The Scottish Compulsory Pre-Action Protocol — Binding admissions
In Jacqueline Smith v Sarah Galbraith & Anr, the claimant sought damages arising from a road traffic accident which occurred on 27 December 2016.
When an insurer makes an unequivocal binding admission of liability under the Scottish Compulsory Pre-Action Protocol (CPAP), does this preclude a claimant from convening another joint wrongdoer in an action for damages?
In a recent unreported decision, a Sheriff has clarified that the terms of such an admission of liability can only be binding on the parties of the agreement and the admission does not affect any rights of relief or other issues relating to a third party.
In Jacqueline Smith v Sarah Galbraith & Anr, the claimant sought damages arising from a road traffic accident that occurred on 27 December 2016.
The claimant was a passenger in a vehicle that was alleged to have been involved in a double shunt type collision. It was alleged that the vehicle the claimant was travelling in was struck in the rear by a vehicle (vehicle 1). Following that collision, another vehicle (vehicle 2) collided with the rear of vehicle 1, pushing vehicle 1 into the claimant’s vehicle for a second time.
The claimant initially intimated a claim to the insurers of vehicle 2 under the CPAP. In a letter responding to the claim, the insurers of vehicle 2 confirmed that “liability in respect of this incident is admitted and we intend to be bound by this admission”. The claim did not resolve extra-judicially and the claimant raised proceedings against the driver of vehicle 2.
Upon lodging defences, the driver of vehicle 2 made reference to the involvement of vehicle 1 and the claimant then took steps to convene the driver of vehicle 1 into the action as a second defender.
The second defender subsequently lodged a motion with the Court, opposed by the other parties, maintaining that the terms of the binding admission made by the insurers of vehicle 2 meant that they were entitled to be dismissed from the action.
It was argued that the binding admission created either a unilateral voluntary obligation or a binding bilateral obligation on the insurers of vehicle 2 and this prevented the claimant from bringing proceedings against the second defender.
The claimant and first defender argued that the binding admission of liability did not create any binding legal obligation insofar as it concerned the second defender and that the claimant was not precluded from raising proceedings against both drivers.
The question for the Sheriff was whether, as a matter of law, the binding admission made within the scope of the CPAP precludes the claimant from raising proceedings against another party as a defender in the action where settlement has not been achieved.
Having reviewed the terms of the legislation, and authorities on binding pre-litigation admissions, the Sheriff found that there is nothing in the CPAP or elsewhere in the Ordinary Cause rules to provide that a binding admission of liability under the CPAP has any effect on the rights and obligations of any other party.
On that basis, the Sheriff held that the effect of the unequivocal binding admission of liability made under the CPAP in the present action could only be considered binding between the claimant and first defender. The Sheriff, therefore, refused the second defender’s motion to dismiss the action against them.
This is an interesting decision that clarifies the extent of a binding admission of liability under the CPAP for insurers. An admission of the sort made in this case will bind only the parties privy to the agreement. Such an admission will not, however, prevent the claimant or defender who makes the admission from seeking a right of relief or other remedy against a third party.
For any further information regarding any aspect of the issues raised in this case, please contact; Pamela Stevenson, Partner on 0141 375 0867 or email email@example.com or Callum MacKinnon, Solicitor on 0141 375 0861 or email firstname.lastname@example.org