Does the failure to include a non–portal offer within the Court Proceedings Pack amount to a breach of The Protocol?

Alex Jones recently represented a Claimant in a long and drawn–out case which ended in victory for the Claimant. 

The case started its life, as many do, in the Portal for Low Value Personal Injury Claims in Road Traffic Accidents. The parties were unable to reach a settlement of the claim at the end of the Stage 2 process, despite a total of five offers being made during the consideration period, four of which were made within the portal and one being a Part 36 offer from the Defendant made via email. 

Following the issue of Part 8 proceedings, the Defendant objected to the use of the Stage 3 procedure under CPR 8, PD9.1 on the basis that the Claimant had not included the email Part 36 offer within the Court  Proceedings Pack (‘CPP’), and that constituted a breach of the Protocol justifying dismissal of the claim.

The Court subsequently dismissed the Claimant’s claim pursuant to PD8B.9.1, which provides;

9.1 Where the defendant opposes the claim because the claimant has –

(1) not followed the procedure set out in the relevant Protocol; or
(2) filed and served additional or new evidence with the claim form that had not been provided under
the relevant Protocol,
the court will dismiss the claim and the claimant may start proceedings under Part 7.

(Rule 45.24 sets out the costs consequences of failing to comply with the relevant Protocol.)

The Court had no option but to dismiss the Part 8 Claim. The Claimant had no option but to issue Part 7 proceedings.

The Defendant maintained their position throughout Part 7 Proceedings and sought to argue that the Claimant should be limited to Portal costs only pursuant to CPR 45.24.

It is important to note that the Claimant did not elect to discontinue the Part 8 process as is often the case (thus CPR 45.24(1)(b) had no relevance). It was in fact the Defendant who opposed the use of that Part 8 process on the grounds of an alleged breach by the Claimant. Accordingly, the matter only concerned CPR 45.24(1)(a): “where the Claimant does not comply with the process set out in the relevant Protocol” and CPR 45.24(2)(b)(iii): where the Claimant acted unreasonably “in any other way that caused the process in the relevant Protocol to be discontinued”.

Following a trial, the Trial Judge, sitting in Peterborough County Court, was asked to determine the costs issues.

– It was accepted that the Defendant’s Part 36 email offer was made during the consideration period (Paragraphs 7.35, 7.36 and 7.37 of the Protocol refers).

– However, it was submitted that the issue was not the timing of the Defendant’s Part 36 email offer. The central question the Court must determine was a simple one: Did the failure to include a non–portal offer (i.e an emailed offer) within the CPP amount to a breach of The Protocol?

– It was therefore important to consider what the Protocol specifically states regarding how the parties are to make offers, whether or not offers are made in accordance with The Protocol and moreover what offers are to be included in the CPP.

– In terms of how offers are to be made, the Court was referred to paragraph 7.38 of The Protocol, which concerns the Defendant accepting the Claimant’s offer or making a counter offer, which provides; 7.38 Within the initial consideration period (or any extension agreed under paragraph 7.36) the defendant must either accept the offer made by the claimant on the Stage 2 Settlement Pack Form or make a counter–offer using that form.

– It was submitted that the use of the words “using that form” was clearly deliberate and done so to ensure that Defendants make offers using the Stage 2 pack form only. The Protocol clearly does not state that a Defendant can make an offer in any other way other than using the prescribed form.

– The next issue to consider was whether the Defendant’s Part 36 email offer should be included in the CPP and whether the failure to include it amounts to a breach of The Protocol, to such an extent that it could be considered an unreasonable failure triggering the costs implications of CPR 45.24.

– It was submitted that paragraphs 7.64 to 7.66 of The Protocol were perfectly clear and unambiguous in that the contents of the CPP are limited to matters that took place during the Stage 2 process, which includes offers made using the Stage 2 Settlement Pack Form only.

– The Protocol does not allow a party to include in the CPP offers that were made outside the Stage 2 Process when the form is not used. The Defendant’s email Part 36 offer was not made using the form, therefore including it into the CPP would have amounted to a breach as it was contrary to the specific wording of The Protocol.

– The Claimant submitted that there had been no breach of The Protocol on the Claimant’s part, who had adhered to and followed its specific wording concerning Protocol offers and what should be included in the CPP.

– The Defendant unreasonably dropped the claim from the Stage 3 process using the ‘will’ provision of CPR 8, PD9.1 with a unjustifiable allegation of Protocol breach, which diverted the matter and prevented it from being dealt with swiftly.

– The Claimant’s efforts during the Part 7 proceedings to resolve the underlying claim for damages went unanswered due to the Defendant’s subsequent refusal to formally comprise damages due to their position on costs.

The Defendant referred to paragraph 5.1 of The Protocol in an attempt to convince the court that the Part 36 offer email was a valid Protocol offer, but the Judge accepted that the cited provision merely concerned “all written communications not required by the Protocol must be sent by e–mail”. It was accepted that those provisions did not extend to the making of offers of settlement, which are required by The Protocol under the detailed provisions contained within the Stage 2 process pursuant to paragraph 7.38. 

The trial judge considered in detail the judgment of HHJ Murdoch in the appeal case of Matloob v EUI Ltd [2019] E02BM772 (Appeal Case number BM90030A). In determining the definition of a Protocol offer HHJ Murdock held that,

“I give to CPR 36.25 its natural meaning, that is a protocol offer must be set out in Part B” and further that, “I turn to the protocol and 7.64. I utilise its clear language, that is Part B must contain the final offer and counter offer from the Stage 2 settlement pack. The final offers must therefore be those that appear in the Stage 2 pack. That fits with 7.38 which provides that offers and counter offers are made via the pack. It is the pack that carries importance. And that fits with the ethos of the portal namely that communication is carried out by using its systems and procedures as an efficient, cost and time saving proportionate system”. HHJ Murdoch concluded that, “In this case the two offers differ. The Part B document does not contain the final offer but an amended or counter offer. The two are different and therefore the Part B offer cannot be a relevant protocol offer for the purposes of 36.25 or 36.29. Further 36.24 (4) is clear that nothing prevents a party from making an offer to settle in whatever way that party choses whether that be by email, telephone or letter but it does not have the consequences set out in Part 36. The consequence of the Claimant’s action was that an offer was made that fell outside the protocol offer process and fell squarely within 36.24(4)”.

The Trial Judge accepted the Claimant’s submissions that, albeit not binding, HHJ Murdoch had provided clear and authoritative guidance that the CPP Part B Form must contain the final offer and counteroffer from the Stage 2 Settlement Pack Form and it was “the pack that carries importance”.

Further, applying HHJ Murdoch’s approach, the Trial Judge held that the Defendant’s Part 36 email offer could not be viewed as a valid Protocol offer for the purposes of Rule 36.25 or 36.29, accordingly therefore it was not capable of being included within a CPP, accordingly the Claimant’s conduct was vindicated without hesitation.

The Judge was equally critical of the Defendant’s approach in objecting to the use of the Part 8 Process, failing to engage on the issues and only compromising damages at the door of court. The trial Judge had no hesitation in acceding to the Claimant’s application for costs exceeding fixed costs pursuant to CPR45.29J on account of the exceptional circumstances and conduct of the Defendant.

The Trial Judge ordered the Defendant to pay the Claimant’s costs on the indemnity basis for the entirety of the action, paying £5,000 on account and reserving any detailed assessment to himself.

A salutary lesson for Defendant’s that the decision to oppose a claim utilising the ‘get out of jail free’ card found in PD8B.9.1 is not the end of the story and making a meritless allegation can have serious (and expensive) consequences.

Alex was instructed by Scott Bouch of Prowse Phillips Solicitors.

Alexander Jones
January 2023

Alex undertakes civil work for both Claimant and Defendant and is willing to accept cases on a Conditional Fee Agreement where the merits allow.

If you wish to discuss any matter with Alex, his clerks can be contacted on 0151 236 4421