When ‘Rough Justice’ is Enough: Common Law Doctrine of Mistake Excluded from Portal Claims
Matthew Turner acted for the successful Defendant in the recent case of A v B (DDJ Doman, Truro CC, 26/05/20), in which the court held that the common law doctrine of mistake does not apply to Portal claims.
Mistakes in the Portal are Permanent
Since 2013, low value personal injury claims in road traffic accidents where liability is admitted have been dealt with via the Claims Portal. This scheme allows claimants and defendants to exchange settlement offers and (hopefully) reach an agreement. When one party accepts another’s offer, a binding settlement agreement is formed and the claim is compromised.
But what happens if one of the parties makes a mistake when making or accepting an offer? For example, what if the claimant’s representative accidentally makes an offer of £550.00 for general damages instead of £5,550.00, and this is accepted by the defendant? Can the claimant rely on the doctrine of mistake to argue that there was no binding agreement? What if the defendant knew the offer was a mistake?
This is exactly what happened in A v B and the court held that the common law doctrine of mistake does not apply to the Portal because it is a self-contained code. This is the latest in a series of County Court decisions which have held that ‘rough justice’ is an acceptable price to pay to maintain the proportionality, certainly and cost-effectiveness of the Portal scheme, and to prevent satellite litigation.
A Mistaken Offer
The claim arose out of a road traffic accident in 2016. The claim was submitted via the Portal and liability was admitted. Over a year later, the Claimant’s solicitors submitted a Stage 2 pack and the parties began to exchange offers.
The Claimant initially offered £5,750.00 for PSLA, and the Defendant responded with £4,000.00. The Claimant’s representatives then submitted a counter-offer of £550.00 instead of £5,550.00. The Defendant accepted this offer and promptly made payment of the agreed sum via BACS transfer.
The Claimant’s representatives quickly realised the mistake they had made and contacted the Defendant’s solicitors to attempt to withdraw the offer and return the money, including by sending a cheque for the same sum which the Defendant refused to accept. The Defendant maintained that the matter had been compromised when it accepted the Claimant’s offer via the Portal.
The Claimant then issued Part 7 proceedings and the Defendant brought a strike-out application on the basis that the Claimant had no reasonable grounds for bringing the claim because it had already compromised, and to continue to do so was an abuse of the court’s process.
When ‘Rough Justice’ is Enough
The narrow question for the Judge was whether the common law doctrine of mistake applied to the Portal. If it did, then the Claimant clearly had reasonable grounds for bringing the claim. If it did not, then there were no such grounds and the claim would have to be struck out.
The Defendant relied on the previous cases of Draper v Newport (DJ Baker, Birkenhead CC, 03/09/14) and Fitton v Ageas (HHJ Parker, Liverpool CC, 08/11/18). Both involved mistakes in the Portal. In Draper, the claimant’s solicitor accidently accepted the defendant’s offer when they did not have authority to do so. In Fitton, the claimant’s solicitors accidently made a gross offer of £2,500.00 instead of £3,900.00 which was accepted by the defendant. In both cases the judges held that the doctrine of mistake could not and should not apply to Portal claims. In Fitton, HHJ Parker carried out a detailed analysis of the relevant legal principles and overturned the decision of the Deputy District Judge who had found that there was no settlement because there was no ‘meeting of the minds’.
Both judges were concerned that applying the doctrine of mistake would: (1) open up the risk of disproportionate satellite litigation; and (2) have a real risk of undermining the certainty, speed and cost which the Portal is designed to provide. HHJ Parker said that while this might lead to ‘rough justice’ on occasion, the overall benefits of the system far outweighed the negatives.
The Claimant argued that these authorities could be distinguished because the mistake in this case was more obvious – and therefore the effect more acute – than in the previous cases, and that the Judge should consider the interests of justice over proportionality.
Decision in A v B
DDJ Doman followed the above decisions and held that the doctrine of mistake was excluded from the Portal. He agreed that the Portal was a self-contained procedural code – similar to Part 36 – and so the rules of the common law do not apply. Furthermore, to apply the doctrine of mistake would undermine the certainty, speed and costs that the Portal is designed to provide.
The Judge held that if the doctrine of mistake did not apply (as he had found that it did not), then the Claimant had no reasonable grounds to bring the claim as it had been compromised, and to continue to bring would be abuse of court process. He therefore struck out the Claimant’s claim.
Even the Greatest Mistakes
Whilst the case is further authority that the common law doctrine of mistake does not apply to Portal claims, the judgment is particularly interesting for two reasons.
First, the Judge considered that it did not matter whether the Defendant was aware that the Claimant had made a mistake. He stated that it was nevertheless entitled to accept the offer under the auspices of the Portal scheme.
Second, he held that in deciding whether the doctrine of mistake was excluded, the magnitude of the mistake is “neither here nor there”. The common law was either excluded or it was not. Even in cases where the mistake is more stark (for example, an offer of £25,000.00 that was meant to be £25.00), to apply the doctrine of mistake would lead to disproportionate satellite litigation. This is because the cost of rectifying the error – i.e. issuing proceedings – will likely exceed the cost of the mistake.
This decision provides helpful clarification but should serve as a warning to claimants and defendants alike: be very careful when submitting offers via the Portal, because even the greatest mistakes will be permanent.
Matthew Turner was instructed by BLM, for the Defendant.
