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Withdrawing an admission of liability is not undertaken lightly, but is sometimes necessary.
In particular, it can be a very important tool for limiting claims spend where a claim that is originally presented within the fast track later becomes a larger loss claim once quantum evidence is gathered.
We explore below the judiciary's approach to applications for permission to withdraw admissions in these circumstances, including consideration of the recent appeal decision in The Royal Automobile Club v Catherine Wright  EWHC 913 (QB).
The Civil Procedure Rules ("CPR") and accompanying Practice Direction ("PD") require a defendant to make an application to the court seeking permission to withdraw an admission of liability.
A pre-action admission can also be withdrawn if all parties consent or with court permission (if the matter has become litigated).
When considering an application for permission, the court will have regard to the factors listed in PD 14 para 7.2 namely:
Furthermore, as with all case management decisions, the Court considers the 'overriding objective' of "enabling the court to deal with cases justly and at proportionate cost".
The Royal Automobile Club v Catherine Wright  EWHC 913 (QB)
The Defendant appealed a refusal of permission to withdraw a pre-action admission.
The Letter of Claim proposed obtaining evidence from orthopaedic, pain and psychiatry experts following fibula and tibia fractures and the alleged development of complex regional pain syndrome. The Defendant argued that the matter should be submitted via the Portal. The Claimant disagreed and the parties decided to leave quantum to one side. The Defendant then admitted liability following investigations.
The Claimant gathered medical evidence from the aforementioned experts and presented a Schedule of Loss valuing the claim around £1m.
The Defendant initially raised contributory negligence arguments, later seeking to withdraw the admission of liability entirely. The Claimant issued proceedings, relying on the admission.
The Defendant issued an application to withdraw the admission arguing new quantum evidence had come to light. The Master at first instance was unimpressed, as the Letter of Claim made clear that the claim was reasonably anticipated to be significantly in excess of Portal value. The Defendant also argued that the Claimant had indicated that the claim was of modest value, but the Master did not find this to be supported by pre-action correspondence.
The application to withdraw the admission was refused. The Defendant appealed, which was heard in the High Court by Mr Justice Davis.
The possibility of prejudice to both parties was noted, and Mr Justice Davis considered the administration of justice on a more holistic level. Prospects of success was a central consideration and he noted:
"…it seems to me that the prospects of success on either side were not such that it inevitably means that leave should be given to withdraw the admission."
The Claimant had legitimate prospects of success whereas the Defendant only sought to put the Claimant to proof on her factual and liability claim. The appeal was dismissed.
Woodland v Stopford  EWCA Civ 266
This decision provided guidance from the Court of Appeal on how the PD 14 factors should be considered.
The Claimant complained that no reason was given for withdrawing the admission as no new evidence had come to light to justify it. The Court disagreed, stating that new evidence was not a prerequisite for an application for permission to withdraw an admission. The judge stated:
"A judge dealing with a case like this must have regard to each and every one of [the factors listed in paragraph 7.2 of Part 14] and give each and every one of them due weight… with a view to achieving the overriding objective. Cases will vary infinitely and the weight to be given to the relevant factors will inevitably vary from case to case."
Cavell v Transport for London  EWHC 2283 (QB)
The application proposed that the admission was made in error. The Court found no evidence to support this. The judgment reiterated the impact of these applications on the administration of justice:
"It cannot be in those interests to permit the withdrawal of an admission made after mature reflection of a claim by highly competent professional advisors when there is not a scintilla of evidence to suggest that the admission was not properly made."
Moore v Worcestershire Acute Hospitals NHS Trust  EWHC 1209 (QB)
HJ Bidder QC distinguished Woodland where an admission had been made in error based on a "careless and cursory" reading of an expert report stating:
"The fact that this was a pure mistake is distinguishable from the situation where there is a tactical change of an admission. That is the significance of it being a genuine mistake."
The Court found that restricting a Defendant with a real defence (as here) may create additional satellite litigation. Whilst case law relating to CPR 3.9 relief from sanctions was relevant, the 'Denton' 3-stage test was not the correct one to be considered in this kind of application.
Webster v North East Lincolnshire Council  8 WLUK 310
In contrast with Moore, the Defendant's investigations which led to an admission that they later sought to withdraw were considered a "monumental failure". The Court determined that the Defendant was the "[author] of their own misfortune" in directing its considerations of conduct and prejudice.
Foster v United Lincolnshire Hospitals NHS Trust  EWHC 573 (QB)
The Defendant made the application to withdraw just 3 weeks before trial and some 3 months after the new evidence relied on, an expert report, had become available.
The Claimant was unlikely to survive much longer, making an adjournment of the trial something that Mr Justice Foskett was not willing to contemplate.
Wood v Days Healthcare UK Ltd  EWCA Civ 2097
The Court of Appeal permitted the Defendant to withdraw an admission of liability largely based on new evidence coming to light in relation to quantum. The claim was initially presented as a Fast Track claim, indicating a value under £25,000, but was later presented with a value over £300,000. The Court found it "indisputable that highly material new evidence had come to light".
Financial Conduct Authority v Skinner & Others  EWHC 392 (Ch)
The Court determined that the admissions the Defendant sought to withdraw could not actually provide a defence to an offence under ss.19 and 21 of the Financial Services and Markets Act 2000.
A focus on prospects of success is unlikely to be such a determinative factor in civil claims where both parties are likely to have evidence to support or defend a legitimate case.
What can we learn?
This article was authored by Imogen Webb, Associate, and Leanne Conisbee, Legal Director.