Courts and BHR

Today’s Session Karl Stevens v Equity Syndicate Management Limited [2015] EWCA Civ 93 Cheung v Parry Lawson v Mullen McBride v UK Insurance

Court structure

Stevens reminder

Stevens reminder Recorder took an average of the rates quoted by four mainstream vehicle hire companies for vehicles in the relevant group and in this way arrived at a basic hire rate of £63.02 (excluding VAT)

Stevens reminder Cases considered: Giles v Thompson [1994] 1 AC 142, Dimond v Lovell [2002] 1 AC 384, Burdis v Livsey [2002] EWCA Civ 510, [2003] QB 36, Lagden v O’Connor [2001] UKHL 64, [2004] 1 AC 1067 Pattni v First Leicester Buses Ltd; Bent v Highways and Utilities Construction Ltd and anor [2011] EWCA Civ 1384, [2012] Lloyd’s Rep IR 577

Principles Pattni “the loss of the use of a vehicle as result of the negligence of another driver is a loss for which, in appropriate circumstances, the innocent party can recover damages”

Principles Don’t forget that this is the

Principles “It is the duty of the innocent party to mitigate his loss”

Principles “if the loss of the use of the vehicle can be mitigated by the hire of a replacement vehicle, the cost of that replacement vehicle will be the measure of damages recoverable”

Principles “If he could have afforded to hire a replacement vehicle in the normal way, that is to say without credit hire terms and by paying in advance, then the damages recoverable will be that sum which is attributable to the basic hire rate (or BHR) of the replacement vehicle”

Principles In other words, if the client is skint then he’s no option but to use a credit hire company in which case they can pretty much charge what they like?????

Principles BUT……… If the claimant has funds available then “it is necessary, in assessing his loss, to look at any additional benefits he has obtained and so to “balance the loss and gain””

Principles Right back to Dimond v Lovell. 1) break down the charge made by credit hire companies so as to enable the additional unrecoverable elements to be stripped out

Principles 2)

Principles Look at the locally available rate BHR!

Tests 73. …To summarise, the questions are: (i) did the claimant need to hire a replacement car at all; if so, (ii) was it reasonable, in all the circumstances, to hire the particular type of car actually hired at the rate agreed; if it was, (iii) was the claimant “impecunious”; if not (iv) has the defendant proved a difference between the credit hire rate actually paid for the car hired and what, in the same broad geographical area, would have been the BHR for the model of car actually hired and if so what is it; if so, (v) what is the difference between the credit hire rate and the BHR?

Tests “35……But it seems to me reasonable to suppose that the lowest reasonable rate quoted by a mainstream supplier for the hire of such a vehicle to a person such as the claimant is a reasonable approximation to the BHR.”

Tests “36….. try to identify the rate or rates for the hire, in the claimant’s geographical area, of the type of car actually hired by the claimant on credit hire terms.”

Tests “39……The search must rather be for the lowest reasonable rate quoted by a mainstream supplier for the basic hire of a vehicle of the kind in issue to a reasonable person in the position of the claimant.”

Tests Main stream supplier? “27……he had properly concentrated on four major suppliers, National, Europcar, Thrifty and Alamo.”

Tests Terms? “27…….in looking at the nil excess the Recorder was endeavouring to find the closest like for like comparator”

Other relevant bits “The judge disallowed the first nine days on the basis that a reasonable driver would not have delivered his driveable car to the garage for repair before they were ready to start.“

Other relevant bits “The log of activity to which I have referred notes that it was ‘stripped’ on the following day and that the parts necessary to make the repairs did not come until 4 March.”

Lawson v Mullen

Lawson v Mullen DJ relied upon the basic hire rate evidence produced by Rob Stone of TCF Corporate Limited on behalf of the respondent.

Lawson v Mullen He adopted the rates quoted by Enterprise for the hire of a Nissan X-Trail or Honda CRV, the total cost of hire being £2,500.12 for a 28-day period.

Lawson v Mullen In addition, the District Judge allowed the cost of excess reduction whereby the excess was reduced to £500 which amounted to £11.99 per day and the cost of an additional driver which amounted to £10 per day.

Lawson v Mullen “It is up to this court to decide as to whether the sum of £500 excess is out of the ordinary in relation to this particular type of hire for this particular type of vehicle, and this court is satisfied it is not unduly unjust in the circumstances and that the defendants have provided sufficient information to enable this court to find that a car, which I find a Nissan X-Trail and/or a Honda CRV or similar, could have been provided at around that time for this family at a cost of £2,500 and coppers for the exact 28-day period as per the quotation and that for an additional sum of £615.72 that would then cover the excess and reduce it down to £500 and allow the additional driver to drive.”

Other relevant cases Dhami v Amlin “I have come to the conclusion that the two cannot be put alongside one another as equivalent deals. They may be equivalent vehicles but the terms upon which each vehicle was hired are different, and potentially the terms upon which City Inter-Rent hire are very onerous compared with the position in the Accident Exchange hire because the Claimant could potentially, if he damaged the BMW M3, had he hired it, have been liable for a figure of up to £3,000.”

Other relevant cases Dhami v Amlin “That being so, where, as here, City Inter-Rent are unwilling to offer the same deal by waiving, for a sum forming part of the hire charges, a requirement to potentially pay £3,000, it seems to me that I cannot conclude that that is an equivalent ‘basic hire rate’.”

Other relevant cases Dhami v Amlin “a copy of an annual insurance quote which enables the hirer to reduce the amount of the policy excess on a hire vehicle.”

Other relevant cases Dhami v Amlin “I cannot and could not expect the Claimant in this case to have availed himself of it.”

Other relevant cases Marcic v Davis “There the court held that the Claimant who hired a replacement vehicle and paid the waiver fee to achieve a nil excess when his own excess had been £150 was entitled to recover that fee, since, if there had been no collision, the Claimant would, “never have come under any contractual liability to the car hire company.” It was entirely reasonable that he should pay the waiver fee to cover himself against a contractual liability which he would otherwise never have been under.”

Lawson v Mullen “To put it another way, is it reasonable for the insurer to be required to pay an additional £4,300 in order to avoid the appellant facing the potential risk of having to pay a £500 excess in the event of the hire car being damaged?”

Lawson v Mullen “It seems to me that Mr Turner is entirely right in submitting that the ultimate test is one of reasonableness and that if the defendant can show that the claimant has failed reasonably to mitigate his loss, then the hire charges claimed ought not to be recoverable."

Cheung v Parry D’s rates had excesses of £5k, £2.k and £2.5k No evidence they could be reduced to nil. Deposits of between £2.5k and £3k.

Cheung v Parry Points on mileage limitations and geography in were not pressed. “He was right not to do so in light of the Claimant’s evidence of his use and the fact that cars such as these would probably be delivered.”

Cheung v Parry “In reply, Ms Kennedy submitted that where an excess (or deposit) equates to a week of hire, it would be reasonable for a claimant to accept that liability if the daily rate were that much less. Mr Nicol submits that if the Defendant had come to court with but one rate which qualified then it could win the argument. But it had not and so it lost. I agree with Mr Nicol’s submission. The differences he identifies are significant. There is insufficient evidence for me to be satisfied that there is a lower basic hire rate.”

Other relevant cases Ash v AXA “that the ‘basic hire rate’ includes any charges that are paid for collision damage waiver.”

Other relevant cases Ash v AXA “This arises from two factors. First, neither expert has produced a comparable with a zero excess and the rates taken by each would, in order to make a fair comparison, have to be raised to reflect this.”

Other relevant cases Kerr v Toal “If he or she has a credit card it would be available for a range of purposes…….What if the limit has been reached? What if the plaintiff is not in a position to meet the monthly bill in full? That would affect his credit rating.”

Other relevant cases Kerr v Toal “The concept of a form of borrowing from a different source in place of one under a credit agreement does not bear examination….no reason why access to borrowing powers should be regarded as relevant to the question of a plaintiff’s ability or in ability to pay.”

Other relevant cases Kerr v Toal “be in a financial position to meet a bill from his available cash assets”

The future 1) Within 28 days of the date of this order the claimant provide evidence in support of impecuniosity. Failure to comply with this date means the claimant be debarred from raising impecuniosity at the final hearing.

The future 2. Within 42 days of the date of this order, the defendant do file and serve evidence of hire rates available within the claimant’s geographical location, from a mainstream supplier, for the vehicle actually hired, on the terms hired to the claimant and for the dates covering the claimed hire period.

The future 3. Within 56 days of the date of this order, the claimant, if so advised, do file and serve rebuttal evidence.

The future In accordance with the authorities, the claimant must first (if he so claims) produce the evidence to prove that he could not have afforded to hire up front (i.e. that he was impecunious); if the Defendant does not accept that the claimant was impecunious on the evidence produced he should then have time to show that there was a comparable alternative available to the claimant at a lower rate than the contractual credit hire rate. Such evidence not necessarily being factually irrebuttable on issues such as true comparability and availability, the claimant should have further time to rebut the defendant’s rates evidence with his own factual evidence directed specifically at the rate or rates the defendant seeks to rely upon. Clearly, it is only equitable that the claimant should have the opportunity to rebut such rates evidence.

One to watch McBride v Southern Lives in Salisbury. Owns a Jag, hired a Jag. 3 points on his licence.

One to watch McBride v Southern

Above all else

Above all else Get your barrister right! Guy Vickers GlennWilletts Stuart Nicol