Part 36: “A self-contained code, but not completely freestanding.”

The Lord Chancellor announced on the 27th February the reduction in the discount rate to minus 0.75%. The change came into force on 20th March 2017. This is likely to result in a rise in a successful Claimants’ personal injury compensation payment. Many Claimants will therefore be keen to withdraw Part 36 offers previously made. The case of Thompson v Reeve & Others [2017] QBD, heard on 20th March by Master Yoxall, considered whether the court could remedy an error regarding withdrawal of a Part 36 offer made by email. Predominantly the case considered the interaction between CPR r.36 and CPR r.3.10.

Thompson v Reeve

The case concerns a personal injury claim following a road traffic accident in 2008. The Claimant valued the claim at £347,000. On the 25th August 2016 the Claimant made a Part 36 offer to settle the whole claim against the Defendants in the sum of £340,000. Following the announcement of the reduction in the discount rate, the Claimant sought to withdraw this offer, via email, on the 28th February 2017. With the revised multipliers the Claimant’s claim was likely to be in the region of £602,500.

Following the withdrawal, on the 2nd March 2017, the Defendants accepted the Part 36 offer by fax and DX. Both parties no doubt prompted by the reduction in the discount rate.

By an application, the Claimant sought (1) permission to withdraw the Part 36 offer; (2) an order that the Claimant’s offer was deemed to have been withdrawn on 28th February 2017. The main issue in this case was that the rules – set out in CPR r.6.20 and PD 6A para 4.1 – only allow service of documents by email when the receiving party has indicated that they are willing to accept service by email. The Defendants’ solicitors had not indicated they would accept such service.

The Claimant conceded that service was not “good service” but argued that CPR r.3.10 applied, which states:

‘Where there has been an error of procedure such as failing 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 any order to remedy the error.

Ultimately the Defendants did not dispute that the notice had been received but argued that Part 36 was a self-contained code. Hence CPR r.310 could not be used in the context of Part 36.

Master Yoxall found that CPR r3.10 has a wide effect and could be applied to cure defective service. He accepted that Part 36 is a self-contained code but that it is not completely freestanding. He highlighted the Defendant’s own reliance on CPR r6.20 to submit that service was irregular, thereby implying that Part 36 was not completely freestanding. Master Yoxall added; “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.”

Conclusion

Of course there should not be a rush to breach the rules for quick service of a withdrawal of a Part 36 offer. However the decision of Master Yoxall is likely to help those facing such problems following the reduction in the discount rate. Nonetheless, a cautious approach should be taken. In Thompson v Reeve the only issue was in relation to defective service. There was no dispute that the withdrawal notice was received nor was there any dispute that the withdrawal notice provided the Defendants with all the relevant information required. Had these issues been present it may have affected the outcome of the application.