DEFENDANT GIVEN PERMISSION TO WITHDRAW FROM ADMISSION MADE IN THE PORTAL: ON CONDITION THAT INTERIM PAYMENTS WOULD NOT BE REPAID

I am grateful to  solicitor Stratos Gatzouris from DWF law   for sending me a copy of the judgment of HHJ Catherine Brown in the case of Jerrom -v- Serco Leisure Operating Ltd (Canterbury County Court 12th February 2023). It is an example of the courts permitting a defendant’s application to withdraw from an admission of liability made when a personal injury case was in the portal. One of the major factors was the increased value of the case which had grown from less that £10,000 to £500,000. Permission to withdraw the admission, however, was conditional upon the defendant not being able to claim back interim payments that had been made prior to the withdrawal. A copy of the judgment is available here 039LR464JerromvSercoJudgmentFINALpdf-V1

“Where a case has risen in value and complexity in the way that this case has, particularly when I take into account the additional factors relating to the Claimant’s credibility, and even though the claims handlers could have appreciated earlier that this was a case in which the admission should be withdrawn if possible, I have no doubt that, taking into account all of the factors in 14PD7.2 and the overriding objective, I should grant permission for the Defendant in this case to withdraw the admission of liability.”

THE CASE

The claimant’s case is that she was injured in an accident in a changing room at a swimming pool. A CNF was filed on her behalf. Liability was admitted on the defendant’s behalf whilst the case was in the portal.  Medical reports were obtained and the case remained in the portal. The claimant’s solicitors initial valuation of the case was within £10,000.   The medical reports showed significant ongoing symptoms.

THE CASE REMAINING IN THE PORTAL

29.In my judgment, even though the claim was not (wrongly) taken out of the Portal
by the Claimant’s solicitors at any stage prior to the issue of proceedings, it
was, or should have been, quite plain to the Defendant’s claims handlers by the
end of 2020, when the second interim payment was made, that this was a claim
that had clearly had the potential to be significantly in excess of the original
£10,000 limit and, further, a claim which had a complexity to it because of the
pathology found on MRI, the overlap between the physical and psychological
aspects of the case, and the impact on the Claimant’s everyday activities.

31.In my judgment, once the Defendant had sight of these additional reports, there
can have been no doubt about the complexity and potential value of this claim
had the Defendant’s claims handlers given the case any proper consideration.
It is right that the Claimant’s solicitors did not withdraw the case from the Portal
as they should have done, but it would have been (or should have been)
obvious to the claims handlers that the claim was not a low value PL case even
though, at the outset when the admission was made by the Defendant, it was
appropriately assessed as such by the claims handlers based on the
information available in the CNF.

THE RISING VALUE OF THE CLAIM

Proceedings were issued which put the value of the claim between £50,000 and £75,000.  The claim was the amended to claim up to £500,000. The Schedule of Damages put the claim for special damages in excess of £444,000.

THE DEFENCE AND AN APPLICATION TO WITHDRAW THE ADMISSION

The defendant filed a Defence together with an application to withdraw the admission. The claimant made an application to strike out the defendant’s application.

DELAY IN THE COURT SYSTEM

.As I have already noted, the Defendant’s application to withdraw its pre-action
admission of liability was issued on 22 March 2022. For reasons that are not
clear from the court file, but are likely to be related, at least in part, to the impact
of Covid 19 upon the civil courts, but also to the particular issues in the County
Courts in Kent, not least, until very recently, the lack of salaried district judges,
the application was not listed until 23 May 2023. In fact that hearing does not
appear to have gone ahead, again for reasons that are not clear, and it was
relisted on 19 October 2023.
46.However, on that occasion Deputy District Judge Van Der Wal considered
(understandably) that the one hour time estimate for the hearing was
inadequate. He also considered that, given the pleaded value of the claim, the
application should be heard by a Circuit Judge. He gave directions and the
application was thereafter listed before me on 29 January 2024.
47.The Claimant had issued an application to strike out the Defendant’s
application. However, on 19 October 2023 it was confirmed that the Claimant
did not pursue that application and the order of DDJ Van Der Wal dismissed
that application dated 12 April 2022.

CONSIDERATION OF THE APPLICATION TO WITHDRAW THE ADMISSION

The judge considered the rules and case law relating to withdrawal of admissions in considerable detail.  She then considered the 14PD7.2  criteria in detail, applying each limb of the guidance to the the specific case.

Analysis
(a) the grounds upon which the applicant seeks to withdraw the
admission including whether or not new evidence has come to light which
was not available at the time the admission was made
70.The Defendant’s application is supported by a statement from Mr Gatzouris, a
consultant solicitor employed by the solicitors for the Defendant. He relies upon
the fact that the claim was issued in the Portal with a value up to £10,000 and
he states that at the time of the admission there was limited information
available to the claims handler. An admission was made within the 40 day limit
so that the case remained in the Portal for low value claims. However, since
the time when the admission was made, the value of the claim has increased
substantially on the basis of evidence that was not available to the claims
handlers.
71.Mr Gatzouris states that the investigations undertaken on behalf of the
Defendant since the issue of proceedings have established that the Defendant
had a potential defence based on the footfall in the location, the system of
monitoring, cleaning and inspection, the appropriateness of the flooring
material, the cleaning product applied each night, the presence of a cleaner on
duty, the instructions to other members of staff and the appropriate signage in
place to warn of the possibility of a wet floor.
72.However, the Defence served does not particularise the matters that are set out
in Mr Gatzouris’ statement about system, the flooring etc. and no witness
statements or documentary evidence has been served in support of the
application.
73.Another ground relied upon by Mr Gatzouris is a suggestion that Miss Jerrom
“has provided varying versions of what happened at the time of the index

accident to such an extent that the Defendant questions the veracity of what
the Claimant had stated”.
74.This is presumably a reference, in particular, to the account apparently given
by Miss Jerrom to Dr Willows which is set out earlier in this judgment. However,
it is an account that was also given in the statement of the paralegal from the
Claimant’s solicitors, Eleanor Buckley, dated 12 April 2022 who said the
following at paragraph 4 (with the bucket of water allegation repeated at
paragraph 11(b) of the statement):
“The Claimant left the pool and began walking to the changing rooms to feed her baby son
whom she was carrying. AS she walked towards the changing rooms, she suddenly and
without warning slipped sustaining injury as a result. The Claimant will say that an employee
of the Defendant had thrown a large bucket of water and cleaning product on the floor but did
not adequately clean the floor or remove the liquid. There was no warning signs (sic) and
nobody in the vicinity to advise the Claimant of the heightened risk of falling.”
75.Further, paragraph 8 of the Defence alleges that Miss Jerrom had given a
misleading pre-accident history to the medical experts and Mr Jones, counsel
for the Defendant, relied upon that as being an additional factor that was
potentially relevant to the issue of liability, namely her reliability and veracity as
a historian and her credibility as a witness.
76.So far as the increase in value in the case is concerned, in addition to the
situation at the time of the admission being made, Mr Jones emphasised that
at no point had the Claimant’s solicitors withdrawn the case from the Portal or
notified the Defendant that they now considered the case to be a substantial
one. Even when the proceedings were issued, the original limit was £75,000,
although that was not something that was communicated to the Defendant at
that time. However, the suggestion by Mr Jones is that, if the Claimant’s
solicitors did not appreciate that the claim was worth several hundred thousand
pounds when they first issued the claim form, why should the Defendant?
77.On behalf of the Claimant Miss Livesey submits that it is not sufficient for a
Defendant to seek to withdraw an admission on purely economic grounds
notwithstanding what is said in Wood. She points out that an additional factor
in Wood in relation to the position of the claimant in that case was the fact that
the claimant had summary judgment against another defendant. Therefore the
claimant was sure to recover damages in contrast to this case.
78.Further, the Claimant relies upon the fact that, in reliance upon the admission,
the Claimant’s solicitors have instructed a large number of experts and the
Claimant has requested and received a number of interim payments.

79.In response to the latter point, Mr Jones points out that any permission to allow
the Defendant to withdraw the admission could be conditional upon the
Claimant not being required to repay the interim payments.

80.In my judgment there was no reason at the time that the admission of liability
was made for the Defendant or its claims handlers to appreciate that this was
a case that might be one of substantial value or complexity. Of course it is
always possible that any case may subsequently become a larger or more
costly claim. However, the limitation of the claim to £10,000 and the description
of the Claimant’s injuries in the CNF meant that it was properly regarded at that
time by the claims handlers as a low value claim that was suitable for the Portal.

81.As I have already found, over time, as further medical evidence was obtained
and then served, it was or should have been obvious to the claims handlers, if
proper consideration had been given, for example when a further interim
payment was requested in the second half of 2020, that the case was one that
was more complex and potentially of significantly greater value than had been
apparent at the outset. That was the position by late 2020 or certainly by early
2021.
82.However, there is no evidence that the claims handlers did in fact appreciate
that the nature of the case had changed significantly. It simply seems that the
claim was allowed to continue in the way that it had been, with the Claimant’s
solicitors continuing to gather expert evidence.

83.Although criticism can be made of the claims handlers for not having
appreciated that the value and complexity of the case had changed, equally the
Claimant’s solicitors can be criticised for not withdrawing the case from the
Portal.
84.In my judgment, given the very substantial increase in the value of the claim
since the admission was made, as in the case of Wood, there was material
evidence that was not available to the Defendant at the time the admission was
made on the issue of quantum.
85.Further, it is not surprising that no detailed investigation was undertaken by the
Defendant’s claims handlers before the admission of liability was made.
Although this was, on its face, a relatively straightforward occupiers’ liability
case that did not require a particularly extensive or difficult investigation, given
the timescales involved in the Portal process and considerations of
proportionality, it was a rational decision for the claims handlers to have made
not to investigate liability and, in my judgment, one which is consistent with the
approach that is now encouraged in civil litigation.

86.Further, in my judgment, the Defendant’s solicitor’s statement does provide
some indication that, investigations having now been undertaken, there is now
evidence available to the Defendant on the issue of liability that was not
available at the time of the admission. Although it is not backed by witness or
documentary evidence, and there are no particulars given in the Defence, I
accept that it is an additional factor that I should take into account.

87.Further, the matters touching on the Claimant’s credibility as a witness, both in
terms of her description of the accident circumstances, and in relation to
whether she has given an accurate history of her previous medical history, were
not matters that were known by the Defendant at the time of the admission.
However, it is also right to say that those matters, or at least the key points
about them, were or should have been apparent once the Defendant had been
served with further expert evidence in late 2020 or early 2021.

b) the conduct of the parties, including any conduct which led the party
making the admission to do so
88.In this case, in contrast to that of Wright, the Claimant’s solicitors did make a
positive representation that this was a low value case by limiting it to £10,000
and submitting it to the Portal. That was, no doubt, given the description of the
Claimant’s injuries at that time, appropriate.
89.More importantly, however, in my judgment, at no stage did the Claimant’s
solicitors withdraw the claim from the Portal or inform the Defendant, prior to
the issue and service of proceedings, that the claim was now considered by
those advising the Claimant to be a substantial one.
90.However, set against that is the fact that the Defendant had material available
to it from late 2020 or early 2021 which would, had it been properly assessed,
have alerted the Defendant to the likely value and complexity of the case, as
well as to the alleged credibility factors upon which reliance is now placed.
c) the prejudice that may be caused to any person if the admission is
withdrawn
91.In my judgment, although the Claimant may be theoretically prejudiced in
having to recall the circumstances of the accident, say, 6 years after the event
(assuming a trial in late 2024 at the earliest), there is no evidence before me of
specific prejudice to her, such as documents no longer being available or
potential witnesses not being contactable. Since it is agreed that the issue of
contributory negligence is one that the Defendant is entitled to pursue
regardless of the outcome of the application, the circumstances of her fall will
in any event have to be considered.

92.Further, although she has received interim payments, any prejudice in that
regard can be addressed by an order making any permission to withdraw the
admission conditional upon her being entitled to retain the interim payments
even if she fails on the issue of liability at trial.

93.Of more concern in this case is the fact that, because the Defendant did not
give notice of an intention to seek to withdraw the admission prior to the issue
of the proceedings, the Claimant’s solicitors continued to obtain further expert
evidence which they would say was in reliance upon the admission being made.
I bear in mind what was said by William Davis J. at paragraph [17] in Wright,
but that is not, in my judgment, a rule of law. Rather it is a factor to be taken
into account along with all of the other factors in 14PD7.2. Further, if the
Defendant’s conduct caused wasted costs to be incurred, then that would be a
matter that could be considered at the conclusion of the case.

94.In any event, I must consider what would have happened if the Defendant had
indicated that they were seeking to withdraw their admission in late 2020 or
early 2021. That might have resulted in the issue of proceedings earlier, before
further expert evidence was obtained by the claimant’s solicitors. However, in
my judgment, given that the issues of liability and quantum plainly overlap in
this case given the points raised by the Defendant concerning credibility and
the expert evidence served, if the Defendant had made a successful application
to withdraw the admission at that point, the further expert evidence on quantum
would still in all likelihood have been obtained by the Claimant’s solicitors. This
is not a case in which it could be said that there would have been an early trial
on liability so as to avoid the potential wasted costs of investigating quantum
further if the Claimant failed at the liability trial.

95.Miss Buckley, the Claimant’s solicitors’ paralegal, states at paragraph 12 of her
statement that to grant the application “will cause the Claimant further
significant unnecessary distress”. I have no doubt that, based on all of the
medical evidence that I have read, the Claimant will be distressed if the
Defendant is granted permission to withdraw its admission. In view of the
psychological factors apparently at play in this case, I would readily accept that
she may suffer considerable distress and that this may itself impact upon her
perception of pain and other symptoms. That is a factor that I take into account
when considering the exercise of my discretion.

(d) the prejudice that may be caused to any person if the application is
refused

96.The prejudice to the Defendant if the application is refused is potentially
substantial. If, as is contended, the Defendant has a good defence to the claim
based on the investigations that have now been undertaken, then to refuse the
Defendant permission to withdraw the admission would result in the Defendant
paying potentially substantial damages to which the Claimant, on that basis,
was not entitled.
97.I bear in mind that the value of the case has increased from less than £10,000
to, on the Claimant’s case, a figure up to £500,000, that valuation being echoed
in the Schedule of Loss served with the proceedings which, excluding general
damages, is pleaded at over £444,000. That is an even greater increase than
that in Wood in which the Court of Appeal considered that the magnitude of the
increase in value was a material factor in finding that the first defendant in that
case should be permitted to withdraw its admission.

e) the stage in the proceedings at which the application to withdraw is
made, in particular in relation to the date or period fixed for trial

98.I have effectively dealt with this factor under the conduct issues at b). The
application was made promptly after the issue of the proceedings in this case,
but an intention to make such an application could have been communicated
by the Defendant’s claims handlers much earlier. However, for the reasons that
I have already explained, I do not find that this would have made any material
change to the course of events save that proceedings may have been issued
somewhat earlier.

(f) the prospects of success (if the admission is withdrawn) of the claim
or part of the claim in relation to which the admission was made

99.This is not a factor on which I consider that I can make any firm findings. As I
have indicated, the Defendant has not produced any evidence beyond
assertion to support its case on primary liability. Further, I do not know what
Miss Jerrom will say in response to the credibility issues raised.

100. However, taking into account what is said by Mr Gatzouris, as well as
the apparent change in account of the accident circumstances by Miss Jerrom,
and the credibility issues identified, I cannot find that Miss Jerrom is bound to
succeed in establishing liability in this case if I permit the Defendant to withdraw
its admission.

(g) the interests of the administration of justice

101. I have already dealt with the issue of the Claimant’s solicitors continuing
to assemble quantum evidence even after the point at which, with hindsight, the
Defendant’s claims handlers could and should have appreciated that this was
now a complex case of potentially significant value. Ultimately I do not consider
that an earlier indication of the Defendant’s intention would have affected the
likely course of events so far as expert evidence is concerned.

102. Further, I consider that factor (g) requires me to have regard to the
considerations mentioned in Blake and in Wood, namely that insurers and
claims handlers should be encouraged to make early admissions and deal with
cases proportionately. If they are disincentivised from acting in that way, then
that will increase the cost and time for cases to be resolved and that is
something that impacts upon the civil justice system and upon individual policy
holders generally, because of the overall upwards pressure on premiums due
to increased costs and because of the adverse effect upon the efficiency with
which claims are dealt.

Conclusion

103. Where a case has risen in value and complexity in the way that this case
has, particularly when I take into account the additional factors relating to the
Claimant’s credibility, and even though the claims handlers could have
appreciated earlier that this was a case in which the admission should be
withdrawn if possible, I have no doubt that, taking into account all of the factors
in 14PD7.2 and the overriding objective, I should grant permission for the
Defendant in this case to withdraw the admission of liability.

104. Although it is important that claimants can in general rely upon
admissions on liability made by or on behalf of defendants, granting permission
in an exceptional case such as this does not affect that general position. In the
vast majority of cases where admissions are made, the cases will be settled or,
if they are not settled, they will be dealt with in accordance with the Pre-Action
Protocol and the Part 8 procedure if a claim has to be issued.

105. In reaching my decision I have taken into account the chance that the
Claimant’s prospects on the issue of liability have been adversely affected by
the passage of time, although no evidence of specific prejudice has been
adduced, but also the inevitable distress that she is likely to suffer as a
consequence of the issue of liability being reopened. However, I have come to
the conclusion that those factors are outweighed by the other matters to which
I have referred in this judgment.
106. I therefore grant permission to the Defendant to withdraw the admission
of liability made by the claims handlers on 9 April 2019. However, that
permission is conditional upon there being no order for the Claimant to repay
the interim payments pursuant to CPR 25.8(2) even if she fails to establish
liability in this case.