WITHDRAWING PART 36 OFFER BY EMAIL
I deal with Part 36 on my Spring 2017 Personal Injury Reforms Course – click here for more information and to book – and in my new 3 volume book – Personal Injury Small Claims, Portals and Fixed Costs which can be purchased from Amazon here, or direct from me.
In Thompson v (1) Reeve (2) The Motor Insurance Bureau (3) Mid Essex Hospital Services NHS Trust, Queen’s Bench Division of the High Court, Claim number HQ14P03864 20 March 2017
Master Yoxall allowed CPR 3.10 to be used to rectify the claimant’s admitted error in withdrawing a Part 36 offer by email where the parties receiving the notice had not indicated in writing that they were willing to accept service by email.
Thus the Claimant’s withdrawal of the Part 36 offer was deemed valid, which meant that it was not capable of acceptance by the defendants.
The situation arose due to the recent change in the discount rate.
The case involved a 14 year old child who was injured in a road traffic accident in August 2008.
She suffered significant injuries and these were made worse by the negligent treatment of those injuries by the NHS.
Judgment had been entered against the Motor Insurers Bureau and the Mid Essex Hospital Services NHS Trust but causation and quantum remained in issue.
The claimant’s Schedule of Loss valued the claim at about £347,000.00 and on 25 August 2016 the claimant made a Part 36 offer to settle the whole of the claim against all defendants in the sum of £340,000.00.
On 27 February 2017 the Lord Chancellor announced that the discount rate under section 1(1) of the Damages Act 1996 would be reduced on 20 March 2017 to minus 0.75%.
This would have the effect of increasing the claimant’s claim to around £602,500.00.
On 28 February 2017 the claimant’s solicitors sent an email to solicitors for the second and third defendants withdrawing the Part 36 offer in the following terms:
“Further to previous correspondence, the claimant withdraws all previous Part 36 offers to settle this claim, and specifically withdraws the previous offer to settle the claim in the sum of £340,000.00 in accordance with CPR 36.9(2).”
On 2 March 2017 the defendants accepted that Part 36 offer by fax and DX. This hearing involved the claimant’s application for permission to withdraw the Part 36 offer and an order that that offer was deemed to have been withdrawn on 28 February 2017.
The relevant Part CPR 36 reads:-
“36.9 (1) A Part 36 offer can only be withdrawn, or its terms changed, if the offeree has not previously served notice of acceptance.
(2) The offeror withdraws the offer or changes its terms by serving written notice of the withdrawal or change of terms on the offeree.
(Rule 36.17(7) deals with the costs consequences following judgment of an offer which is withdrawn.)
(3) Subject to rule 36.10, such notice of withdrawal or change of terms takes effect when it is served on the offeree.
(Rule 36.10 makes provision about when permission is required to withdraw or change the terms of an offer before the expiry of the relevant period.)
(4) Subject to paragraph (1), after expiry of the relevant period—
(a) the offeror may withdraw the offer or change its terms without the permission of the court; or
(b) the offer may be automatically withdrawn in accordance with its terms.
(5) Where the offeror changes the terms of a Part 36 offer to make it more advantageous to the offeree—
(a) such improved offer shall be treated, not as the withdrawal of the original offer; but as the making of a new Part 36 offer on the improved terms; and
(b) subject to rule 36.5(2), the period specified under rule 36.5(1)(c) shall be 21 days or such longer period (if any) identified in the written notice referred to in paragraph (2).”
Section III of CPR Part 6 deals with the service of documents other than the claim form. CPR 6.20(1)(d) permits service by fax or other means of electronic communication in accordance with Practice Direction 6A. The effect of paragraph 4.1(1) of the Practice Direction is that service by email is permitted but only where the receiving party has indicated in writing that they are willing to accept service by email.
The Claimant accepted that service of the notice of withdrawal by email was not in accordance with CPR 6.20. However the Claimant submits that CPR 3.10 may be applied so that service of the notice of withdrawal can be treated as valid.
Rules 3.10 states:
“3.10 Where there has been an error of procedure such as a failure to comply with a rule or practice direction –
(a) the error does not invalidate any step taken in the proceedings unless the court so orders; and
(b) the court may make an order to remedy the error.”
The court here then recited the claimant’s and defendant’s admissions as follows:-
“16. The Claimant submits that Rule 3.10 is of wide application and relies on Integral Petroleum SA v SCU-Finanz AG  EWHC 702 (Comm), Popplewell J. The case may be summarised as follows:
Integral Petroleum SA v SCU-Finanz AG  EWHC 702 (Comm), Popplewell J., on an application to set aside a default judgment, it was held that the claimant’s error of procedure in serving particulars of claim by e-mail was “a failure to comply with a rule or practice direction” under r.3.10(a), service was to be treated as valid. The judge indicated that a narrower approach to r.3.10 would be justified in relation to originating documents. It was said that Phillips v Nussberger (reported sub nom Phillips & Another v Symes & Others (No 3) establishes that r.3.10 is to be construed as of wide effect so as to be available to be used beneficially wherever the defect has had no prejudicial effect on the other party.
- The Claimant referred to the commentary in the White Book under Rule 3.10. Two Court of Appeal are of interest.
In Vinos v Marks & Spencer plc  3 All ER 784: dealing with r.7.6(3) (which stipulates a strict code re service of claim form), it was held that the Claimant could not use r.3.10 as this would have the effect giving an extension of time which was not permitted under r.7.6(3).
Cf. Steele v Mooney  EWCA (Civ) 96,  1 WLR 2819; there the claim form was not served within 4 months, but before the 4 months expired the claimant’s solicitors issued an application for extension of time. However, the application, by error, sought an extension only as regards the particulars of claim and supporting documentation. It omitted to seek an extension of time for the claim form. Held 3.10 could be used.
- Against this, the Defendants make the point that Part 36 is a self-contained code as it asserted in Rule 36.1(1). It is submitted that Rule 3.10 cannot be used in the context of Part 36.
- The Defendants rely on Sutton Jigsaw Transport Limited v Croydon London Borough Council  EWHC 874 (QB) HHJ McKenna. This case concerned an application by the claimant pursuant to CPR 36(9)(3) for permission to accept the defendant’s Part 36 offer made shortly before start of the trial. During the course of the trial, the claimant’s counsel gave the defendant’s counsel a written note accepting the defendant’s Part 36 offer. Shortly afterwards, the defendant withdrew its Part 36 offer. The question therefore arose as to the validity of the service. It was held that the notice of acceptance had not been validly served as it was not sent to the defendant’s address for service.
The claimant sought to circumvent the difficulty with service by inviting the court to dispense with service or to permit, retrospectively, submitted service.
The judge said at :
I have given consideration to the issue of whether, given that the parties’ representatives, solicitors and counsel were at court, it would be overly legalistic not to accede to the claimant’s application. But it does seem to me, on analysis, that CPR 36 does provide clear rules and the parties should be on a level playing field; both should be taken to know the rules and should comply with them if they wish to obtain the benefits which CPR 36 provides. To permit the claimant’s application either by means of the dispensation with service or by ordering substituted service retrospectively, would, as it seems to me, be to give the party, who did not comply with the rules provided for service or acceptance of the Part 36 offer, with an unfair advantage compared with the party that did comply with the rules.”
The court here then said that it preferred the claimant’s submissions and held that CPR 3.10 has a wide effect and could be applied to the present case while accepting that it could not be used to extend a statutory time limit or to avoid service of a document required by statute or to extend the time for service of a claim form.
Here the claimant gave notice in writing and the defendant had received it and knew everything that it needed to know.
It was only the method of service which was defective and the court found that CPR 3.10 could be invoked to cure that defect.
As far as the Sutton Jigsaw case was concerned the court did not regard itself as bound by that decision as CPR 3.10 was not referred to in that case.
Thus the court found that it had the discretion to cure the defect in service and then considered whether or not it should exercise that discretion.
The judge then said:
“In my view, it would not be just or consistent with the overriding objective that a technical breach of the rules should impede the proper assessment of damages in this case.”
So the MIB and the NHS Trust – both state/quasi state bodies sought to use a technicality to avoid a very severely and negligently injured child from getting the correct level of damages.
It would be nice if the NHSLA and the MIB behaved other than in this way.
Proposed amendment to the Civil Procedure Rules
“Anybody which does not consent to service by email shall recover no costs and should always be liable to pay costs on the indemnity basis.”