Jonathan Wheeler discusses the discount rate, withdrawing part 36 offers, and rectifying procedural errors
The reduction in the discount rate from +2.5 per cent to -0.75 per cent, which took effect on 20 March, did a great service to seriously injured claimants, and many would say about time, too.
The Lord Chancellor accepted that claimants should receive full compensation and they should not be expected to risk provision for their future by speculating their damages on the stock market to make ends meet. While the government is currently consulting on how the rate should be set going forward, for now at least seriously injured people will receive proper provision for future care, loss of earnings, housing, and equipment needs.
Practically then, where future losses are being claimed, cases must be re-assessed, schedules re-drawn, and any offers based on the previous rate revisited and possibly withdrawn. This is what Harriet Thompson’s solicitors attempted to do on 28 February 2017, after news of the imminent change in the discount rate was announced by the Ministry of Justice. However, they got into difficulties when the defendants purported to accept their offer two days later.
Miss Thompson was injured in a road traffic accident in August 2008 when she was 14. The driver who caused her injuries was uninsured and the Motor Insurers Bureau was an additional defendant. The case was further complicated because of the negligent treatment of her injuries, and the Mid Essex Hospital Services NHS Trust was also a defendant. Judgment had been entered against all defendants, with causation and quantum still in issue. The claim included damages for significant future losses.
On 25 August 2016, the claimant made an offer under CPR 36 to all defendants to settle for £340,000. On hearing the government’s announcement, her solicitors sent an email to the defendants to withdraw the offer; the change in the discount rate meant that the value of her claim had risen to over £600,000, according to her counsel. However, withdrawal of the offer by email was only effective under CPR 6.20(1)(d) if the receiving party had indicated in writing that they were willing to accept service by email (practice direction 6A, paragraph 4.1(1)). None of the defendants had done so. The withdrawal then being ineffective, the defendants sent a letter by fax and DX to the claimant’s solicitors accepting the original offer.
The claimant made an application to the court for it to apply CPR 3.10 under its general power to correct an error of procedure. She relied on Integral Petroleum SA v SCU-Finanz AG  EWHC 702 (Comm). In that case Mr Justice Popplewell determined that service of a particulars of claim by email in error could be treated as valid because it was ‘a failure to comply with a rule or practice direction’ which the court could remedy. (The jurisprudence indicates that for originating documents, such as service of a claim form, a narrower approach should be taken, but otherwise CPR 3.10 should be applied widely and beneficially in the absence of prejudice.)
The defendants countered by relying on Sutton Jigsaw Transport Ltd v Croydon London Borough Council  EWHC 874 (QB) to justify their submissions that CPR 3.10 cannot apply within the part 36 regime. In that case, claimant’s counsel mid-trial gave defence counsel a written note accepting the defendant’s part 36 offer. In response, the defendant withdrew its offer saying that the acceptance had not been validly served because the acceptance had not been sent to the defendant’s address for service as required. The court upheld the defendant’s argument on the basis that ‘rules is rules’.
To the relief of Miss Thompson (and more so, her solicitors) Master Yoxall in Thompson v Reeve and others (QBD, 20 March 2017) preferred the submissions made on her behalf. He noted that the email had been received by the defendants and they had had notice of her intention to withdraw her offer. The claimants in Sutton Jigsaw did not rely on CPR 3.10 and as such he did not feel bound by that case. He accepted that part 36 was a self-contained code but not a free-standing one. As it was, the defendants themselves sought to rely on a rule outside of it (CPR 6.20) to support their case that service of the withdrawal was irregular. The court therefore rectified Miss Thompson’s procedural error and the withdrawal of her offer was deemed to have been effective on 28 February, before it was accepted.
Both sides in this case wanted to take advantage of the change in the discount rate. The sympathy of the court was clearly with the claimant here, but experience indicates that one cannot rely on that every time. Practitioners should pay due respect to the actual rules on service in order to avoid any similar difficulties.
JonathanWheeler is the managing partner of Bolt Burdon Kemp