Trade

Specialist accident car hire - whether terms of hire constituting regulated consumer credit agreement - whether full cost of hire recoverableDimond v Lovell: HL (Lord Browne-Wilkinson, Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Saville of Newdigate, Lord Hobhouse of Woodborough): 11 May 2000

The claimant's car was damaged in a road accident caused by the defendant.

While her car was being repaired she hired a car from a specialist accident car hire firm on terms that the cost of the hire would be paid for out of the damages recovered from the defendant and, if necessary, the company would pursue her claim at its own expense.

The defendant challenged the sum claimed as hire charges on the ground that the agreement was a regulated consumer credit agreement for the purposes of the Consumer Credit Act 1974 and was unenforceable for failure to comply with the requirements of that Act.

The judge found for the claimant but the Court of Appeal reversed that decision.

The claimant appealed.Giles Wingate-Saul QC, Marc Willems and Michael Jones (instructed by Cottrill Stone Lawless, Manchester) for the claimant; Ian McLaren QC, Steven Turner and Andrew Burrows (instructed by Nelson & Co, Leeds) for the defendant.Held, dismissing the appeal, that, all the provisions concerning the pursuit of the claim were express or implied conditions which deferred the right to recover the hire and therefore constituted a granting of credit; that, therefore, the agreement was a regulated agreement under the 1974 Act and, since it did not comply with the requirements of the Act, was unenforceable; that, in any event, if it had been enforceable the full hire cost charged would not have been recoverable as the specialist accident hire companies provided more than the cost of a replacement car; that such additional benefits were not recoverable against the defendant because they were not compensatable losses and additional benefits obtained as a result of taking reasonable steps to mitigate loss had to be brought into account in the calculation of damages (see British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd ([1912] AC 673) and Bellingham v Dhillon ([1973] QB 304); and that the recoverable loss after allowance had been made for the additional benefits which the specialist accident hire company provided would, normally, be the market rate for hiring a car from an ordinary car hire company.

(WLR)