Clyde & Co success offers further guidance on withdrawal of pre-action admissions

Clyde & Co has successfully appealed against the refusal to allow the withdrawal of a pre-action admission. The modest claim value initially pleaded was “fundamentally wrong” and new evidence changed the character of the claim.

Davis v Google (UK) Limited

The decision of His Honour Judge Bird provides further clarity as to the guidance in respect of withdrawing pre-action admissions of liability as laid down by the Court of Appeal in Wood v Days Healthcare. Unlike Wood, there was no judgment entered against another defendant, whilst allowing the withdrawal was acknowledged as potentially prejudicing the claimant. Furthermore, her prospects of succeeding were noted as “not good”. However, “the true and effective cause of such prejudice is not the withdrawal of the admission, but rather the claimant’s failure to share with the defendant its understanding of the claim”.

HHJ Bird stated that “a refusal to allow the defendant to withdraw the admission in this case might potentially send a signal to defendants that they should be wary before admitting liability in a straightforward, modest value claim”.

Background

The Claimant was an agency supplied Receptionist at an office occupied by the Defendant. On 2 August 2016, she alleges that on entering a cubicle in the ladies’ lavatory, “a wooden panel fell off the wall behind her, hitting her initially on the right parietal aspect of her head and then across her shoulders and upper back. She was knocked off balance and initially struggled to extricate herself from the cubicle”.

The claim was issued in the Claims Portal with a claim value of up £25,000 pleaded. An investigation of the site by the Defendant’s loss adjusters reached no conclusion as to how the panel came to fall, having found no defect. An admission of liability was made “on the basis that it had not been established as to how the panel had come to fall”.

Proceedings were issued on the cusp of limitation despite no medical evidence having been provided at that stage. Medical evidence was served in October 2019, pleading a claim value of up to £100,000. The issued proceedings were served in November 2019, attaching a Schedule of Loss valuing the claim far in excess of £100,000. The Schedule of Loss included a multiplier for life, an ongoing claim for care, past loss of earnings of around £59,000 and an ongoing annual loss of earnings with a pleading that the claimant may be "permanently unfit for work'".

Following our instructions to act on behalf of the Defendant, Google (UK) Limited, after proceedings were served, we made an application to resile from the admission of liability at the first opportunity.

First instance

The correct approach to resiling from a pre-action admission was set out in the Court of Appeal decision of Wood v Days Healthcare, with reference to the factors set out in paragraphs 7.2 of Practice Direction 14.

The following relevant facts from Wood arose in this instance, specifically that the value of the claim had dramatically increased. The claim had initially been modestly valued and the decision to admit liability was indicative of that.

At first instance, District Judge Goodchild had identified PD14 as applicable to our application to resile and further accepted that Days was relevant. However, the application was refused.

DJ Goodchild concluded that “taking into account the need to do justice between the parties and to consider the case justly and at proportionate cost”, she would not exercise her discretion to allow the admission to be withdrawn.

We appealed on behalf of the Defendant, arguing that the District Judge had, amongst other things:

• Failed to give sufficient weight to the substantial increase in the value of the claim and the Claimant’s conduct in identifying that increase to the Defendant;
• Failed to give sufficient weight to the prejudice suffered by the respective parties; and
• Failed to assess the Defendant’s prospects of successfully defending the claim if the admission were withdrawn.

The Claimant argued DJ Goodchild was entitled to find as she did and that:

• The admission was a carefully considered decision, offered only after a thorough investigation;
• The seriousness of the injury should have been apparent from the Claim Notification Form ('CNF'); and
• The claim could not be accurately valued in any event until such time as the medical evidence was available.

Outcome

The appeal was granted. HHJ Bird agreed with various elements of our submissions.

In considering the decision of DJ Goodchild, he concluded that she “fell into error” by holding that the claimant’s conduct was not “serious blameworthy conduct” and therefore irrelevant to considering her discretion.

HHJ Bird held “the very nature of the claim (not merely its value) fundamentally changed”. The Defendant was entitled to rely upon the express valuation in the CNF. Further, the Claimant is represented by experienced solicitors and the Defendant should have expected them to comply with the Pre-Action Protocol.

It was noted that “the claim did not suddenly change… to a claim valued at more than £100,000”. The breaches of the pre-action protocols permitted by DJ Goodchild were not excusable. Any prejudice suffered by the Claimant in permitting the withdrawal could “only be attributed to the claimant’s own failure to adopt the “cards face up on the table” approach”.

In granting our appeal, HHJ Bird was satisfied he was entitled to consider our application to withdraw the admission. Permission was further granted to withdraw the admission.

What can we learn?

• The decision provides further ammunition for defendants in fast-track or portal cases who wish to resile from admissions. In line with the decision in Wood v Days Healthcare, defendants should be entitled to review pre-action admissions where the value of the claim increases dramatically and seek to resile if necessary. Defendants should however be mindful of making the application at the first opportunity.
• To that end, HHJ Bird stated that “allowing withdrawal of the admission will encourage claimants to comply with the PaP and to engage with defendants in an open ‘cards face up on the table’ manner”.
• Furthermore, this decision gives reassurance to defendants that pre-action admissions will not be unfairly held against them. Disposing of claims quickly and efficiently should remain the focus of the litigation process, and pre-action admissions are a valuable part of that process. However, defendants should not be penalised for these admissions.