trial.
What this means for you
This case shows that admissions of liability can be withdrawn in certain circumstances, in order for a defendant to be able to raise a defence of ex turpi causa. In this case, the High Court concluded that the second defendant had truly believed that it was dealing with a lower value RTA claim. Further, the allegations of criminal conduct do not appear to have been known to the second defendant at the time when the admission was made.
This judgment should not be taken to mean that an increase in the value of a claim is enough to justify a change in mind in respect of liability. It would therefore be dangerous to assume that the courts will allow a defendant to withdraw a liability admission, just because there has been an increase to the value of the claim. However, the value of the claim and the question of proportionality may be factors that are taken into account when the courts consider all the circumstances of the case when deciding whether an admission of liability can be withdrawn.
In respect of other factors that were considered, the High Court took into account the fact that the second defendant had made its application to withdraw from liability not long after proceedings had commenced and there was no imminent likelihood of trial. Also, the court concluded that neither the second defendant nor the claimant had acted in a way that could be criticised, and on balance, the second defendant would be more prejudiced if they were not permitted to withdraw the liability admission and have the opportunity to submit an ex turpi causa defence.
A further point to note is that pre-action admissions in portal claims are binding and may be withdrawn only in circumstances where the other party consents or if the court gives permission. In most cases, it will be unlikely that the opposing party will agree to an admission of liability being withdrawn so, as a result, permission from the court will need to be obtained. As a result, careful consideration needs to be given in respect of liability and whether it should be admitted because these admissions are not easily withdrawn.