In the case of Jeroen Van Klaveren v Servisair (UK) Limited (2008) CSOH 136, the Pursuer’s agents enrolled a motion for Summary Decree and sought to restrict the Proof to quantum alone on the basis that prior to the action being raised, there had been an exchange of correspondence between the Pursuer’s agents and the Defenders’ insurers in which the insurers had admitted liability.
In response to the Summons, the Defender’s agents, who were instructed by the insurers, lodged defences in which they sought to deny liability. The Defenders’ agents argued that the admission made in the correspondence was merely an extra judicial admission and did not constitute a binding contract. They also argued that the writer of the letter thought that she was operating under English law whereby she was entitled to withdraw an admission at will.
The case was heard before Lady Clark who concluded that when one considered the correspondence objectively, the only reasonable interpretation was that the parties had concluded an agreement whereby the insurers accepted that the Defenders were liable for the purposes of this claim. This was accepted by the Pursuer and negotiations continued on the basis that liability was not disputed up until the Defenders attempt to argue that liability had not been agreed once the action had been raised. Lady Clark also commented that it was open to the insurers to make it clear that any admission of liability was subject to English law and/or to refer to any protocol which they wished to rely upon, however they did not do so in this case. Ultimately, the motion for Summary Decree was granted and the Proof restricted to quantum alone.
It is worth noting that Lady Clark distinguished the case of Gordon v East Kilbride Development Corporation 1995 SLT 62 in which parties were writing to each other on a “without prejudice” basis. This ought to act as a reminder to insurers when making admissions of liability in pre-action correspondence that, if in any doubt, such admissions ought to be made on a “without prejudice” basis. This should avoid the situation which arose in Van Klaveren where they were bound untimately by the agreement made.
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Carly Forrest