Is an admission made by an insurer under the Portal binding on the parties in a future action? In September last year we looked at the case of Ullah -v- Jon where a district judge held that an admission was binding. Here we look at a decision of a district judge who held that it was not.
In Malak -v- Nasim* District Judge Lana Wood set aside an ex-parte order and held that an admission made under the portal was no binding on a claimant.
The defendant (in this action) submitted a Claim Notification Form under the Pre-Action Protocol to the claimant’s insurers. Those insurers admitted liability under the Protocol and paid damages in respect of personal injury and vehicle related expenses.
When the claimant made a claim under the Protocol the insurers stated that liability was denied and the system exited the portal.
Proceedings were issued and a defence filed which stated that the claimant was bound by the prior admission of liability. The action was struck out on a without notice application. The claimant applied to set aside that order and for an order allowing it to resile from the admission.
THE JUDGE’S FINDINGS
1. An admission made by an insurer under the Protocol is a true admission.
2 The admission is binding on the parties (not just the insurer) if it is not withdrawn.
3 The admission remained binding even after a case left the protocol.
4. However the admission made under the RTA Protocol is binding only in relation to claim within which it was made and is not an admission of liability in relation to a potential counter-claim.
5. The admission made by the insurers within the Portal was not binding on the claimant in the current proceedings.
- “In my judgment (again respectfully disagreeing with DJ Parker’s decision in Ullah v Jon), CPR14.1B governs any withdrawal of the admission made by the Claimant’s insurers in their Response to the CNF, and CPR14.1A is not applicable.
THE JUDGE’S REASONS
“I reach these conclusions for the following reasons:
- If CPR14.1A was applicable, there would have been no need to make provision for the withdrawal of offers made within the RTA Protocol when introducing that protocol. I think it unlikely that the Rules Committee intended there should be duplicate provision. I conclude therefore that the Rules Committee must have considered that CPR14.1A did not apply.
- Although, once the claim comes out of the portal, it proceeds under the pre-action protocol for personal injury claims, nevertheless I do not consider that this brings the claim within the types of claim to which CPR14.1A applies by virtue of PD14. 1B makes provision for withdrawal of admissions after proceedings have begun. This necessarily means that the claim would have left the portal. I accept the Claimant’s submission that the intention of the draftsmen of the rules must have been that the question of whether CPR14.1A applies or CPR14.1B applies depends on under which protocol the admission was made: if it was made under the RTA protocol, CPR 14.1B applies.
- In my judgment, the White Book commentary to PD8B relied upon by the Defendant does not support the Defendant’s submissions. The commentary relates to the situation where a claim has not settled at stage 2, but has proceeded to stage 3. The editors state that CPR14.1B applies if a party wishes to withdraw an admission made once the stage 3 proceedings are issued. In those circumstances the party wishing to withdraw the offer will be the defendant in the portal claim, and the defendant in the stage 3 proceedings.
- In my judgment the Defendant is not correct in contending that the personal injury protocol applies at the same time as the RTA protocol applies. This is not consistent with paragraph 6.17 of the RTA Protocol. My interpretation is supported by the editor’s notes in the White Book at page 2673, which suggest that a case is either within one or the other.
- In my judgment the construction of CPR 14.1B contended for by the Defendant is inconsistent with the language of that provision: in particular the suggestion that the word “defendant” could in context include a claimant in separate Part 7 proceedings stretches the possible meanings of that word, even in context, too far. I do not consider that the word “defendant” in CPR14.1B(3)(b) can be interpreted as including the claimant, even if he was the defendant in earlier portal proceedings. I do not therefore consider that CPR14.1B does permit the claimant in the separate proceedings to apply to withdraw the admission made within the portal.
- In my judgment a proper interpretation of CPR14.1B does not permit a claimant in the position of the current Claimant to apply to withdraw an admission made by his insurer in response to a claim by the defendant under the RTA protocol. There is therefore no provision which would entitle the Claimant to apply to withdraw the admission made by his insurers within the present proceedings. Whilst the claim was within the portal, it would have been the insurer, not the Claimant himself, who could have withdrawn the admission. Had the Defendant’s claim not been settled within the portal, and proceedings had been issued, within those proceedings the Claimant would (as defendant) have been entitled to apply to withdraw the admission.
- A potential claimant is not therefore able to apply to resile from an admission made on his behalf by his insurer in a previous portal claim brought by the person against whom he wishes to claim. It follows that the admission can only be binding in those proceedings. If the admission was binding in relation to a counter-claim arising out of the same accident, a potential claimant would be bound by an admission made by his insurer, over which he had no control, and which he is powerless to withdraw whilst the portal claim continues, and which he is unable to withdraw once the portal claim has been concluded. It cannot in my judgment have been the intention of the scheme that an admission of liability made by an insurer would prevent such a claim being brought.
- If the admission continues to be binding in relation to the claim in which it is made, unless withdrawn, then there is no question of the settlement being unravelled by a different decision on liability in the potential claimant’s claim.
I am supported in my conclusions by the following considerations.
- This construction of the rules works for all types of claims within the portal, without the need to interpret the rules differently depending upon whether the insurer has a contractual right to make admissions on the insured’s behalf, and avoids the potential considered by DJ Parker of satellite litigation between the insurer and the insured where an admission has been made on the insured’s behalf in circumstances where the insurer had been requested not to make such an admission because it might prejudice a personal injury claim the insured wished to bring.
- In my judgment the work-around suggested by counsel for the Defendant of attaching a note to the insurer response to the CNF, or writing separately stating that the admission was without prejudice to the insured’s personal injury claim are cumbersome and give rise to practical difficulties. Whilst the claim is within the portal, the insurer has control of it. The Claimant could not have forced his insurer, even had he wished to do so, to dispute liability, or, once liability had been accepted, to withdraw the admission.
- I accept the submission made on behalf of the Claimant, that the portal is intended to be a low-cost resolution forum, within which claims may be settled for commercial reasons, without a careful examination of their merits, and perhaps without the insurer having had the opportunity of discussing the claim with the insured before submitting a response.
- I do not accept the Defendant’s submission that the possibility of there being inconsistent decisions on liability in the claim in the portal and the claim brought by the Claimant is a good policy reason against reaching the conclusion I have reached. There is no judicial decision made within the portal scheme and therefore there will not be two inconsistent judicial decisions: the most that can be said is that the Claimant’s insurers decided to settle a claim brought by the Defendant in circumstances where, had liability been contested, they might have been successful in resisting that claim. The aim of the portal scheme is to provide a quick and cheap resolution, on the basis of a swift appraisal of the strengths of the case, without (in many instances) a full consideration of the merits. The possibility that a full examination of the facts might yield a different result does not detract from the desirability and utility of the scheme.
- It follows that I accept the Claimant’s submission that the reason there is no such provision is that the admission made by his insurer in response to the Defendant’s claim within the portal is not binding on him within the present proceedings, and that it was therefore not necessary for him to apply to withdraw it.
- 1B does not contain any provision (equivalent to CPR14.1A(4)(a)) which permits a party in the position of the current Defendant to apply for judgment on the admission. There is power to enter judgment under CPR 24 or CPR3.4. In the light of my finding that the admission is not binding on the Claimant as an admission within these proceedings, and in the light of the parties’ acceptance that it is not possible at this stage to predict the outcome of a trial on oral evidence on liability, this is not a case in which judgment should be entered under either provision.
RESOLUTION OF THE ISSUE
We now have (at least) two different decisions on the same issue. The District Judge gave permission to the parties to “leapfrog” the appeal to the Court of Appeal, however the Defendant (I am told) has elected not to. The issue, it appears, remains open to debate.
* Watford County Court 10th December 2014. I am grateful to Joseph O’Connell for sending me a copy of the judgment A copy of the judgment is attached to this post .m1591 judgement for claimant on set aside app (1)