Keoghs acted for the defendants in a flurry of recent county court decisions, in which claims for credit hire charges by claimants who had access to a fleet of vehicles, were dismissed for the lack of a need to hire. The decisions confirm that the principles laid down by Keoghs’ CoA case, Singh v Yaqubi, and Beechwood Birmingham v Hoyer, are being readily applied by county courts in a variety of scenarios. This is the basis upon which Keoghs’ fleet claimant strategy is founded.
The claimant, a large health care trust, hired a vehicle on credit hire terms from a well-known credit hire organisation (CHO) to replace an employee’s vehicle that had been damaged in an accident with our client’s insured.
In the face of Keoghs' challenge as to the need to hire, the claimant’s solicitors asserted throughout that the claimant did not own a ‘fleet’ of vehicles, but that all its vehicles were leased to specific employees under a salary exchange scheme. As a result, it was alleged that the claimant did not have any ‘spare’ vehicles it could have used as an alternative to hiring on a credit basis.
Following a successful application for a court order which obliged the claimant to provide full disclosure of all vehicles in its possession, along with details of their utilisation, the claimant provided a spreadsheet containing details of almost 12,000 vehicles. Of these 12,000 vehicles, nearly 150 were unallocated and listed as, “pool cars”; casting considerable doubt on the previous assertions made by the claimant’s solicitors.
After referring to Giles v Thompson and noting that there was no evidence as to need from the driver of the vehicle, the Judge stated that: “Whilst I accept that the burden of proving need is not a high one to infer, I find in this case that the claimant doesn’t even get off the ground in that respect.” The claim was dismissed.
The claimant, a multi-national facilities management and construction services company, sought charges for a vehicle hired on a credit hire basis to replace a vehicle damaged in an accident involving one of its employees.
The claimant owned a fleet of some 8,000 vehicles. Nonetheless, it maintained that it needed to hire, because:
(a) the company was contractually bound to provide its employees with the unrestricted use of a vehicle, for social, domestic and pleasure purposes as well as business; and
(b) that it was not practical or logistically possible to divert fleet vehicles away from other uses to provide as replacements for vehicles damaged in accidents.
Need was robustly challenged in line with Keoghs' fleet claimant strategy and the relationship between the claimant and the hire company was closely scrutinised. In particular, it was established that the claimant had outsourced both fault and non-fault accident management to the same company. Furthermore, they had no system in place to check the availability or otherwise of any fleet vehicles.
In dismissing the claim, DDJ Sharpe said: “I find similarities in this case with Singh v Yaqubi. I find that this was a system of convenience which did not pay due regard for the person required to pay for it at the end of the day, that being the insurers. The evidence before me does not establish need for a replacement vehicle. In that regard the claim is dismissed.”
The claimant was a taxi driver employed by a taxi company BL Taxis. The taxi was damaged in an accident with our client’s insured and the claimant hired a replacement under a credit hire agreement with a well-known CHO. A claim was brought for the charges incurred of over £10,000.
Upon examination of the documentation, it was noted that both the claimant’s vehicle and the hire vehicle were Public Carriage Office licensed in the same name: ‘Mr S.’ Further enquiries were undertaken which revealed that Mr S was the director of BL taxis, and that he was also the registered keeper of both the claimant’s vehicle and the hire vehicle. Further, Mr S was listed as a director of a local repairing garage.
The claimant’s solicitors accepted our evidence that Mr S was the keeper of both vehicles. However, they also asserted that:
(a) they had no knowledge of Mr S, and
(b) the hire vehicle was validly cross hired and that the claimant was contractually liable to the CHO for the sums claimed.
Keoghs firmly resisted the claim on the following grounds:
(a) There was no conceivable reason for the involvement of the CHO other than to add a layer of unnecessary profit;
(b) There was no need to hire. BL Taxis absorbed any loss by replacing the damaged vehicle with a fleet vehicle;
(c) Even if hire charges were recoverable, following Abdi v Fletcher the claimant could only recover the cross hire rate charged by BL Taxis to the CHO.
The claim was emphatically dismissed. District Judge Bullock said: ”Mitigation is the process whereby the injured party attempts by some course of action to reduce the consequential loss he has suffered or will suffer if nothing is done. [The claimant] made no attempt whatsoever to mitigate his loss...
“On his own evidence he made no attempt to go into normal hire with Mr S. The highest this claim could have been was the cross-hire rate, but I have been given no evidence of this rate...This claim does not ring right at all and must fail, in my view.”
Keoghs' Comment
These decisions provide a welcome indication that the recent emphasis on courts placing close scrutiny on the validity of credit hire claims, as encouraged by the CoA in the Keoghs’ cases of Singh v Yaqubi and Opoku v Tintas, is also being applied by county courts to lesser claims. They also serve as a useful reminder to claimants and CHOs that a fundamental prerequisite for the provision of a credit hire vehicle must be a sound assessment of the claimant’s need to hire; and not simply be a matter of policy or convenience.
We continue to robustly challenge claims where the hire vetting process is found to be lacking, utilising a strategic approach and working with clients to change CHO behaviours and drive down spend. It is imperative that a coherent pre and post litigation strategy exists between clients and Keoghs in order to ensure successful outcomes.
Gary Herring
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