End of the road for credit car hire litigation?

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End of the road for credit car hire litigation?

District Judge Stephen Gerlis examines some of the practical aspects of the latest credit hire rulings


The Court of Appeal has now pronounced in Clark v Ardington and other related cases [2002] EWCA Civ 510; [2002] All ER (D) 155 (Apr), (2002) LTL, 19 April that so-called Helphire agreements, whereby credit is given for the hire of an alternative car after an accident, are enforceable against the hiring party and therefore can be claimed against the party responsible for the accident.

The great majority of the judgment deals with just that point.

However, this article is more concerned with the ancillary matters also considered by the Court of Appeal and which have also been the subject of dispute for some years.

Delay in repairs

A frequent complaint by defendants is that the amount of time taken to repair the claimant's car is much too long.

Should a defendant be liable for hire charges during delays? The Court of Appeal had no doubt - the claimant should not suffer because of facts beyond his or her control.

Said Lord Justice Beldam: 'For a supervening cause or a failure to mitigate to relieve a defendant of a period of hire there must, in my judgment, be a finding of some conduct on her [the claimant's] part or on the part of someone for whom she is in law responsible, or indeed of a third party, which can truly be said to be an independent cause of loss of her car for that period.'

The claimants in both cases in which the issue was raised appeared to have acted reasonably in placing the cars in the hands of respectable repairers and there were no supervening events.

The Court of Appeal ruled that delays of the sort complained of were foreseeable and, in the absence of any failure on the part of the claimant to mitigate, there is no reason why they should not be able to recover hire charges during the period of delay from the defendants.

However, the Court of Appeal suggested a remedy for defendants - the insurers of the defendants could, where the period of repair was unjustified, seek a contribution from the repairers themselves.


In one of the cases the claimant could not afford to hire a car and relied on the Helphire scheme rather than hiring through an alternative, possibly cheaper, company.

Should the defendant be liable for the higher rates charged by the credit hire company?

The Court of Appeal fell back on first principles - a wrongdoer must take his victim as he finds him.

Therefore, a defendant who damages someone's car should not be surprised to find that he will have to pay for a replacement car if it is needed by the claimant.

As the claimant in this case was not able to finance the hire of an alternative vehicle himself, he had no choice but to rely on the credit provided by the Helphire scheme and there could be no complaint that he had not mitigated his loss.

This does mean that, in some cases, the court may have to inquire into the financial ability of a claimant to finance car hire himself, but the Court of Appeal warned about getting involved in procedures that might put the parties to great, and presumably unnecessary, expense.

Should a defendant be liable for the notional hire charges of a more expensive car equal to that which was damaged or for the hire charges which were actually incurred? In this instance the Court of Appeal accepted the view that the damages recoverable should be the actual loss and not any notional cost of hiring a more expensive vehicle.

However, the Court of Appeal said that if a need for a particular replacement car is established, then the cost incurred of hiring that car is recoverable.

Calculation of hire rate

How does one assess what is a reasonable rate of hire? In the court below, the judge took the average from both experts' reports and added on 10% for seasonal variations.

The Court of Appeal was not impressed.

Adopting that solution would mean that a claimant could only recover an average cost derived from the joint figures plus the somewhat arbitrary 10% rather than the actual cost of hire.

It took what appears to be an eminently sensible approach - the claimant is entitled to recover the cost of hiring a replacement car provided it is reasonable, bearing in mind the duty to mitigate loss.

What is reasonable will depend on the particular circumstances, including evidence as to local car hire rates.

Thereafter, the evidential burden will be on the insurers to show that such rates are not reasonable.

These clearly are matters of fact, not law.

The Court of Appeal did not believe that a decision on such issues would be any more difficult than in respect of car repair charges.

Delivery and collection Helphire delivers a replacement car to the claimant and collects it, for which it makes a charge.

Should this charge be recoverable from the defendant? Again, the Court of Appeal took a pragmatic view - has the claimant mitigated his loss by taking reasonable steps to collect and return the car himself? If so, then reasonable taxi or public transport fares might be recoverable.

Was it absolutely necessary for Helphire to deliver and collect the car, for example, where the claimant is disabled? If so, a delivery and collection charge may well be reasonable.

Again, this is a question of fact in each case and will depend on the surrounding circumstances.

Engineer's report

Helphire uses an engineer to report on the damage to the vehicle in order to assist it in agreeing the cost of repair.

Should the engineer's fee for a report be recoverable from the defendant? No, said the judge in the court below and this was confirmed by the Court of Appeal.

The report is basically for Helphire's use and is not part of the loss.

However, this does rather beg the question, if the fee is not part of the loss, can it be claimed as part of the costs if litigation ensues? I think the simple answer is also no.

The cost of a report will only be recoverable if the report is prepared for the purpose of litigation, not pre-action negotiation.

Whether this is the end of credit car hire litigation remains to be seen.

The House of Lords could be the next stop in Clark.

Also, credit hire companies, apparently stumped by unenforceable hire agreements, could be arguing that they have a restitutionary remedy against their customers to recover generally, or on a quantum meruit basis, monies recovered by customers from third parties for loss of use (Car Crash Line Ltd v Branton Edwards (a firm) (2002) LTL, 18 April CA).

District Judge Stephen Gerlis sits at Barnet County Court

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