Neil McLaughlin says that a defendant's admission of liability should not be binding
In discussions with claimants' representatives, the point is often advanced that a defendant should be bound by an admission, whether of breach of duty or full liability, come what may: a letter saying "we admit liability on behalf of our insured" should close the liability issue forever.
One can understand the point. A claimant wants to know if that crucial point is in issue; solicitors want to know what evidence they should gather; and the philosophy behind our procedural code is to identify and resolve issues promptly and proportionately. Indeed, in the vast majority of cases in which insurers make an admission they do so quickly, with a minimum of fuss and stick to it. To make it the rule however that every admission must be absolutely binding is a step too far.
First, is it really the case that there are hundreds, even thousands, of cases up and down the country in which an admission is made and then withdrawn? The Forum of Insurance Lawyers (Foil) undertook some (albeit limited and informal) research with member firms to try to identify case numbers. Members' feedback was generally of the "we don't see many" type. We may be wrong, but our view at this stage is that the issue is not a major one and should certainly not form an obstacle to completing procedural changes.
Second, an absolute rule that an admission is binding creates genuine prejudice to insurers in some situations: such as the case being presented as at a very modest level initially but at a large loss level down the line, or witnesses are found who were not available previously for entirely legitimate reasons but whose evidence changes the picture entirely.
Third, the Appeal Court looked at the issue in Sowerby v Charlton  and it would seem a strange move to now drive a coach and horses through their Lordships' reasoning. To make pre-issue admissions binding will in practice enable a claimant to apply for summary judgment on the admission alone, the very thing that their Lordships ruled against after very detailed argument on the point.
Last, and as happened in Sowerby, if a claimant's case is strong enough to justify summary judgment on the facts, the claimant has the option to apply for summary judgment. If the case is not so strong, it is surely unfair to the defendant to deny him the opportunity of a trial to determine liability if he so chooses. If the claimant has wasted costs because of the earlier pre-issue admission it is a simple matter to make an appropriate costs order.
Foil's position is that the problem of withdrawing admissions is overstated. The small number of cases in which breach of duty or full liability is admitted pre-issue, but not in the defendant's defence post-issue, does not justify introducing a blanket rule that all admissions are binding come what may.
The potential for defendants to be treated unfairly if that became the rule is too great. The rules and law as they stand provide a fair balance between the rights of the parties in this area. In practice, parties could become reluctant to make an admission if there is no prospect of re-visiting the point if circumstances and evidence change.
' Neil McLaughlin is the president of the Forum of Insurance Lawyers (Foil)