Withdrawing admissions – Wood v Days Healthcare UK Limited  EWCA Civ 2097
The Court of Appeal has considered the position where a defendant (D1), presented with a claim that is said to be of low value, admits liability but is later confronted with a significant increase in the value of the claim.
The claimant initially indicated that her claim was a fast track claim (then limited to £25,000) and D1 admitted liability. Some time later the claimant’s solicitors indicated that the claim had increased significantly in value and, when proceedings were commenced, a claim in excess of £300,000 was pleaded. At that stage D1 reviewed its admission and, upon discovering material that would give it a defence (which had been available at the time of the initial admission), sought to resile from the admission.
In a hearing before Laing J the claimant resisted D1’s application. At the same hearing the claimant also sought summary judgment against a different defendant (D2). Laing J refused D1’s application for permission to withdraw the admission holding that the increase in value was not a good reason to allow D1 to do so. At the same time Laing J granted the claimant’s application for summary judgment against D2 but held that the fact that judgment had been entered against D2 was not relevant to the issues involved in D1’s application to resile from its admission. In rejecting D1’s application Laing J indicated that she had balanced the prejudice caused to D1 in shutting it out from an arguable defence against the interests of justice and, in particular, finality.
The Court of Appeal (Davis, Sharp and Richards LJJ) allowed D1’s appeal, holding that the Judge was wrong to disregard the significant increase in the potential value of the claim and to disregard the fact that judgment had been entered against D2 so that, in effect, the claimant would suffer little or no prejudice if D1 was allowed to withdraw the admission.
Davis LJ held as follows:
That the change in value of the claim was “new evidence“.
D1 had not taken a “calculated risk” (as found by Laing J) that the claim might increase in value to the extent that it had increased.
There was an incentive for parties speedily to settle fast track claims and it would discourage such an approach if a substantial increase in value was not a reason to withdraw an earlier admission – “It would tend to discourage them for fear of a subsequent withdrawal of admission of liability being refused”.
The fact that summary judgment had been entered against D2 was a relevant factor to be taken into account and the judge’s failure to do so vitiated her decision.
“The entire “change in character and amount” of the claimant’s claim in 2012 (to adopt the language of her own solicitors) should, given all the circumstances, have justified the grant of permission to withdraw the pre-action admission. That conclusion is then reinforced when one has due regard to the existence of the summary judgment against D2. In such circumstances, this court is entitled to interfere and should do so.”
Shaun Ferris (instructed by John A Neil Solicitors) represented the Appellant First Defendant.
To view the full judgment, please click here.