Garden centre slip: an admission, a letter before action and a reserve
A garden centre café is busy during a storm. Rainwater leaks through a defective roof light and pools on the tiled floor. Staff place a bucket under the leak but do not put out a warning sign or close the aisle. A 68-year-old retired teacher slips, fractures her wrist and requires surgery. She claims £45,000 general damages, £8,000 loss of earnings, £2,000 care and £1,500 travel. The café has public liability cover with a £5m limit, a £500 excess and a condition that the insured must not admit liability. Six weeks after the incident, the manager emails the claimant's solicitor: 'We are very sorry; the roof has leaked for months and we should have closed the area.' The insurer receives notification the same day. The claimant's solicitor has issued a letter before action and says a claim will be issued if not settled within 14 days. The café is a family business and the manager is worried about publicity.
1. How should the claims handler respond to the manager's admission and to the letter before action? Explain the risks and the immediate steps.
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The admission. The email is evidence that the insured knew of a recurring leak and failed to close the area. It does not automatically create liability, but it weakens the defence and may be disclosable. The handler should not ignore it or ask the insured to retract it dishonestly. The insurer should reserve its rights under the no-admission condition, but it must show prejudice before declining cover; the admission may increase the risk and cost of the claim. A reservation letter should be sent to the insured.
The letter before action. Acknowledge it promptly and ask for an extension, normally 14 to 28 days, to investigate. Do not let the deadline pass. Instruct a solicitor or loss adjuster to take statements, inspect the roof light, obtain maintenance records and CCTV, and check the cleaning and inspection regime.
Immediate steps. Notify the insured not to discuss liability further, preserve evidence, and consider whether the claim can be settled within the excess or defended. The handler should explain to the insured that the insurer controls the defence subject to the policy, and that any admission outside the insurer's authority may prejudice cover. Keep the claimant informed to avoid a complaint about delay.
2. Assess liability and contributory negligence and set an indicative reserve.
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Liability. As occupier, the café owes a duty to visitors. It knew the roof light leaked, placed a bucket but gave no warning and did not close the aisle. That is a foreseeable risk of injury and a likely breach of duty. Causation is supported by the accident circumstances. The main defence is contributory negligence: the claimant may have failed to notice the water or the bucket. A reduction of 20-30% is realistic, not a complete defence.
Damages. General damages of £45,000 for a wrist fracture needing surgery may be high; the handler should obtain medical evidence and compare it with the Judicial College Guidelines. Loss of earnings is questionable for a retired teacher; she must prove actual loss of income or pension. Care and travel need receipts and justification.
Reserve. Gross claim £56,500. If liability is admitted at 75%, the damages reserve is about £42,400. Add claimant's costs, defence costs and an allowance for surgery or rehabilitation. A gross reserve of £60,000 to £75,000 is more realistic than the pleaded figure. The £500 excess applies to damages, not defence costs, unless the wording says otherwise. Review the reserve after medical evidence.
3. What evidence should be preserved and what instructions should be given to the insured about social media and contact with the claimant?
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Evidence. Preserve CCTV covering the aisle and entrance, the incident report, cleaning and maintenance logs, roof-light repair invoices, staff rotas and statements, and the bucket/warning-sign procedure. Photograph the area and the roof light before repairs. Obtain weather records for the storm and any previous leak reports. Identify witnesses among staff and customers.
Instructions. Tell the insured not to contact the claimant directly, not to offer further apologies or admissions, and not to post about the incident on social media. Ask them to forward all correspondence to the insurer or solicitor. Staff should be told to refer enquiries to the handler and not to discuss the claim with other customers.
Social media. The claimant's public posts may be relevant to the injury and losses, but surveillance or social-media checks must be proportionate and not harassment. The handler should instruct a solicitor before any monitoring. The insurer should also check whether the roof leak was a known defect that should have been notified as a risk improvement; if it was, that is a separate coverage issue.