In a recent article, Claire Jones looked at pre-action admissions in the light of Sowerby v Charlton (2005). The 44th update to the Civil Procedure Rules, which comes into force on 6 April 2007, formalises the law governing admissions in the changes that it makes to Part 14.

In Sowerby the Court of Appeal ruled that Defendants were only bound by pre-action admissions in fast track cases. Pre-action admissions in multi track cases were therefore rendered effectively worthless, although Claimants could still try to rely on contractual or estoppel arguments.

The new guidelines seek to dispel the confusion that has arisen from having different rules for different tracks, and for pre and post-action admissions. However initially, the changes will only affect claims under the Personal Injury, Clinical Disputes, and Diseases and Illnesses Pre-Action Protocols.

Rule 14.1.A contains a new definition - the “pre-action admission” (one which is made before commencement of proceedings). The admission must be made in writing, and be stated to be made under Part 14 (if made before a Letter of Claim is received) or in accordance with one of the Protocols (after receipt of a Letter of Claim).

If such an admission is made after 6 April 2007, it can be withdrawn before commencement of proceedings if the other party agrees, or after commencement by consent or with the Court’s permission. Once proceedings are issued, any party can apply for judgment on a pre-action admission.

This generates the obvious question of when the court will allow an admission to be withdrawn. The Sowerby decision referred to guidance in the unreported 2004 case of Braybrook v Basildon and Thurrock University NHS Trust. Paragraph 7 of the Practice Direction to the revamped Rule 14 requires the Court to follow similar criteria, with the overriding need to have regard to all the circumstances of the case and to the interests of justice. Points to consider also include the applicant’s grounds for withdrawing, the stage at which the application is made, any new evidence, the conduct of the parties, potential prejudice and the prospects of success of the claim itself.

The law governing post-action admissions is unaltered and the Court’s permission is required. Pre-action admissions made before 6 April 2007 will be subject to the old rules.

The impact of these changes remains to be seen. The potential pitfall for insurers is making an admission in a low-value case in order to minimise costs - only to see the value of the case escalate dramatically. Will the Courts allow an admission to be withdrawn here? There seems no reason why an insurer cannot elaborate on the reason for making a pre-action admission at the time it is made - in other words, to include in the admission letter a statement that liability is being conceded on economic grounds because of the low value of the claim. This comment can then be drawn to the Court’s attention should the value of the claim escalate, and an application to withdraw the admission be necessary.

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