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The Court of Appeal has given a helping hand in credit hire claims. Third Party insurers will sometimes offer the claimant a “free” replacement car, for use while the claimant's vehicle is being repaired, and if this is refused, may then argue that the claimant has failed to mitigate his loss and make no offers in respect of a subsequent claim for credit hire.
However, the Court of Appeal, in the recent case of Copley v Lawn & Others (2009), has decided in the claimant's favour and provided some guidance on this issue.
It was recognised by the Court of Appeal that defendant's insurers were not in fact offering a “free” car, but instead they were paying for a hire vehicle with the cost being hidden from the claimant. In reality the offer is to find and then pay for a hire vehicle and unless the claimant, or their advisor, is aware of what hire charges the defendant's insurer is able to secure, then they are unable to compare the vehicle being offered against one the claimant can arrange.
It was therefore concluded that:
- It is not unreasonable for a claimant to reject or ignore an offer of a replacement vehicle from a defendant (or their insurer) which does not make clear the cost of hire to the defendant to enable the claimant to make a realistic comparison with the cost they have, or will incur, when arranging a replacement vehicle through a credit hire provider.
- Following Strutt v Whitnell (1975) , if a claimant does unreasonably reject or ignore a defendant's offer of a replacement car, the claimant is entitled to recover at least the cost which the defendant can show he would reasonably have incurred, i.e. he does not forfeit his damages claim altogether.
To that extent, the general rule that the claimant can recover the ‘spot' or market rate of hire for his loss of use claim was upheld, unless and to the extent that the defendant at the time of the hire shows that it can provide a car at a cheaper rate. |
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