CIVIL PROCEDURE



Abuse of process - pre-action admissions - striking out - summary judgments - withdrawal - abuse of court process

Stoke on Trent City Council v John Walley: CA (Civ Div) (Lords Justice Brooke (Vice-President), Smith, Wall): 31 July 2006



The local authority appealed against a decision that it was bound by a pre-action admission of liability in respect of personal injury suffered by the respondent (W), and that summary judgment should be entered for W.



W claimed that he had injured his knee while working for the local authority as a refuse collector. The local authority referred the case to its loss adjusters, who investigated and then informed W that liability would not be in issue. The employee of the loss adjusters who made the admission was later dismissed as incompetent, W's claim was reviewed, and the local authority rescinded the admission of liability.



W issued proceedings, and the local authority filed a defence denying liability. W applied to strike out the defence under rule 3.4(2) of the Civil Procedure Rules (CPR) on the ground that it was an abuse of process or otherwise likely to obstruct the just disposal of the proceedings. The local authority cross-applied for permission to resile from its earlier admission of liability.



W's application was granted and judgment was entered against the local authority for damages to be assessed.



On appeal, the county court judge held that rule 14.1(5) allowed him a broad discretion to hold the local authority to its admission or to allow withdrawal, and that in the circumstances the local authority should be bound by its admission.



W submitted that the court had power under rule 3.4(2) to strike out the defence, or part of it, as an abuse of process or as being otherwise likely to obstruct the just disposal of the case.



The local authority submitted that it was entitled as of right to withdraw a pre-action admission, the status of which was evidential only; that in this case the facts were not such that summary judgment should be entered; that W could not show any abuse of process because bad faith was not suggested; and that withdrawal of the admission would not be likely to obstruct the just disposal of the proceedings because W would suffer no real prejudice if the admission were withdrawn, only disappointment.



Held, as the parties accepted, the judge's decision could not be upheld, because it had been based on the erroneous assumption that rule 14.1(5) provided a discretionary power that permitted judges either to hold a defendant to a pre-action admission or to allow him to withdraw it, Sowerby v Charlton (2005) EWCA Civ 1610, (2006) 1 WLR 568 applied. CPR part 14 applied only to admissions made in the course of proceedings, and a defendant who wished to withdraw a pre-action admission did not need the permission of the court to do so. The status of a pre-action admission was evidential only. The right to enter summary judgment would only apply if the facts were sufficiently clear; that was not necessarily so in every case in which a defendant made a pre-action admission.



The right approach where a pre-action admission was withdrawn would be for the claimant to apply to strike out the defence or part of it under rule 3.4. For a claimant to show that the withdrawal of an admission would amount to an abuse of the process of the court, it would usually be necessary to show that the defendant had acted in bad faith. That could not be said in this case. There was before the court a statement from the local authority, providing a full explanation as to why it had decided to withdraw the admission. The loss adjusters had not acted in bad faith, although one of the staff had made a bad decision about the authority's liability.



To show that the withdrawal of a pre-action admission was likely to obstruct the just disposal of the case, it would usually be necessary for the claimant to show that he would suffer some prejudice that would affect the fairness of the trial. There was no evidence of such prejudice in this case. Any effect on the funding of the withdrawal of the admission would be unlikely to obstruct the fair disposal of the case. The case was remitted to the county court for case management with a view to arranging a hearing.



Appeal allowed.



Neil Block QC, David Eccles (instructed by Grindleys) for the appellant; Andrew Hogarth QC, Anthony Johnston (instructed by Beswicks) for the respondent.