Keoghs and Aviva defeat astonishing ongoing credit hire claim

In the Nottingham County Court – Recorder Edis QC

Keoghs acted for Aviva in the case of Harries v Baguley, where the claimant issued proceedings for the resolution of liability after hiring a car for almost 1,000 days (at the point of the hearing) estimated to be worth in the region of £400,000.

Aviva had robustly denied liability for the incident, stating that their insured’s vehicle was correctly parked at the roadside whilst the driver, Mr Baguley, checked for a flat tyre.

Nevertheless, to try and aid the mitigation of loss, Aviva had endeavoured to pay for the claimants’ insurance excess to end hire; this ultimately wasn’t accepted. The circumstances of the case (and the value of the claimants own vehicle) were such that they did not feel they could deal with the whole claim without prejudice to liability.

Here the Keoghs team examine the case and what insurers can take from it.

The Facts

The accident occurred around 5.30pm on 27^th December 2016 between the claimant’s Audi A5 and the defendant’s Honda.

Liability was firmly disputed from the outset, with the claimant alleging that the defendant had reversed into her path.

The defendant’s version of events was markedly different. They alleged that they had been to a family party when they felt that the car might have a flat tyre.

They parked up on the kerb and Mr Baguley (driving) got out of the car to check the tyres, leaving his then wife (now Ms Bailey) and family in the vehicle. As he was doing so the claimant’s vehicle simply collided with them. The policyholder’s parents had also been at the party and came upon the scene of the accident. The policyholder’s father assisted the claimant in getting out of her vehicle.

It was said that the claimant behaved oddly after the accident in that she didn’t attempt to exit the car but simply remained in the vehicle smoking. Photographs taken at the scene of the accident seemed to show that the claimant’s windscreen view was obscured.

As the pre-accident value of the claimant’s vehicle was a significant sum of money and it was felt that the liability case was strong, payment of the claimant’s vehicle was not made, resulting in the hire being ongoing at the point of the liability trial.

The claimant had been advised to approach her comprehensive insurers and a cheque to cover her excess was sent to her. That cheque was returned.

The claimant relied upon statements and questionnaires from four allegedly independent witnesses. Their evidence was that the insured driver had reversed from a driveway into the claimant’s path.

Both parties obtained expert engineering evidence, each witness supporting the version of events of those who instructed them.

The Trial

There were two questions the Court had to adjudicate upon:

1. Was the insured’s car stationary and lawfully parked at the time of the accident or had it reversed into the claimant’s path
2. Was there any degree of shared blame

Rather tellingly, and much to the Judge’s concern, none of the witnesses for the claimant attended the trial. It had previously become apparent that the witnesses had been involved in a previous claim and also the address they had given was the same as that for the garage to where the claimant’s car had been recovered. It was this garage who had referred the claimant to the credit hire company.

It had always been considered that the claimant’s case was that the defendant had reversed from the driveway, however it was alleged at the trial that the claimant’s case had never been advanced on that basis and she had never spoken with the witnesses and in fact actively tried to distance herself from them and their version of events.

By contrast, the insured, the driver and the insured’s parents all attended the trial to give evidence.

The claimant denied that her windscreen was obscured and suggested that the “frost” on her windscreen was actually smoke from her sitting in the car smoking.

The claimant admitted seeing the brake lights illuminated on the insured’s vehicle but said she had not seen the reversing light.

She alleged that she had seen a vehicle parked half on half off the pavement on the left hand side of the road and had moved out slightly to pass it when the insured’s vehicle reversed out in front of her.

The Judgment

Recorder Edis QC was not prepared to place any weight on the evidence of the claimant’s alleged witnesses. They were not there for cross-examination and either no, or no good reason had been provided for their failure to attend.

The near identical nature of their descriptions of the accident were “suspicious to say the least”.

As a result, the Judge was not prepared to place any weight at all upon what the absent witnesses said.

The Judge found that the defendant had no blame for the accident and Judgment for the defendant on the claim and the counterclaim was granted.

What does this mean for insurers?

Keoghs Motor Services Director John Gibson said:

“Cases of this nature are worrying for the industry as a whole.

Credit hire is a valuable service for many thousands of motorists every month who lose mobility due to a non-fault accident. Critically whilst in the majority of cases the insurer at fault settles the charges, they are fundamentally provided on credit, i.e. the claimant retains a liability to pay for them in the event the insurer isn’t liable.

In this particular case liability was strongly denied, and one has to ask at what point does a claimant get guided to potential risks of continuing hire and by whom? The ability to run up such sums on credit without sense-checks and balances surely needs to be looked at”.

Partner Melanie Mooney who ran the case at Keoghs said

“Whilst we would always advocate early without prejudice interim payments wherever possible, there are cases where a robust stance simply has to be made and this was one of them.

This case reinforces the need to fully investigate the accident circumstances and to keep the insured and witnesses fully engaged with what has been a lengthy Court process. The persuasive power of even non-independent witnesses should not be underestimated”.

Richard Hiscocks, Director of Motor and Casualty Claims at Aviva, said: “This is one of the most astonishing credit hire claims we’ve seen in some time, and highlights just how far credit hire organisations are willing to go to pursue profit at the expense of honest customers.

“This case highlights an important issue as to whether claimants should bear some responsibility for mitigating their losses. In this instance, we paid the excess on a without prejudice basis to enable the claimant to mitigate their loss. This offer was rejected, which ultimately led to the £400,000 hire invoice, plus costs, for which the claimant could now be personally liable.

“Challenging cases where costs have escalated out of all control is the right and responsible thing for us to do. We have a responsibility to our premium paying customers to keep our costs low, which ultimately helps reduce pressure on insurance premiums.”

For more information, please contact John Gibson, Motor Services Director.