A Successful Claim for Credit Hire

Guidance on making a successful credit hire claim was laid out in Clark v Ardington, Lagden v O'Conner.

1. Establish there is a valid, enforceable credit hire agreement that complies with the Consumer Credit (Exempt Agreements) Order 1989 (requiring the debt to be paid in no more than four installments in less than 12 months from the date of the agreement).
2. Show the Claimant was impecuniose (that he had no choice but to use a credit hire). The test being whether the Claimant had sufficient funds available without exposing himself and his family to greater loss or an unreasonable burden.
3. Mitigate their losses: it is paramount that a Claimant must take reasonable steps to mitigate their loss. There had to be a genuine NEED for a replacement vehicle and no offer of a courtesy car was made by the insurer. Although a claimant is not obliged to use their own insurance to benefit the claimant.

Road Traffic Accidents: Low Velocity Impact Claims

Low velocity impact (LVI) claims are claims for damages for injuries sustained in a road traffic accident in which the defendant (whilst often admitting negligently having caused the collision) asserts that the speed of impact was so low that the claimant cannot have sustained the injury complained of. Such a defence is often, but not always, accompanied by a plea of fraud – the claimant has made it up.

LVI claims most often involve whiplash injuries to the spine, usually the neck. They are mostly low value claims relating to relatively minor symptoms that resolve over a matter of weeks or months. The value of the claims are invariably such that they fall within the bracket to which, in terms of value, allocation to the fast-track is appropriate.

The fundamental premise of the LVI defence is that there is level of physical force upon a vehicle’s occupant below which no injury can be sustained by the occupant. This claimed threshold for injury is often calculated as between 3 or 5 mph ÄV.

Unlike in laboratory conditions, the actual speed of the impact in which the claimant was injured will rarely if ever be known with any accuracy. Witnesses’ descriptions of speed are notoriously unreliable. Therefore even if it were the case that an impact speed of less than x mph simply could not flex a human spine sufficient to inflict anything other than momentary symptoms, it will not often be the case that the evidence will be such as to compel the court to find that the impact speed was indeed less than x mph.

Vehicle damage is unlikely to be a reliable indicator of impact speed as parts of different cars absorb or transmit force differently to others. There will rarely be clear and detailed evidence as to the precise nature and extent of vehicle damage. Sometimes there will be no, or no obvious, damage, especially in many modern vehicles with absorbent bumper bars beneath the outer bumper. “Vehicle damage reports” are insufficient. They are prepared by insurance assessors simply enquiring into whether any damage is broadly consistent with the account given and whether the likely cost of repair exceeds the value of the vehicle. They do not involve an inspection intended to detect evidence indicative of impact speed. Repair estimates and bills are equally insufficient. Photographs mostly depict only superficial damage and cannot indicate the extent to which force has been transferred to the occupant.

In Armstrong v First York [2005] EWCA Civ 277, the defendant alleged that the impact force involved had not been enough to cause the claimants any injury and therefore their claims to have been injured were fraudulent. The claim was accordingly allocated to the multi-track and a jointly instructed forensic engineer permitted to give evidence. He concluded that the impact was insufficient to cause any injury to the claimants. However, the trial judge(5) unreservedly accepted the claimants as truthful witnesses but also found that the expert’s evidence was logical, consistent and without any apparent error. The judge relied upon the dicta of the Court of Appeal in Cooper Payan Ltd v Southampton Container Terminal Ltd [2003] EWCA Civ 1223 that:

There is no rule of law or practice in such a situation requiring the judge to favour oraccept the evidence of the expert or the evidence of a witness of fact. The judge mustconsider whether he can reconcile the evidence of the expert witness with that of the witness of fact. If he cannot do so, he must consider whether there may be an explanation for the conflict of evidence or for a possible error by either witness, and in the light of all the circumstances make a considered choice which evidence to accept. The circumstances may be such as to require the judge to reach only one conclusion.

The judge found that the claimants’evidence was to be accepted and that the engineer’s evidence involved “some error which has not been detected by this court and to which the court cannot point. The Defendant appealed on the basis that, in line with Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377, it was not open to a judge to reject the evidence of an expert without giving clear reasons why. The Court of Appeal dismissed the appeal as the judge had indeed given a reason for rejecting the expert’s evidence namely that it was inconsistent with that of the claimant’s whose evidence he preferred as he was entitled to.

In effect by basing their case on the impossibility of injury and thus alleging “fraud”, the defendant’s insurers had switched the burden of proof onto themselves. Defendants now no longer allege that injury was impossible and therefore the claim is fraud. Rather, as entitled (see Kearsley below), they now allege that injury was so improbable that the claimant simply cannot establish, on the balance of probabilities, the injury claimed.

Land Law -> A Valid Tenancy

There are three key legal requirements for a tenancy to be created, often known as the “Three Ps”:

· Tenancy created in a proper manner,

· for a stated period of time,

· granting exclusive possession.

Proper manner

There are certain requirements for a tenancy agreement to be considered to be created in a proper manner:

· Identifiable parties, i.e. an identifiable landlord and tenant.

· Identifiable premises, i.e. an identifiable full address for the premises being let, which should include the postcode for the avoidance of doubt.

In law tenancy agreements for a duration of less than three years can be created either in writing or verbally – however, we strongly advise against verbal contracts, since the terms agreed can be difficult to prove at a later date.

In the unlikely event that your tenancy is for a term of more than three years it will need to be created by Deed – this is a technical process and will involve a solicitor, so if you find yourself in this situation, get advice. Note that this does not include shorter contracts that are later renewed past three years – they can still be created by normal contracts.

Period of Time

A tenancy agreement must state the maximum or minimum length of time it is for, and this can be stated either as fixed term or periodic. See the information on fixed term or periodic contracts for details of the differences.

Exclusive Possession

If Exclusive Possession is not granted a Tenancy cannot be created, only a License. This is likely to be the case, for example, with Home Stay accommodation, where you rent a room in a landlord’s own home. Your rights as a Licensee will be substantially different to those of a tenant, so make sure you get advice beforehand.

Credit Hire Basics

Many road traffic accidents result in claims for credit hire, and many personal injury solicitors end up dealing with them. However, this is a complex area of law, with some quite unique rules, and there are many pitfalls for those new to the work. This article is aimed at those who are dealing with a credit hire case for the first time, or who have not been involved since before the major recent decisions.

Most credit hire law comes from two cases: Clark v. Ardington [2002] EWCA Civ 510 and Lagden v. O’Connor [2003] UKHL 64, to which frequent reference will be made.

Validity of agreements

The first and most important point decided in Clark was that a credit hire agreement could be valid, enforceable and exempt from the Consumer Credit Act. If a credit hire agreement complies with the Consumer Credit (Exempt Agreements) Order 1989, then it is likely to be valid. This will be the case if:

1. It requires the debt to be paid in not more than four instalments in less than twelve months from the date of the agreement.

Most challenges to the validity of credit hire agreements are generally unsuccessful, provided the agreements comply with the requirements laid down in Clark.

Duration of hire

The law on this point was set out at paragraphs 115 to 121 of Clark. For the hire period to be reduced, the court should consider whether there was a failure to mitigate on the part of the Claimant, which could be said to be an independent cause of the loss of use of the Claimant’s own vehicle for that period. In particular, if the Claimant acted reasonably in placing his vehicle with a reputable garage, and that garage delayed carrying out the repairs, then the Defendant remains liable for the full period -- but can seek a contribution from the garage.

When the vehicle is repairable, delays generally come in three types: delay in starting repairs, delay in carrying out repairs, and delay in returning the hire vehicle when repairs are complete. A delay in starting repairs may or may not be the fault of the Claimant (or his insurance company). But if the Claimant’s insurer delayed instructing an engineer to inspect the vehicle, or delayed authorising repairs, that period is unlikely to be awarded. On the other hand, if the Defendant’s insurance company was dealing with repairs, the period is likely to be recoverable.

Delay in the course of repairs is very likely to be recoverable, subject perhaps to a contribution from the garage. Most garages are reputable and most people simply leave the garage to get on with it, although some difficulty can arise if the Claimant did not chivvy or chase the garage. In most cases, delays in this period are recoverable.

Delay following completion of repairs is difficult to justify beyond (in some cases) a few days. Most of the time there is no reason a Claimant could not pick up his vehicle straight away, and any delay is likely to be his own fault – or sometimes an administrative error by the hire company. On the other hand, a Claimant who was unable to pick up his vehicle straight away for a specific, good reason – such as being away on business in the hire vehicle – is likely to succeed.

When the Claimant’s vehicle is written off, other complexities arise. If the Claimant did not have comprehensive insurance, then he would have to buy another vehicle himself – possibly with money provided by the Defendant’s insurer. In these circumstances a sort of impecuniosity is relevant, although not in the same way as referred to in Lagden (discussed below).

If the Claimant could afford to buy a new vehicle straight away, then a hire period longer than a few weeks is unlikely to be justified. With an inexpensive vehicle, most claimants would be able to afford a loan to buy a replacement. If the vehicle is more expensive, then this becomes less feasible – but someone who owns a more expensive vehicle is likely to have more money available to buy a new one.

If the Defendant’s insurer delayed payment of the pre-accident value, this can sometimes justify longer claims. However, the courts are generally sympathetic to the argument that the Claimant should have bought a replacement himself, especially if the delays are lengthy.

Hire rate and impecuniosity

In Clark, the Court of Appeal set out that the Claimant must adduce evidence of the rate charged by a car hire company. The burden of proof then passes to the Defendant to show that the Claimant could reasonably have used a different, cheaper hire company. The burden is normally discharged by way of a report on ‘spot hire’ rates: evidence (whether lay or expert) of a survey of the rates charged by local hire firms for an equivalent vehicle. Because these firms do not provide credit hire, they are generally cheaper.

Once the Defendant has discharged this burden, the Claimant must then show that he had no choice but to use credit hire (‘Need’). If so, he can still recover the full credit hire rate. This is the effect of Lagden. Normally, the Claimant had no other choice if he was impecunious: that is, he could not afford to pay spot hire charges up front.

There was no single test laid down for impecuniosity in Lagden. Lord Nicholls suggested (at paragraph 9) that it was a question of priorities: if the Claimant could not pay hire charges without making sacrifices he could not reasonably be expected to make. Lord Hope said (paragraph 36) that an impecunious Claimant could not pay the spot hire charges without exposing himself or his family to a loss or burden which is unreasonable. He also said (paragraph 42) that the dividing line was likely to fall between those who did and did not have a credit or debit card. With respect to the latter, the courts normally consider whether the Claimant had sufficient funds available through his credit or debit card as well.

Impecuniosity nearly always comes down to a question of fact for the trial judge. Each case is decided on its own merits.