BIG News In Credit Hire – The Court of Appeal rules that recoverable BHR for Claimant will be the lowest reasonable rate charged by comparable hire companies.

joanna_hastie_piBy Joanna Hastie

Stevens v Equity Syndicate Management Limited [2015] EWCA Civ 93

Traditionally, when assessing recoverable rates, credit hire companies have argued that where a range of comparable basic hire rates (BHR) can be shown from other companies, some of which are higher than the credit hire rate claimed, the Claimant’s credit hire rate should be awarded in full.

In the recent case of Stevens the Court of Appeal gives useful guidance as to how the basic hire element of the total charge incurred under a motor vehicle credit hire agreement is to be ascertained.

The facts are as follows:

  • C was in a no fault RTA on 10th February 2011 in which C’s Audi A4 was damaged
  • C had comprehensive insurance but did not want to jeopardise his own no claims discount by claiming for repairs on his own policy. Accordingly his insurers put him in touch with credit hire company, Accident Exchange.
  • A replacement Audi A4 was hired for a period of 28 days whilst C’s own vehicle was being repaired.
  • Daily hire rate was claimed at £198.60/ day incl. VAT.

The Claimant was found not to be impecunious and therefore the court had to decide what sum was attributable to the basic hire rate of the replacement vehicle claimed.  In addressing this issue the Court of Appeal ruled that in future, Judges should look at the lowest reasonable rate charged by a mainstream supplier operating in the Claimant’s local area:

“36. It follows that a judge faced with a range of hire rates should try and 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. If that exercise yields a single rate then that rate is likely to be a reasonable approximation for the BHR. If, on the other hand, it yields a range of rates then a reasonable estimate of the BHR may be obtained by identifying the lowest reasonable rate quoted by a mainstream supplier or, if there is no mainstream supplier, by a local reputable supplier.”

This approach applies when either impecuniosity has not been pleaded or the Claimant is found not to be impecunious and therefore the basic hire rate is recoverable, rather than the full credit hire rate claimed. The judgment of the Court of Appeal in Stevens is useful for Defendants when identifying the appropriate level of BHR. The full approved judgment can be accessed here: http://www.bailii.org/ew/cases/EWCA/Civ/2015/93.html

Advertisements

One comment

  1. […] the effect of the Court of Appeal Decision in Stevens -v- Equity Syndicate Management Ltd [2015] in BIG New In Credit Hire – The Court of Appeal rules that recoverable BHR for Claimant will be the l… (March […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: