Stoke On Trent City Council v Walley

A defendant may withdraw a pre-action admission without the court’s permission because Civil Procedure Rules 1998 Part 14 applies only to admissions made during proceedings. The admission remains evidence and may support summary judgment where the facts justify that result.

A claimant may seek to strike out a defence under rule 3.4(2). Withdrawal will usually constitute an abuse of process only where the defendant acted in bad faith. It will usually obstruct the just disposal of the proceedings only where reliance on the admission caused prejudice affecting the fairness of the trial. Lost evidence or a proved detrimental change in funding arrangements may suffice. Disappointment, uncertainty or distress alone cannot do so.

The claimant was injured while working as a refuse collector for the defendant council. The council’s loss adjuster admitted liability before proceedings began but withdrew the admission after reviewing the employee’s work. The claimant commenced proceedings, and the council denied liability and alleged contributory negligence.

A deputy district judge struck out the principal part of the defence and entered judgment for damages to be assessed. His Honour Judge Rubery dismissed the council’s appeal. Both judges treated rule 14.1(5) of the Civil Procedure Rules 1998 as conferring a discretion to permit or refuse withdrawal of a pre-action admission.

After Sowerby v Charlton [2006] 1 WLR 568 established that Part 14 did not apply to pre-action admissions, the council appealed. The central issue became whether withdrawal justified striking out the defence under rule 3.4(2) as an abuse of process or conduct likely to obstruct the just disposal of the proceedings.

1. Appeal allowed. The circuit judge’s decision rested on the erroneous assumption that rule 14.1(5) of the Civil Procedure Rules 1998 empowered the court to hold a defendant to a pre-action admission. Sowerby v Charlton [2006] 1 WLR 568 established that Part 14 applies only to admissions made during proceedings. A defendant therefore requires no permission to withdraw a pre-action admission. The admission retains evidential value and may support interlocutory relief or be used at trial.

2. The proper means of challenging a defence which withdraws a pre-action admission is an application under rule 3.4(2). For withdrawal to amount to an abuse of process, it will usually be necessary to show bad faith. The council had explained that the admission was withdrawn after its loss adjusters concluded that the authorised employee who made it was incompetent and had made a seriously mistaken decision. Poor management did not establish bad faith.

3. Withdrawal will usually be likely to obstruct the just disposal of the proceedings only where it causes prejudice affecting the fairness of the trial. Such prejudice may arise where evidence has been destroyed, an expert inspection has become impossible, witnesses have died or disappeared, or a claimant has changed position in reliance on the admission. Funding difficulties may qualify where supported by evidence of detrimental reliance.

4. No evidence, documents or witnesses had been lost. There was also no evidence that the claimant had changed his funding position in reliance on the admission. Although after-the-event insurance obtained following a pleaded denial might be more expensive, its availability without an advance premium meant that the possible additional cost would not obstruct a fair disposal. Disappointment, uncertainty, turmoil or distress caused by withdrawal could not by themselves obstruct the just disposal of the case.

5. Smith LJ accordingly directed that the matter be remitted to the county court for prompt case management and a trial of liability. Wall and Brooke LJJ agreed. Brooke LJ additionally observed that giving protocol admissions greater effect would further the overriding objective and invited early consideration by the Civil Justice Council.

1. Court of Appeal (Civil Division): Allowed the council’s appeal and remitted the claim to the county court for case management and a hearing on liability: [2006] EWCA Civ 1137.
2. Stoke-on-Trent County Court, circuit judge: His Honour Judge Rubery dismissed the council’s appeal, holding that rule 14.1(5) of the Civil Procedure Rules 1998 conferred a broad discretion and that the council should remain bound by its admission.
3. Stoke-on-Trent County Court, deputy district judge: Deputy District Judge Evans struck out the principal part of the defence and entered judgment for the claimant, with damages to be assessed.