Further to my post directly above Matt; Paddypower’s response to my email enquiry was as follows:
“Thank you for contacting Paddy Power Customer Support.
It would appear that the Rule 4 applied to your bet was correct. As you placed the bet at the earlier price, the price of the withdrawn horse at that particular time would have applied for the reduction.
When you placed your bet at 2015-07-08 20:50:14, Newtons Law was priced at 3/1. As a result the reduction was applied based on 3/1 = 25%.
I hope that clarifies things for you and my apologies for any confusion.”
So the big question: is a Rule 4 deduction decided at the price of the non-runner when the bet was made; or the price of the non-runner at the time the non-runner is withdrawn? Or is it just the best situation to suit the bookies pocket?