Response by Thompsons Solicitors - October 2006
Thompsons is the UK’s most experienced trade union and personal injury law firm. It has a network of offices across the UK, including the separate jurisdictions of Scotland and Northern Ireland.
Thompsons only acts for trade union members and the victims of injury, never for employers or insurance companies. At any one time the firm will be running 70,000 claims.
The firm participates regularly in government consultations on legislative issues. It has also responded to the HMCS consultation Part 36: offers to settle and payments into court and considers that these two consultations should be considered alongside each other.
This is because there are clear consequences for the way in which defendants treat and make pre and post action admissions arising out of any decision to remove a requirement to make payments into court.
1. Should pre action admissions be given some weight by the civil procedure rules?
a) Should a defendant require the permission of the court to withdraw an admission made before the action proper was commenced?
We do not believe that a defendant should be allowed to withdraw an offer at any point, except where fraud can be proved.
Defendants are currently making applications to court to withdraw admissions and these are being granted. This makes a mockery of the intention of the Civil Procedure Rules (CPR) to speed up cases and not bog the courts down dealing with unnecessary and unjustifiable applications.
When a defendant insurer admits liability, the claimant solicitor will often stop investigating the claim, which prevents further costs being incurred. This is as intended by the CPR. Claimant solicitors are constantly criticised by defendants for ramping up costs. But our duty is to ensure that costs are reasonable, necessary and proportionate and this is why investigations will be stopped on an admission of liability.
If the defendant changes their mind and withdraws an admission, investigations have to re-start and evidence may have gone cold. Much extra work tracing witnesses and employing experts may need to be done. It can be of little surprise to the defendants if claimant costs then become disproportionate.
We attach an Appendix to this response with real examples of the issues and difficulties presented when defendants resile from admissions.
b) Should a claimant be able to apply for judgment on the basis of a pre-action admission which was withdrawn before the action was commenced?
A claimant should be able to rely on pre-action admissions whether this is withdrawn pre or post action. If a defendant has properly investigated liability and following those investigations makes an admission of liability then they should be bound by that admission. A claimant should have the certainty of knowing that where an admission is made they can stop liability investigations.
Enabling a client to apply for judgment on the basis of a pre or post-action admission will mean that liability investigations can be stopped without risk of them having to be restarted, thus saving considerable time and costs.
See our comments above on the implications of stopping investigations.
c) It could be generally assumed that continued investigation of an admitted point by the claimant following admission on that point will carry adverse cost consequences, to be ordered under the courts general powers at 44.3. Should a specific costs exclusion also be created?
Where a defendant is bound by an admission of liability then there should be no need for a claimant to continue investigating the admitted point. There is therefore no need for any adverse cost consequences save that the claimant cannot recover the costs of further investigations on an admitted point. The current rule under CPR 44.3 is sufficient to deal with this point and no further cost exclusion is required.
2. What constitutes an admission?
a) How strictly should a revised rule circumscribe the form of admission?
To avoid vague admissions it would be appropriate that a revised rule should require that admissions be stated to be Part 14 admissions on liability and should make it clear what issues are admitted and what remain in dispute. This would ensure it is understood that a car driver who at the scene of an accident admits that it was their fault, is not making a binding admission and that investigations into liability should take place.
This would also ensure that a claimant only continues to investigate liability on the issues that remain in dispute, if any, and that defendants have properly considered the issues and carried out their own investigations properly, so that mistakes are not made.
b) Should such a written admission only be applicable if made after receipt of a pre-action letter?
It is not appropriate that written admissions should only be applicable if made after receipt of a pre-action letter as it is not uncommon for claimants to attempt to settle a claim with defendants directly and to receive an admission, but to instruct solicitors where quantum cannot be agreed.
In such cases, where claimants try to settle a claim themselves, liability is often admitted. It would be unfair if a defendant was then able to withdraw the admission once solicitors are instructed. This would also lead to further, unnecessary costs as a solicitor would have to investigate liability afresh.
We suggest that defendants are required to express written admissions as Part 14 admissions. This technical requirement would prevent accidental admissions by the parties to the accident, as with the scene of accident scenario above.
3. Should a test for withdrawal be introduced?
We do not accept that there should be a test for withdrawal in most circumstances. It would be too easy for a defendant to resile from an admission after a test. The only circumstance where a defendant should be entitled to make an application for withdrawal should be where fraud is proven.
A definition of what amounts to fraud needs to be agreed to avoid the defendants relying on minor discrepancies between sums claimed and evidence in support.
4. Specific Defence Situations
a) What should be the consequences of a defence of limitation after an admission being made?
If a claim is investigated properly the defendant will also have investigated limitation. The defendant should not be able to withdraw an admission where they have failed to carry out due diligence in their work. A claimant is not entitled to re open investigations where a claim is settled in error. In such circumstances the solicitor would be negligent.
The defence mindset is to avoid liability. Their investigations will include looking for ways to avoid paying out, so the idea that they will overlook limitation is unrealistic. And if, unbelievably, they have overlooked it, then the only consequence should be for them – they must stick to their admission and take on board the lessons of not properly investigating claims.
b) What should be the consequences if a new defence is exposed?
If a claim is investigated properly then all possible defences should be investigated before an admission is made. There can be no excuse for the defendant who fails to properly investigate.
A claimant’s representative cannot make new allegations, and would be negligent if they had failed to spot a key allegation.
So if a defence is later exposed then the defendant’s representative should also be considered negligent. They cannot withdraw an admission because of their failure.
If there is a change in law which exposes a new defence then a defendant should still be bound by an admission already made.
c) What should be the consequences of a defence which only becomes apparent after an admission had been made (e.g. new evidence)?
Where a claimant compromises a claim, ie on a 50/50% basis, they are then not able to withdraw from that compromise where new evidence comes to light to suggest that they could do better than the compromise. Investigations should be carried out by the defendant insurer before admitting liability and so they cannot resile from that admission or seek to renegotiate the compromise if new evidence does subsequently come to light.
If the new evidence was obtainable prior to the compromise the claimant’s representative would be considered to be negligent for failing to investigate it. A defendant should face the same sanction.