Provisional damages offer is admission of liability, court rules
An offer of provisional damages carries an implied admission of liability, and it is not open to the defender then to reserve the right to proof on liability, a judge has ruled.
Lord Uist in the Court of Session gave his decision in an action by David Boyd against three companies raised after the pursuer developed asbestos related pleural plaques. The pursuer accepted an offer of £6,300 in provisional damages under s 12 of the Administration of Justice Act 1982, together with a right to apply for further damages if he developed diffuse pleural thickening, lung cancer or mesothelioma. The second defenders, Scottish Agricultural Industries Ltd, refused to accept the wording of the pursuer's draft joint minute as they wished to reserve the right to put the pursuer to proof on liability.
It was argued for these defenders that there was no requirement for a defender to admit liability when an action had settled extrajudicially by payment of provisional damages. The payment might be made for reasons of economy and to avoid the expense of putting a pursuer to proof on liability. Section 12 did not require such an admission. It was desirable to encourage extrajudicial settlements and a contrary ruling would be likely to deter potential settlements.
Rejecting these argument, Lord Uist said it was "clear to me that the whole scheme of s 12 proceeds on the basis that in the particular case liability is no longer in issue". It would be strange, he added, if, the court having made an award of damages against a defender and allowed the pursuer to apply to the court for a further award, it would be open to the defender nevertheless to contest the issue of liability when such an application was made. "In my opinion s 12... operates only once the issue of liability has been determined or agreed. An offer by a defender to make a payment of provisional damages therefore inherently carries with it an admission of liability", he continued.
It was therefore not open to the second defenders to refuse to sign the proposed joint minute for the reason which they gave.