Mistake(n) in the Portal

07 Jul 2020

[1] Zommers v Litham [2] Lis v Rogers [2020] 6 WLUK 499

In consolidated proceedings, the court was required to determine whether low value injury claims commenced in the Portal are – like offers made under CPR, Part 36 – a self-contained code governed exclusively by a Pre-Action Protocol and the Civil Procedure Rules (CPR). Alternatively, were these claims amenable to common law principles that might permit a compromise to be set aside where one party makes a unilateral mistake, which the other party was either aware of or ought to have known about?

In both cases, settlements were reached when the claimants’ solicitor erroneously included lower figures within global offers. When their offers were accepted within the Portal, the claimants’ solicitor subsequently sought to set aside the settlements reached by issuing proceedings under CPR, Part 7, which the defendants then sought to strike out, or obtain judgment summarily in their favour.

The claimants’ solicitor argued that the doctrine of mistake was, and is, applicable to settlements reached in the Portal and that, by reason of their unilateral mistake(s), any settlements were voidable by a mistaken party, i.e. the claimants’ solicitor could elect to set aside the compromises.

If, however, the court accepted that the claims had been validly compromised within the Portal, then the proceedings that had been issued subsequently would be struck out, and/or judgment entered in favour of the defendants, on the bases (i) there was no longer a cause of action to pursue owing to the doctrine of merger, and/or (ii) it was an abuse of process to litigate a claim which has been compromised, in these cases before the commencement of proceedings.

The decision

The court determined, at [33], that the doctrine of unilateral mistake could not be deployed to set aside compromises reached with the Portal, with the result that the two claims had been validly compromised and the CPR, Part 7 claims struck out; its reasoning warrants reproduction in full below.

[32] It is clear that all four judges [in Purcell v McGarry (2012), Draper v Newport (2014), Fitton v Ageas (2018), and Harris v Browne (2019)] viewed the Protocol as a self-contained or free-standing code and they all refused to import common law contractual principles into the Protocol.  In the latter three cases, all three judges concluded that the common law doctrine of mistake does not apply to the Protocol.  I agree with and adopt their reasoning:

a) The Protocol provides a clear, detailed and closely defined structure for the resolution of low-value personal injury claims. 

b) The purpose of the Protocol is to minimise the time and costs involved in reaching a settlement.

c) The steps provided within the Protocol for reaching settlement provide certainty as to the outcome.

d) [Parties] must take care in the way that they operate the Portal so as to ensure that mistakes are not made.

e) To import the doctrine of unilateral mistake would lead to satellite litigation and increase time and costs.

f) To import the doctrine of unilateral mistake would destroy certainty.

g) To import the doctrine of unilateral mistake would be contrary to the overriding objective in that low value cases would not, overall, be deal with justly and at proportionate cost.

What this means for you

This judgment highlights the court’s refusal to import common law principles into self-contained schemes particularly where doing so would, unavoidably, destroy the inherent certainty underpinning these sorts of prescriptive schemes.

The judge in Draper v Newport (2014) was clear that “the solution… was, quite frankly, to be simply more careful in the way that [parties] operated the system…”

"That advice should be heeded by all sides, given that both claimant representatives and compensators are equally susceptible to making these sorts of errors, and will very clearly be bound by settlements arising.” 

Perhaps compensators, in particular, would be well advised to review mitigations currently in place to ensure that the frequency of such errors is confined, given the comparatively high volume of claims they are responsible for processing in the Portal.

Written by Vicky Garner, Team Leader, who acted for the successful defendant, instructed by AGEAS Insurance.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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