18 July 2006

Resiling from admissions

Resiling from Admissions - a commentary on the CPR and associated case law
Jonathan Godfrey - Park Lane Chambers

Pre-CPR RSC Order 27 Rule 3 determined that an admission of fact made by a party in his pleadings or otherwise was capable of embracing admissions made before the relevant action commenced.

Whether a party was able to resile from any admission made pre or post proceedings depended upon a wide discretion looking at a tripartite test of whether the application was made in good faith, that a triable issue with reasonable prospects of success evolved and whether the prejudice to the plaintiff could be adequately compensated Gale v Superdrug [ 1996 ] 1 WLR 1089.

Advent of the CPR

With the advent of the CPR , Part 14.1 allowed a party to admit the truth or otherwise of another party’s case, but Part 14 ( 1 )( 5 ) contained the proviso that
“the court may allow a party to amend or withdraw an admission”.
In addition, and in apparent contradiction to CPR Part 14 ( 1 )( 5 ) , the pre-action protocol for personal injuries provided at paragraph 3.9 that “where liability is admitted , the presumption is that the defendant will be bound by this admission for all claims with a total value of up to £15,000.
What was the position with respect to cases over £15,000? Furthermore, did the admission set out in CPR Part 14 apply to pre-action admissions ? The CPR was ambiguously silent.
In Salter v McCarthy [ 2002 ] at first instance, it was decided that Part 14 did not apply to pre-action admissions , but that Paragraph 3.9 was binding.

In Flavis v Pauley [ 2002 ] again at first instance, where a post proceedings admission was made, in a claim worth £700,000 , the court applied the tri-partite test in Gale ante. This route was followed in the cases of Lenton v Abrahams [2003 ] , Ali v Car Nation [ 2004 ] and Hamilton v Hertfordshire CC [ 2003 ].

Other first instance cases applied the more general prejudice test introduced in Sollitt v Broady [ 2000 ] CA . In this context, reference is to be had to Beckett v First Choice [ 2003 ] and Thorpe v John Lewis [ 2003 ] and Fanning v Kent Ambulance Trust [ 2004 ].

The court’s applied no uniform approach, but a number of points were forthcoming ( a ) generally the first instance court’s were applying Paragraph 3.9 of the protocol as binding in fast track cases (b ) pre-action admission as well as post action admission was seen to apply to CPR Part 14 and (c ) in relation to multi track cases the courts were applying a discretion to withdraw, with Gale and Sollitt being seemingly applied .

Matters clarified ?

The vexed question of Part 14 admissions came before the court in Sowerby v Charlton [ 2005 ] EWCA Civ 1610. Liability was purportedly admitted pre-issue, but subsequent to proceedings being issued the defence put primary liability in issue. It was admitted that the pre-accident admission was an informed one having sought solicitor’s advice. The decision to resile was taken post advice from counsel. At first instance and on appeal, the court struck out those paragraphs of the defence putting liability in issue. The action was multi track in scope.

The matter came before the Court of Appeal and judgment was handed down on 21st December, 2005. The leading judgment was provided by Brooke LJ. Detailed perusal of his judgment leads to a very clear understanding of the interpretation given by the court to CPR Part 14. The main points are these :
a. The CPR are principally concerned with the regulation of cases after an action has started. They do away with the language of a “ cause of matter “ and speak of a “ case “ ;
b. The regulatory scheme has been so drafted whereby the rule drafters had not intended a pre-action admission of liability to be embraced by the words “ a party may admit the truth of the whole or any part of another party’s case “ as per CPR Part 14 ( 1 ). Analogy is made to an admission of guilt made to a police officer and an admission of guilt made when a charge is brought in court. A “ party’s case “ was not formulated until particulars of claim were prepared, and a person could not be said to be a “ party “ until proceedings were brought ;
c. Consideration or the pre-action protocol for personal injury actions and the presumption specified at paragraph 3.9 made it clear that the “ protocol did not intend any such presumption to apply to pre-action admissions of liability in multi-track claims “ ; and
d. Any admission made post proceedings could be withdrawn on application by the Defendant ;
e. In applying to withdraw an admission , Brooke LJ at paragraph 35 of his judgment stated that the unreported judgment of Sumner J in Braybrook v Basildon & Thurrock University NHS Trust , 7th October, 2004 offered “ invaluable guidance “ on the way in which a court should exercise its discretion when determining whether or not to permit the withdrawal of an admission made after an action was commenced. The usage of Gale ante was specifically disapproved as it concerned the effect of a regulatory regime abolished with the advent of the CPR ;
f. The dicta of Sumner J in Braybrook ante , approved by Brooke LJ , provides :
i. In exercising its discretion the court will consider all the circumstances of the case and seek to give effect to the overriding objective.
ii. Amongst the matters to be considered are :
a. The reasons and justification for the application which must be made in good faith ;
b. The balance of prejudice to the parties ;
c. Whether any party has been the author of any prejudice that they may suffer ;
d. The prospects of success of any issue arising from the withdrawal of an admission ; and
e. The public interest , in avoiding where possible, satellite litigation , disproportionate use of court resources and the impact of any strategic manoeuvring .
iii. The nearer any application is to a final hearing the less chance of success there will be even if the party making the application can establish prejudice. This may in itself be decisive if the application is shortly before the hearing.
The upshot of Sowerby is that in any multi track case CPR Part 14 was never intended to apply to any pre-action admission and that the withdrawal of any post action admission can be sought on application with the exercise of the discretion to withdrawal dependant on the facts of each particular case.

Are pre-action admissions redundant ?

The impact of Sowerby would say so in relation to CPR Part 14. It remains a query whether it can be canvassed that the pre-action protocol still applies to all pre-action admissions made in fast track cases. In which case, is it still conceivable to contend that the presumption still applies in those cases, with a discretion of whether or nought to resile based on those matters set out in the judgment of Sumner J in Braybrook ! Arguable may be , probable to succeed , unlikely .
Given that the bolt has been firmly applied to shut the door in relation to CPR Part 14 admissions , is it possible for the Claimant to volunteer another route relying on the pre-accident admission ? In this context, does the doctrine of promissory estoppel avail itself in relation to pre-action admissions ?

The doctrine of promissory estoppel applies where there is an unequivocal representation ( by either words or conduct ) by A relied on by B Hughes v Metropolitan Railway Co [ 1887 ] 2 App Cas 439.

The application of promissory estoppel has been considered in relation to pre-action admissions at first instance in the Lancaster County Court in the case of Pearson v North Yorkshire County Council 6th March, 2006 . It related to a fast track matter in which the Defendant had made a pre-action admission of liability in a highway tripping case.

The Claimant relied on the decision of Mrs Justice Gloster DBE in Fortisbank SA v Trenwick International Ltd [ 2005 ] EWHC 399 as demonstrative of how the doctrine of promissory estoppel applied to a case where the Defendant seeks to raise a defence which it has previously promised not to raise.

In Fortisbank ante, the doctrine was being utilised to prevent the defendant raising a limitation defence which it had previously promised not to raise. At Paragraph 30 of her judgment , Gloster J stated that :
1. The Claimant must show that there is a clear, unequivocal , unambiguous and unconditional promise by the insurers that they will not raise the defence. The focus has to be on whether they have given up that right ; and
2. Once the representation in unequivocal form has been established, a Claimant has to establish that, relying on such a promise or representation, the Claimant has altered its position to its detriment or otherwise relied on the promise so that it would be inequitable or unconscionable for the insurer not to be held to the promise.

In Pearson , the Claimant contended that the unequivocal representation was the written admission of primary liability and that the Claimant had acted to her clear detriment in that

( a ) no investigations were made by the Claimant . She took photographs of the defect but did not actually measure the defect, nor did she keep the original digital photographs. Only copies were available; (b ) no investigations were made into primary liability by the Claimant’s legal advisers, the admission having been made pre their instruction and ( c ) enquires would have been made with neighbours as to the size of the defect and any complaints. It was 4 years post accident that the application was made and any such enquiries would be hopeless .

Further, the Claimant contended that it would be unconscionable for the Defendant to be allowed to resile for the reasons set out at Paragraph 19 above, and because the admission was made over 3 years previously. The Claimant therefore had a realistic expectation that primary liability was established and would now be bitterly disappointed that the issue was re-opened.

The Claimant succeeded in Pearson. It is not the subject of appeal. It is of practical value, but its value is probably limited to its facts, being a very clear enunciation of the doctrine. Furthermore, the doctrine of promissory estoppel is an equitable remedy, and it enables the court to do what is equitable in the circumstances. It is not an automatic bar to demonstrate that the claimant has acted on a promise to his detriment. If raised “ the court’s function is to determine what , if anything , is necessary to satisfy that equity in all the circumstances of the case “ per Lord Browne-Wilkinson in Roebuck v Mungovin [ 1994 ] 1 All ER 568 at 575 e.

Conclusion

All is not lost in relation to pre-action admission. In fast track cases the presumption in the protocol may still be invoked with realistic expectations. In both fast track and multi track cases, the scope of promissory estoppel is to be explored. Whilst only a first instance decision, Pearson ante exemplifies that the courts are prepared to take such an approach. As to post action admissions, Sowerby ante is now the line to be followed by a Defendant seeking to resile.