DEFENDANT GIVEN PERMISSION TO WITHDRAW ADMISSION: CHANGE IN VALUE OF THE CLAIM IS A RELEVANT CRITERIA

An earlier post looked at the decision in Wood -v- Days Health UK Ltd & Others [2016] WHC 1079 (QB) where a defendant was refused permission to withdraw from an admission.  That decision was overturned by the Court of Appeal in Wood v Days Healthcare UK Ltd & Ors [2017] EWCA Civ 2097.

“The judge’s stark approach – that a risk of increase in quantum is inherent in any such claim – would in my view tend to discourage speedy admission of liability in (then) small claims; admissions made having regard to considerations of saving costs and of proportionality. It would tend to discourage them for fear of a subsequent withdrawal of admission of liability being refused on the basis advocated by the judge, even where quantum has in the interim enormously and unexpectedly increased. “

THE CASE

The claimant was a paraplegic and  the user or a motorised wheelchair. She was injured when the chair riser shot forward propelling her into a desk and injuring her.

• The first defendant was a company that supplied the wheelchair to the health authority.
• The second and third defendants had (effectively) merged and were now the relevant health authority bodies.
• The claimant obtained summary judgment against the health authority defendants.
• The first defendant had, earlier, made an admission of liability. It did so when it was believed the case had a very low value and without seeing all the relevant documents.
• The judge refused the first defendant’s application to resile from the admission.

ON APPEAL

The Court of Appeal allowed the first defendant’s appeal and  allowed it to resile from the admission.

THE JUDGMENT ON APPEAL

1. 1. Whilst I of course respect the fact that this was a discretionary decision of the judge, who is to be accorded a considerable margin of appreciation, I am in no real doubt that the decision to refuse permission to withdraw the admission was erroneous.

   2. The first point – by reference to paragraph 7 (2) (a) of the Practice Direction – is that it seems to me indisputable that highly material new evidence had come to light. This was in the form of further evidence as to the extent of the injury allegedly caused and, in consequence, quantum. What had been presented in 2010 as “currently” a fast-track claim, involving less than £25,000, had subsequently become in 2012 a claim in excess of £300,000.

   3. The judge had said that there was “no new evidence about the circumstances of the accident”. That perhaps is in one sense true, if one puts emphasis on the latter words. But as to the new evidence and claims concerning injury, causation and quantum the judge in paragraph 60 of her judgment effectively dismissed that as a “risk inherent in any personal injuries claim”: thereby, in effect, not acknowledging it as relevant new evidence at all. But such matters involve questions of fact and degree. If one is facing a claim reasonably considered to be worth less than £25,000 (it in fact seems Garwyns at the time for internal purposes had put a total reserve, including costs, of £16,250) an increase of a few thousand pounds perhaps may be an acceptable and foreseeable “inherent risk.” But a ten-fold increase, to over £300,000, is surely another thing altogether.

   4. Moreover, Garwyns had not acted entirely unilaterally in 2010. The description of the injuries provided by the claimant in 2010 and as communicated to them was wholly consistent with this being properly assessed as currently a fast-track claim: a view shared, and communicated, by the claimant’s own solicitors. Thus I do not follow why the judge also said that Garwyns took a “calculated risk”. True theirs was a commercial decision – but it was a decision (reasonably) based on what was then adjudged to be a relatively modest claim, on the information which the claimant was herself providing at the time. Garwyns had no reason realistically to contemplate the amount of the claim being increased so dramatically as it subsequently was. The statement of Hatchers, the claimant’s solicitors, in their letter of 17 August 2012 that “our client’s claim has changed entirely in character and amount”, was not only fair: it was also accurate.

   5. A significant point that troubles me, on the judge’s approach, is this. This was, in 2010, being presented as (currently) a modest personal injury claim, suitable for the fast track. Changes in litigation procedures and in the applicable costs regime provided, in 2010 as now, every incentive on grounds of proportionality for parties – and particularly, perhaps, defendants and their insurers – speedily to settle such claims. The Personal Injury Protocol was designed to facilitate that. The judge’s stark approach – that a risk of increase in quantum is inherent in any such claim – would in my view tend to discourage speedy admission of liability in (then) small claims; admissions made having regard to considerations of saving costs and of proportionality. It would tend to discourage them for fear of a subsequent withdrawal of admission of liability being refused on the basis advocated by the judge, even where quantum has in the interim enormously and unexpectedly increased. This is precisely one of the points validly made by Judge Purle QC, sitting as a Judge of the High Court, in his decision (in a case on facts to some extent analogous with the present case) in Blake v Croasdale [2017] EWHC 1336 (QB) at paragraph 28 of his judgment: a point which I would wholly endorse.

   6. Moreover, whilst I can accept that the MHRA report was not new evidence on liability, in the sense that the report existed at the time and Garwyns failed (as found) with due diligence to ask for it or consider it, the fact is – albeit due to their own oversight – they did not see it. As the judge herself in terms found, they would not have admitted liability had they seen it. This factor, too, makes the finding of a “calculated” risk being taken difficult to sustain. I appreciate this point relates to liability rather than quantum. Nevertheless, the decision was made in error, albeit self-induced error, in this particular respect also.

   7. At all events, in my opinion, the failure of the judge to have any real regard to this new evidence as to injury, causation and quantum, or to give any weight to it, of itself vitiates the exercise of her discretion. That of itself would entitle this court to interfere. But there is in any case more.

   8. For one thing – although it may not of itself be a very material point – I find it difficult to accept the judge’s conclusion that Days was to blame for the delay between the date of the admission in 2010 and the first intimation in 2012 that it would be withdrawn. I do not accept this, just because Days had no real reason to re-evaluate the case or admission until it was presented in 2011/2012 with the new case that the claim was now going to be for a far greater figure for far more extensive injury.

      1. A further and more major point, however, which, in my view, also vitiates the exercise of the judge’s overall discretion is this. In paragraph 77 of her judgment, the judge perhaps seems to have indicated that the overall exercise was to balance the interests of “finality” on the one hand against the interests of a “fair outcome” on the other hand. If that was indeed the test she set herself, then I agree with Mr Ferris that she posed the wrong test. Rather, the Rule and Practice Direction require a global approach, requiring evaluation of all the relevant circumstances in deciding whether it is just and fair to permit a party to withdraw a pre-action admission. That said, I doubt if the judge was in reality intending to pose such a test as Mr Ferris suggested she had. But what is clear, and I agree with Mr Ferris on this, is that the judge clearly was very concerned to seek to uphold the finality – and thereby certainty – of the pre-action admission.

   9. On that basis, these questions then arise in this particular case. Why should such a consideration of finality and certainty be of such significance as the judge seems to have accorded it as against Days when the claimant, by virtue of the judge’s own decision on the summary judgment claim, by now had the certainty of a final judgment against D2 – a defendant assuredly good for the money? What real prejudice would the claimant suffer if Days’ admission of liability were withdrawn when she in any event had a judgment on liability against D2?

   10. The judge clearly had appreciated the possible implications of the summary judgment against D2: because she discusses it at paragraph 79 of her judgment. She was undoubtedly correct that the judgment against D2 would not extinguish in law the liability of Days. But that does not meet the point that there was now no obvious reason to hold Days to ist pre-action admission on grounds of finality and certainty, in circumstances where the claimant had an assured judgment against D2. There was no obvious need for the claimant to continue her claims (contrary to what is stated in paragraph 68 of the judgment). Put another way, this was at the least a relevant matter required to be taken into account. Yet the judge wholly discounted it.

   11. Mr Bright objected that the summary judgment against D2 might not be assured: there might be a successful appeal, he said. There are, in my view, however, quite a few answers to that.

(1) The judge never herself advanced that as a reason for discounting the summary judgment against D2.

(2) The judge having granted summary judgment, she should in any event have acted on that basis: she could not, as it were, second-guess her own decision in this context.

(3) All parties had agreed to a procedure whereby these applications came on for hearing at the same time.

(4) If the judge had indeed relied on the summary judgment and it was then reversed on appeal, there was the prospect of seeking to appeal out of time.

(5) Finally, as it happens, the appeal against the summary judgment has in any event been rejected.

1. 1. Mr Bright more or less accepted, when the point was put to him in argument, that, given the judgment against D2, further pursuit of the proceedings against Days would serve no real purpose for the claimant. He suggested, nevertheless, there might still be costs issues. He also suggested that there may still be issues of contributory negligence relevant to liability: a point I found difficult to follow, at all events so far as D2 is concerned, given that (as Mr Ferris pointed out) the judgment against D2 is in contract and given also that D2 had not in any event pleaded contributory negligence. As to Mr Bright’s references to the contribution proceedings, I found it hard to identify how those could meaningfully impact on the claimant’s position on the issue of withdrawal by Days of the pre-action admission. But be all that as it may, it remains the case that the summary judgment against D2, on the very approach the judge had set herself, was a matter which, in my opinion, was required to be taken into account. But it was not.

Conclusion

1. In my opinion, therefore, the very well presented submissions of Mr Ferris are well-founded. My own view is that the entire “change in character and amount” of the claimant’s claim in 2012 (to adopt the language of her own solicitors) should, given all the circumstances, have justified the grant of permission to withdraw the pre-action admission. That conclusion is then reinforced when one has due regard to the existence of the summary judgment against D2. In such circumstances, this court is entitled to interfere and should do so.

2. I would add that, endeavouring to adopt an overall “stand back and consider” approach, I consider that a conclusion that permission should have been given to withdraw the pre-action admission is confirmed. Justice so requires, on the facts and circumstances of this particular case.

3. I would therefore allow the appeal, set aside the judge’s order in this respect and grant permission to withdraw the admission. The parties are to endeavour to agree a Minute of Order in consequence.

4. I would also add that I hope that hereafter all the parties can adopt a rather more speedy, pragmatic and proportionate approach to resolving all these various proceedings than thus far seems to be evident.