Defendants are encouraged to make prompt pre action admissions of liability. Often it is only after such admissions have been made that evidence emerges which casts doubt on a claim’s legitimacy. In those circumstances an application to resile from an admission is required unless consent is forthcoming. An appreciation of how the courts approach such applications is therefore important, especially in the context of those claims where a defendant intends to rely upon an allegation of fundamental dishonesty.
In Arboleda-Quiceno v Newham London Borough Council  EWHC 2660 Mrs. Justice Lambert upheld an appeal brought in respect of a Deputy Master’s refusal to allow the defendant to resile from an admission of liability in a defence to a claim where fundamental dishonesty and section 57 of the Criminal Justice and Courts Act 2015 was to be relied upon. The case provides useful guidance as to the approach of the courts as to those matters set out in paragraph 7.2 of the Practice Direction to CPR Part 14 and in particular (i) prospects of success, (ii) prejudice (both to the claimant if the application were allowed and to the defendant if the application were refused) and (iii) the administration of justice.
The claim was made in respect of an accident at a recreation ground managed by the defendant. The claimant was playing football and his case was that he fell as a result of his foot becoming stuck in a hole in the astro-turf pitch. In the letter of claim sent in October 2015 the injuries were said to be a fracture of the right tibial plateau requiring ongoing treatment. As to value, it was stated that the claim “fell well beyond the value considered for any pre action protocol”.
The defendant admitted liability. The claimant later made an application for an interim payment and served a report from an orthopaedic surgeon which concluded that the claimant had been completely disabled by his knee injury. Proceedings were issued and the Schedule of Loss totalled over £2.9 million. The defendant made an application to resile from the earlier admission and it was denied that the claimant’s foot had ever become stuck in the hole and said that the injuries were due to the claimant landing awkwardly. The defendant raised the defence of fundamental dishonesty and section 57 of the Criminal Justice and Courts Act 2015. The defendant also served witness evidence stating that there was a hole in one of the pitches but at the time of the accident the claimant was playing on a different pitch.
At the hearing it was contended that the admission should be withdrawn on the basis that the claim in the Schedule of Loss was different in character from that which had been intimated in the letter of claim, but this was rejected by the Deputy Master. She concluded that although the potential claim of “just shy of £3 million” was higher than perhaps had been anticipated, the claim itself was not of a different character. The letter of claim described a serious knee injury with ongoing treatment, and it was always likely that the claim would be of significant value.
The Deputy Master went on to conclude that permission to withdraw the admission should be refused on the basis of three factors: the merits of the defence, the issue of prejudice and the administration of justice. Her consideration of the merits of the defence involved her analysing the evidence in some detail. Inconsistencies in the statements of the defendant’s witnesses were identified, it was observed that there was no documentary evidence dealing with the allocation of pitches and noted that some of the defendant’s evidence was hearsay only. Whilst she concluded that the defence was not fanciful and that there was a real prospect of the defence succeeding, her view was that the defence was not “very strong bearing in mind the totality of the evidence”. She also found that the claimant would be prejudiced if the admission was withdrawn, concluding that he would be in real difficulties in tracking down relevant witnesses.
There were two main grounds of appeal. The first was that she wrongly concluded that the claim intimated in the letter of claim was not of a different size and character to that which the defendant faced following service of the proceedings. The second was that she erred in her approach of the prospects of success of the defence.
Mrs. Justice Lambert held that the Deputy Master was not wrong to conclude that the claim was not of a different size and character from that in the letter of claim. The letter of claim had been drafted only four months after the accident and contained an accurate summary of the injuries as they were understood to be. The character of the claim could not be said to have changed as the claim in the letter of claim was not characterised in terms of value or significance.
However, Mrs. Justice Lambert did accept the submission that the approach as to the merits of the defence was wrong. Having found that the defence of fundamental dishonesty had a real as opposed to fanciful prospect of success, it was an error to go on to evaluate the case in detail on the papers so as to conclude that the defence was not particularly strong. She did not have the benefit of seeing or hearing from the witnesses and her assessment of the evidence was bound to be incomplete. Although an assessment of the merits of the claim is one of the factors to be taken into account under paragraph 7.2 of the Practice Direction, it was held that there must be limits to the permissible examination of evidence for that purpose at an interlocutory stage. There may be mistakes or inconsistencies in the witness statements, but none were so egregious as to reasonably conclude that the weight to be accorded to that evidence could be determined on the papers alone.
Further, the Deputy Master did not evaluate all of the evidence, for example there was no consideration given to the absence of any mention of the hole by the claimant to the paramedics or clinicians at hospital and that feature demonstrated the real danger of undertaking a nuanced analysis of the merits of the defence beyond recognising that there was a real liability issue to be tried. Given that this was a factor which obviously carried significant weight, the decision could not stand.
The issues were therefore to be addressed afresh and Mrs. Justice Lambert found that the evidence raised a defence with more than a fanciful prospect of success. She also agreed that the two other factors of particular significance were the question of prejudice and the administration of justice.
The submission that the claimant would be prejudiced if the admission was withdrawn was rejected. A video of the aftermath of the accident demonstrated that the claimant’s wife, family and friends were present on the side lines. There was no evidence that any of those potential witnesses were now unable to say upon which pitch the claimant was playing. On the other hand, if the admission were not withdrawn, the defendant would be deprived of running its defence on liability in a substantial claim where the reliability of the account given by the claimant was in doubt. Permission was given to the defendant to withdraw the admission of liability and the appeal was therefore allowed.
As to the practice points which emerge:
- The test to be employed in respect to the prospects of success of the defence are whether it has a real prospect of success, i.e. the court will disregard prospects which are false, fanciful or imaginary.
- The issue of likely evidential prejudice if the application is granted is an important feature. Any claim of evidential prejudice should be closely examined. An absence of any identified evidential prejudice in response to an application should be highlighted at the hearing.
- A linked issue to the question of evidential prejudice is how long an admission remains “live”. In order to minimise the prospect of a finding that a claimant will likely face evidential prejudice, defendants should write withdrawing the admission as soon as it becomes apparent that it is desirable to do so.
- The question of whether the claim is of a different size and character to that which was intimated at the time the admission was made is also of importance. Particular caution should be exercised prior to making an admission where the value of the claim is not intimated. In order to maximise the prospects of success using this ground, an admission can make reference to any intimated limitation on the value of the claim, state that reliance is being placed upon it and refer to commercial considerations.