A defendant was entitled to withdraw admission of liability in the face of a personal injury claim which rocketed in size from less than £25,000 to over £300,000, the Court of Appeal has ruled.
Lord Justice Davis warned that the trial judge’s “stark approach” to the issue, that the risk of an increase in quantum was inherent in any personal injury claim, would “discourage speedy admission to liability”.
Davis LJ said the case, involving injuries allegedly caused to a paraplegic by a malfunctioning wheelchair, was presented in 2010 as a “modest personal injury claim suitable for the fast-track”.
He said that even at this time the costs regime provided “every incentive on grounds of proportionality” for the defendants and insurers “speedily to settle such claims”, and the personal injury protocol was designed to facilitate this.
“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 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.”
Delivering judgment in Wood v Days Healthcare and others  EWCA Civ 2097, Davis LJ said loss adjusters acting for Days conceded liability to Susan Wood in 2010, but two years later solicitors for the company indicated that they were contemplating withdrawal.
The application to withdraw the admission was made in 2013, and refused by Mrs Justice Elisabeth Laing in 2016.
Applying the test set out in CPR 14(1A) on permission for withdrawal of admissions, Davis LJ said “highly material new evidence had come to light”, both on the alleged injury and quantum, which rose from less than £25,000 in 2010 to over £300,000 in 2012.
Lord Justice Davis said that while an increase of “a few thousand pounds” may be an acceptable and reasonable foreseeable risk, a tenfold increase to over £300,000, was “surely another thing altogether”.
He referred to a statement by Hatchers, the claimant’s solicitors, in August 2012, that their client’s claim had changed entirely in character and amount, describing it as “not only fair” but “also accurate”.
Davis LJ said the trial judge herself found that Days would not have admitted liability if the loss adjusters, Garwyns, had seen a key report at the time, making it difficult to describe the defendants as taking a ‘calculated’ risk.
“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.”
Davis said Laing J was “very concerned to seek to uphold the finality” of the admission, but the CPR required instead that a “global approach” should have been taken, “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”.
He allowed the appeal, set aside the judge’s order and granted permission for the admission to be withdrawn. Lady Justice Sharp and Lord Justice David Richards agreed.