Recent guidance upon exercise of discretion as to withdrawal of admissions

J v A South Wales Local Authority [14.09.20]

In this case the claimant successfully appealed a decision in which permission had been granted to resile from admissions.

Background

The factual background to the case is somewhat complex but it is significant that the claimant, referred to as “J” for reasons of confidentiality, alleged negligence in the course of care provided by the local authority to the claimant.

As set out in the judgment, the appeal was of an order dated 4 October 2019:

"Pursuant to which the Local Authority was permitted to withdraw three admissions of liability made by the Local Authority to J. These admissions were made in two letters written by the Local Authority's solicitors to J's solicitors (respectively dated 5 April 2012 and 3 May 2012) and in the Local Authority's Defence to J's claim, dated 5 December 2012. In the Order, the Judge gave permission to the Local Authority to withdraw its admissions and to amend its Defence. The essence of the draft Amended Defence was to put liability in issue."

The application to appeal that Order was made in 2019 and arose from an apparent change in the law as regards the existence or otherwise of the duty of care relied upon by the claimant (see CN & GC v Poole Borough Council [2019]).

An application in relation to prior admissions is to be made pursuant to the Civil Procedure Rules (CPR) Part 14 / CPR Practice Direction (PD) 14. The basis for the exercise of discretion is wide and is set out in non-exclusive terms at paragraphs 7.1 and 7.2 of CPR PD14.

Decision

At paragraph 20 of the judgment Mr Justice Marcus Smith summarised the reasoning in the first instance decision and the discretion set out under CPR PD 14.

In considering on appeal the relevant grounds relied upon, the judge addressed these in reverse order, starting with Ground 3 (stage of proceedings) but rejected this as a basis for the appeal given that withdrawal of the admissions would have no effect upon the management of the case.

Ground 2 referred to the prejudice, which would be caused to the claimant by any resiling from the admissions and especially in terms of evidence, given the time which had expired between the date of the original admission and the application albeit in the light of the decision in CN & GC v Poole Borough Council. The appeal was allowed upon the basis of Ground 2.

Ground 1 related to “the interests of the administration of justice” (7.2 (f) of CPR PD14). Whilst accepting the reasoning of the lower court’s decision up to a point, the judge did however observe that:

          "… this was not a settlement: but it bears many of the hallmarks of a settlement,

          and the Judge should have considered the importance in this case of stability in

          closed transactions."

Comment

The effect of the decision on appeal is that the local authority were prevented from relying upon what might have been a successful defence. At first glance that is a somewhat unexpected outcome. However, the competing principle was the ‘catch all’ provision as to the administration of justice under CPR PD14 7.2 (f).

The decision reiterates that the greatest of care should be taken before any open admission is made certainly of such a significant and final nature as to breach of duty.

At the very least advice should be sought especially in cases either where quantum is or may become significant or where there may be wider ramifications. Where any doubt arises (and subject to advice) an alternative course might be to indicate upon a without prejudice basis that the matter would be dealt with upon a 100% quantum basis but without this amounting to a formal admission.