Insurance And Reinsurance Weekly Update - 7 May 2013

Berg v Blackburn Rovers

Application to withdraw admission and new attitude of the courts post-Jackson reforms

http://www.bailii.org/ew/cases/EWHC/Ch/2013/1070.html

The defendant applied for permission to withdraw an admission (pursuant to CPR r14.1). Pelling QC HHJ noted the radical change to the Overriding Objective since 1 April 2013 - it now places emphasis not merely on the need to deal with cases justly but to do so at proportionate cost, expeditiously, to enforce compliance with the Rules and orders and to allot to each case an appropriate share of the Court's resources. The judge said that "this amendment of the overriding objective is likely to have a significant impact on the approach to be adopted to applications of this kind, which will now be approached by courts much more rigorously than perhaps has been the practice in the past, particularly where formal admissions are made on behalf of parties represented by experienced and specialist professional advisors".

The correct approach to this sort of application was to ask whether the defendant had demonstrated that, if permitted to withdraw its admission, it would have a "realistically arguable defence". Only if that is demonstrated will the court go on to consider the other factors listed in PD14 para 7.2.

In this case, neither of the defendant's asserted defences were realistically arguable and so the judge held that no useful purpose would be served by permitting the admission to be withdrawn. Accordingly, the application was dismissed.

Compton Beauchamp v Spence

Whether arbitrator's failure to provide reasons automatically amounts to "substantial prejudice"

http://www.bailii.org/ew/cases/EWHC/Ch/2013/1101.html

The claimant challenged an award under section 68 of the Arbitration Act 1996 on the ground of serious irregularity. One of the complaints was that the arbitrator allegedly failed to provide adequate reasons for the award (ie the case fell within section 68(2)(h): failure to comply with the requirements as to the form of the award). Section 68 requires any irregularity to cause "substantial injustice" to the applicant. In the case of Benaim v Davies Middleton [2005], Coulson J agreed with textbook commentary that "it is strongly arguable that unless a party knows the reasons for an award, there is automatically substantial injustice to him". However, in this case, Morgan J said that "I can accept that in many cases there will be substantial injustice where a party does not know the reasons for an award but I would not be prepared to hold that every failure of reasoning which amounts to an irregularity for the purposes of section 68(2)(h) will automatically give rise to substantial injustice". For example, if the arbitrator's reasoning is inadequate on a point of very little substance (even though it is relevant to the outcome), that might give rise to some injustice, but not "substantial injustice".

On the facts of the case...