The latest update to the Civil Procedure Rules (by way of the Civil Procedure (Amendment No. 3) Rules 2023 SI 2023/788) has introduced a revised Part 14. Our Legal Director, Chris Heitzman, discusses this further below.
The Courts have for some time sought to encourage parties to have a meaningful dialogue before commencing proceedings, with a view to avoiding the need for proceedings, or at least narrowing the issues therein. That was the idea behind the pre-action protocols and, for claims outside the scope of a specific protocol, the general protocol on pre-action conduct.
The lacuna in the law in this respect was that there was little to stop a Defendant from issuing a very short admission of liability in response to a letter of claim, only to then within proceedings resile from that and defend the claim on a potentially long list of issues. A Claimant in such circumstances might feel aggrieved and the Courts tended to be understandably frustrated that litigation was being conducted on issues not explored pre-action.
The new Part 14
The new Part 14 attempts to deal with such a problem. The new 14.1(2)(b) requires the maker of a pre-action admission to apply to the Court should that party wish to withdraw from the admission once proceedings are commenced. In deciding whether to give such permission, the Court will consider all the circumstances of the case, including specifically (CPR 14.5):
(a) the grounds for seeking to withdraw the admission;
(b) whether there is new evidence that was not available when the admission was made;
(c) the conduct of the parties;
(d) any prejudice to any person if the admission is withdrawn or not permitted to be withdrawn;
(e) what stage the proceedings have reached; in particular, whether a date or period has been fixed for the trial;
(f) the prospects of success of the claim or of the part of it to which the admission relates; and
(g) the interests of the administration of justice.
Furthermore, pre-action an admission may only be withdrawn with the agreement of the person to whom the admission was made (CPR 14.1(b)).
Post-issue, any party may apply to Court for judgment on a pre-action admission (CPR 14.1(2)(a)).
This is a significant tightening up of the process around pre-action admissions. A party who admits a claim or issues pre-action but then denies within proceedings is likely to need good reason to do so, and is unlikely to be simply allowed to change its mind because it wants to do so absent some relevant change in the circumstances or other good reason with regard to the criteria in CPR 14.5.
A pre-action admission can no longer be withdrawn at the whim of the maker even before litigation, unless the other party agrees, and they are unlikely to do so unless there is a good reason.
Claimants in receipt of a pre-action admission are likely to apply for Judgment on the admission within subsequent proceedings pursuant to CPR 14.1(2)(a) and there is scope for challenges to defences that purport to resile from pre-action admissions without having obtained permission to do so.
Defendants might be tempted in light of the foregoing to avoid making pre-action admissions, but there is potentially an even greater penalty down that route. Ignoring a letter of claim is a bad idea because a Court has the power to penalise a party who fails to engage with pre-action correspondence in accordance with the protocols on pre-action conduct. A Defendant could then be tempted to provide a letter of response but to ‘deny everything’. However, a party who denies when there is no real prospect of succeeding with such a defence may find themselves funding, ultimately, the costs on both sides of litigation on a wider range of issues than necessary, and putting the claim into a higher complexity band if it is below the multi-track. They may also be vulnerable to strike out and/or summary judgment on the whole or part of the claim if some or all of a defence is without reasonable prospects of success.
The need to engage meaningfully pre-action with a claim has never been more important. Astute advice and proper consideration of the issues prior to the commencement of proceedings has never been more important. Those who fail in one way or another will pay a heavy price in the litigation that follows.