Court of Appeal Clamps Down on Inflated Credit Hire Charges
Claims for excessive motor hire charges pursued by road accident Claimants whilst their damaged vehicles are off the road have long been the bane of many an insurance company and indeed many a Judge, trying to pick his or her way through the minefield of case law dealing with the question of what constitutes an acceptable daily rate for a hire car.
The insurance industry claimed last week that they had secured a major victory on the issue following the Court of Appeal’s decision in the case of Stevens v Equity Syndicate Management  EWCA Civ 93.
In the past it was very often the case that a Claimant’s insurer, having supplied the customer with a replacement vehicle following an accident, would seek to recover a daily rate for the vehicle from their opponent’s insurers in circumstances where, in reality, the Claimant had at best only tacitly agreed to the daily hire rate proposed, but in reality would have no reasonable prospect of being able to meet the total hire charges in the event that they proved irrecoverable from the Defendant insurer.
Giving his Judgment, Lord Justice Kitchin said that any Judge assessing the merits of a hire claim should focus on trying to strip out those layers of irrecoverable costs added onto the basic hire rate, and address his thoughts more directly to the issue of what constituted a reasonable rate for the hire vehicle in question.
Lord Justice Kitchin stated: “A Judge faced with a range of hire rates should try to 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 to the basic hire rate.”
He went on to say that if the exercise revealed a range of rates, then an assessing Judge should gravitate towards the lowest reasonable rate quoted by a recognised mainstream supplier, or failing that, by a local reputable supplier.
Any road accident victim agreeing to accept a replacement temporary vehicle on hire terms should always give careful consideration to the prospect of actually having to pay the charges themselves, in the event that their insurer is unsuccessful in recovering those charges from the Defendant at the rate claimed. A hire car is not the same as a courtesy car, and a failure to grasp the distinction can prove costly for the unwary Claimant.