A High Court judge has ruled in a case involving a local authority that when it comes to whether or not to allow the withdrawal of pre-action admissions, judges should resist the temptation to conduct a mini-trial. Bronia Hartley analyses the ruling.
In Newham London Borough Council v Arboleda-Quiceno QBD (Lambert J) 31/07/2019 the defendant local authority appealed against a master’s refusal of permission to withdraw a pre-action admission made by its insurer.
The claimant had injured his knee in 2015 while playing football on an astroturf pitch in the local authority’s recreation grounds, which he alleged in his pre-action letter contained a hole. He referred to injuries including a fractured tibia, ongoing pain, and the need for an arthroscopy and further investigation. He stated that the value of the claim would be more than £50,000. The insurer admitted liability in subsequent pre-action correspondence.
In 2018 the defendant was presented with particulars of claim and a schedule of loss claiming nearly £3m due to chronic pain, unemployment, ongoing disability and the potential need for future surgery. The local authority applied to withdraw the admission. It denied liability and alleged that the claim was fundamentally dishonest. Specifically, the local authority alleged that the claimant had simply jumped and landed awkwardly, and that he had been on a different pitch than the one alleged.
Both parties had submitted witness statements from people who had been at the grounds on the day in question and the master considered the application on the papers, applying the CPR PD 14 para. 7.2 factors. In refusing the withdrawal, she relied in particular on prejudice to the claimant, the interests of the administration of justice, and the fact that while the local authority’s defence of fundamental dishonesty had a realistic prospect of success, the evidence supporting that defence was weak and contained inconsistencies. She also found that the claimant’s claim had not fundamentally changed since the pre-action letter; it was not different in size or character, despite the higher amount claimed.
The issues on appeal were the change in size and character of the case, the master’s treatment of the merits of the case and whether she was right to refuse the withdrawal.
As regards the change in size or character of case, it was held that the master had not been wrong to conclude that the claimant’s claim was not of a different size or character. The letter of claim recorded that further investigations were pending and it should have been clear that there was no confident prognosis at the time. The insurer could have contemplated that the claim might be substantial. Moreover, the claimant could not have anticipated four months post-accident (when the letter of claim was written) that there would be chronic pain or psychological symptoms.
In terms of the master’s treatment of merits, it was held that the master had erred in this regard. Having determined that the local authority’s defence of fundamental dishonesty had a realistic prospect of success, it was an error to go on to consider inconsistencies in the evidence and to determine that it was weak. While the merits of the claim were clearly a relevant factor, there was a limit on the type of examination that should take place at an interlocutory stage. While there could be cases where it was appropriate to look beyond the realistic prospect of success and to consider the evidence (such as where there was solely documentary or video evidence), the instant case was not one of those cases. The local authority’s evidence raised questions about the claimant’s case. Having found a realistic prospect of success for the defence, the master should have left it there. Instead, having disavowed the concept of a mini-trial, she had engaged in one, without considering all of the evidence and without being able to hear from witnesses.
The court determined that the decision had to be remade, focusing on the other two factors raised, namely prejudice to the claimant and the administration of justice. There was no specific evidence from the claimant that he would be prejudiced as a result of withdrawing the admission. He had a witness statement from a team member already, and he stated that his wife and others had been present. As for the administration of justice, the court considered that it would be an affront if the claimant was compensated where there was doubt over the reliability of his account (Woodland v Stopford  EWCA Civ 266 was considered). In the instant case, it was right to permit withdrawal.