The hinterland

I have never felt so popular, as I did some years ago when I had a road traffic accident. For weeks, months and years afterwards I was phoned by strangers solicitous for my welfare, and eager to assist me in getting compensation for the injury I had not suffered.

Any accident is likely to involve insured and uninsured losses, with all the potential that entails for multiple parties to get involved, and for parallel negotiations to take place. Issues often arise as to whether settlements or admissions made in one chain of communications, bind the position more generally.

In a recent case in the Central London County Court, an issue arose as to the status of an admission. The facts may be briefly summarised as follows. In the aftermath of an accident, the claimant had instructed solicitors to pursue a modest personal injury claim, and credit hire charges for a replacement vehicle.

In parallel, the insurers of the defendant had written to the claimant’s own insurer seeking recovery of their outlay, for the cost of repairs to the defendant’s vehicle. For reasons best known to themselves, the claimant’s insurers without the claimant’s instructions then admitted liability and paid for the damage to the defendant’s car.

When the claimant then came to issue proceedings, she was met with a defence which pleaded and relied on the admission. The defendant’s position was that accordingly her claimed was barred and should be struck out. Of course an admission is capable of being withdrawn but often the permission of the court is required. The court will typically apply the checklist contained in the Practice Direction to part 14 CPR, to determine whether permission should be given.

What was interesting about this case, was that closer analysis revealed that no such permission was required: the claimant was not bound by the admission, which was of evidential significance only.

The reason this was so, is to be found in two Court of Appeal cases which the District Judge accepted were binding upon her. The first of these is the case of Sowerby v Charlton [2006] 1 WLR 568 which established that the then part 14 CPR simply did not apply to admissions made pre-proceedings.

The further case of Walley v Stoke on Trent City Council [2007] 1 WLR 352 not only confirmed this position, but emphasised that such an admission was of evidential value only, and if resiled from by a defendant to proceedings, could possibly lead to an application for strike out of the defence for abuse of process or obstructing the just disposal of the case but a high hurdle would have to be surmounted to achieve that end.

Since those two seminal decisions, part 14 CPR has been amended with two rules which specifically impose a requirement that for a pre-commencement admission to be withdrawn either the other party must agree to it’s withdrawal, or the court must given permission.

But the two rules only apply in limited circumstances. Rule 14.1B applies where the admission is made by  a defendant in the context of a claim initiated under the  Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (‘the RTA Protocol’) or the Pre-action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims (‘the EL/PL Protocol’).

Rule 14.1A only applies where an admission is made by a party, after receipt of a letter before claim made under the personal injury, the clinical disputes or the disease and illness protocols or where in such a claim an admission is stated to be made under part 14. Thus rule 14.1A provides:

(2) Paragraphs (3) to (5) of this rule apply to a pre-action admission made in the types of proceedings listed at paragraph 1.1(2) of Practice Direction 14 if one of the following conditions is met –

(a) it is made after the party making it has received a letter before claim in accordance with the Practice Direction (Pre-Action Conduct) or any relevant pre-action protocol; or

(b) it is made before such letter before claim has been received, but it is stated to be made under Part 14.

Thus in the case noted above, rule 14.1B was irrelevant and rule 14.1A had no application as the defendant’s insurer was seeking recovery of property damage only and had not written a qualifying letter before claim, under one of three relevant protocols specified in paragraph 1.1(2) of the Practice Direction. The admission, accordingly fell into the hinterland established by Sowerby and to the defendant’s angst, was neither binding nor did the claimant need permission to resile from it and certainly there was no basis upon which the claim could be struck out.

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