02 September, 2014
In the recent Court of Appeal case of Pervez Akhtar v Jordan Boland (2014) CA (Civ Div) (Gloster LJ, Floyd LJ, Sir Stanley Burnton), the Court confirmed that if a sum is admitted and accepted in a defence, it will reduce the amount in dispute, and the reduced sum will therefore determine which track the claim ought to be allocated to.
The claim arose out of a road traffic accident. The value of the claim was pleaded to be worth £6392.80. A defence was served which admitted the accident and also admitted to pay the Claimant for any proven loss and damage. The defence stated that the matter should be allocated to the small claims track on the basis that after deduction of the admitted sums, the amount left in dispute totalled £3866.80.
However, the Claimant maintained that the matter should be allocated to the fast track based on the gross amount. The district judge agreed with the defendants and allocated the claim to the small claims track. The claimants applied for the track to be changed but this was refused and the district judge entered judgement for the amount admitted and costs up until the date of the service of the defence.
The matter was appealed to the Court of Appeal. It was the Claimant's principal contention that the defence did not include true admissions, but in reality offers.
The Court of Appeal set out the following guidance:
Once the court had determined that the defendant accepted that the claimant was entitled to judgment in the sum of £2,496, the only sum in dispute was the balance of the claim, which was less than £5,000. The Court concluded that the district judge was therefore was entitled to allocate the claim to the small claims track, since the sum remaining in dispute was less than £5,000. It was pointed out that if the case was too complex for the small claims track then the Court may allocate to the small claims track but that this was not such a case.
Consideration should always be given by insurers and defendants to admitting parts of a claim at an early stage, especially if the resulting consequence is allocation to the small claims track. Claimants will take all steps to avoid allocation of the claim to the small claims track. Where an admission is made, it should be clear and unambiguous to avoid future legal wrangling such as in this case.