The doctrine of unilateral mistake cannot be used to set aside settlements in portal cases where the claimant solicitors erroneously included lower figures within global offers, two county court judges have ruled.
As a result, District Judge Johnson in Liverpool decided last month that two claims had been validly compromised and struck out the part 7 claims brought by the claimants’ solicitors, Bond Turner, to set aside the settlements.
In consolidated proceedings, Zommers v Litham saw the claimant offer £23,519 on the third round of offers, but the figure was not replicated in the agreement section of the portal. Instead, it still recorded Ageas’s previous offer of £12,758.
In Lis v Rogers, the claimant said the £1,000 request for an interim payment, which had earlier been accepted by the defendant, had been “dragged through” to the stage 2 settlement pack – the part 7 claim sought up to £10,000.
The claimants argued that the doctrine of mistake was applicable to settlements reached in the portal and that, by reason of their unilateral mistakes, any settlements were voidable by a mistaken party.
DJ Johnson disagreed. She said it was clear that the judges in four previous county court decisions cited to her viewed the protocol as a self-contained or free-standing code and they all refused to import common law contractual principles into it.
Three of the cases were similar to the ones before her and she said the judges all concluded that the common law doctrine of mistake did not apply to the protocol.
DJ Johnson said: “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) Solicitors acting for claimants 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.”
The judge said that, in any event, the claimant would not have a real prospect of succeeding in establishing unilateral mistake.
In both cases, the court had no information before it as to the fee-earner’s intentions at the time when the figures were put into the portal.
She added that, had she accepted that there were mistakes by the fee-earners at Bond Turner, there would have been a real prospect of showing that Ageas had actual or constructive knowledge of the alleged mistakes and the issue would have gone to trial.
BLM team leader Vicky Garner, who acted for the successful defendant in Zommers, instructed by Ageas Insurance, noted that the judge in one of the county court cases, 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”.
Ms Garner said: “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.”
Meanwhile, Crown Office Chambers has reported a similar ruling in May by Deputy District Judge Dorman in Truro County Court where the offer of £5,500 for general damages was accidentally entered as £550
DDJ Doman followed the same decisions as DJ Johnson to hold that the doctrine of mistake was excluded from the portal.
According to barrister Matthew Turner, who was instructed for the defendant by BLM in A v B, the judge considered that it did not matter whether the defendant was aware that the claimant had made a mistake and so it was entitled to accept the offer.
“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 that was meant to be £25), 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.”