This judgment was handed down remotely at 10.00am on 28 March 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
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DISTRICT JUDGE LUMB
District Judge Lumb:
Introduction
- This is a case about credit hire. Credit hire is a service offered to the motoring public who have been involved in a road traffic accident that is believed to be the fault of another motorist. It is a very useful service that allows motorists who need a replacement vehicle to be provided with an alternative one while their own is in for repair or awaiting confirmation that it has been written off.
- There are a number of companies who offer this replacement facility on credit terms. The advantages to the user are of a rapid service with an assurance that, although technically liable in law for the cost of the hire, the user is very unlikely to be called upon to pay themselves as the hire charges are presented to the motor insurers of the culpable other driver. The benefit to the credit hire company is that they can charge, often significantly, enhanced rates for providing the credit service and this has become an extremely lucrative and by and large slick business.
- Lawyers for the credit hire companies bringing subrogated claims in the names of the hirers and lawyers for the other sides insurers are regularly locked in disputes over whether the enhanced credit hire rates and periods of hire should be paid or whether any successful recovery should be at the lower going market rate or "basic hire rate" (BHR). These disputes frequently lead to litigation and trials, mostly in the County Court, throughout the country. They represent a significant proportion of civil cases that are tried in the County Court every week.
- The present case is an illustration of what happens when the carefully drawn business model of the credit hire company and its owners, often, as in this case, the solicitors conducting the litigation on behalf of the Claimant, go awry because the carefully regimented prescribed process is not followed by either the claims handlers or fee earners at the solicitors. Further, in the present case there were certain features that made the case unusual which required adaptation of the standard model claim process. Regrettably, the individuals with conduct appear to have had insufficient understanding of what they were doing and why it was important to be accurate and a need to amend the process accordingly.
The facts of this case and procedural background
- The Claimant in this case, Mr David Wiltshire, was 79 years old at the time of the road traffic accident on 9 May 2023 which is the subject of this claim. The Defendant's insured reversed from a driveway into collision with Mr Wiltshire's Citroen Picasso. Liability was promptly admitted by the Defendant. The claim, brought in Mr Wiltshire's name, is for £50,190.24 comprising hire charges (pleaded in the alternative as damages for loss of use) of £47,925.60, collection and delivery charges of £144 and recovery and storage charges of £2120.64. All heads of loss are in dispute and the Defence puts the Claimant to proof of each of them.
- Proceedings were issued on 6 October 2023. The Particulars of Claim follow a simple precedent template. The Defence contains rather more detail but broadly also follows a standard format putting the Claimant on notice of the documents and evidence that the Defendant wished to see in order to consider settlement of the claim. The Defence was backed up by a Request for Further Information and documentation pursuant to CPR Parts 18 and 31 for which brief replies were supplied.
- The Court file was considered by District Judge Jenkins on 29 January 2024 and he gave what can be regarded as standard Fast Track credit hire directions. These included at;
• 5 (d) that the Claimant shall be debarred from relying upon the fact of impecuniosity for the purposes of determining the appropriate rate and period of hire (my emphasis) unless he served a Reply to the Defence setting out all the facts in support of any assertion that he was impecunious and providing copies of all financial documents for the period of three months prior to the accident and covering the period of hire and;
• 5(e) that each party has permission to rely on a short survey of "spot" hire rates in the Claimant's locality.
Notably, District Judge Jenkins did not give either party permission to rely upon "rebuttal" evidence attacking the other parties "spot" or "basic" hire rates.
- It is not contended in this case by the Claimant that he was impecunious. This is relevant to the assessment of the applicable rate of hire (or alternatively rate of damage for loss of use) and period of hire (or loss of use).
Issues and the evidence at trial
- At the trial on quantum only, the issues which the Claimant had to prove to the civil standard of the balance of probabilities were enforceability of the agreement, rate of hire, period of hire and need to hire. The burden of proof to the same standard fell upon the Defendant on the issue of alleged failure to mitigate loss. In addition, the Claimant bore the burden of proving the recoverability of the delivery and collection and recovery and storage charges.
- The trial bundle running to some 137 pages included the usual documents seen in credit hire claims namely;
i) the pleadings,
ii) the witness statement of Mr Wiltshire dated 26 March 2024,
iii) an engineer's report from JP Morriss dated 31 May 2023,
iv) credit hire and credit storage and recovery agreements dated 13 June 2023,
v) invoices for credit hire dated 25 August 2023 and 21 September 2023,
vi) collection and delivery invoice dated 25 August 2023,
vii) recovery and storage invoices dated 23 June 2023 and 27 June 2023.
viii) in addition, there is a witness statement relied upon by the Defendant of Charlotte Smith dated 21 November 2023 which provides the Defendants basic hire rate evidence.
- There is also a witness statement from Emily Creswell of Winn Solicitors Limited which attempts to provide a rebuttal of the Defendant's basic hire rate evidence. I excluded that statement from evidence. No permission was given by the Court to allow the Claimant to rely upon it. If the statement was to be admissible at all in accordance with the directions then it should have provided counter evidence of the Claimant's own survey of basic hire rates, which it did not.
- The only oral evidence given at trial was by the Claimant, Mr Wiltshire. There was a stark contrast between the account that he gave in his oral evidence and that in the written witness statement prepared for him by solicitors. Although aged 80 by the time of trial he was a very clear witness who was providing an honest recollection of events. The discrepancies between the written and oral evidence could not be explained as confusion of an elderly witness.
- In modern litigation, a written witness statement is supposed to stand as the evidence in chief of that witness. There is a clear duty upon anyone who is preparing a witness statement to ensure that it is accurate and as detailed as circumstances require.
- CPR 32.8 provides that a witness statement must comply with the requirements of the Practice Direction to CPR Part 32. Paragraph 18.1 of the Practice Direction states "a witness statement must, if practicable, be in the intended witnesses own words…".
- During the course of Mr Wiltshire's oral evidence, it became obvious that his witness statement was far from being in his own words. Instead, it followed a template precedent that in the Court's experience is almost always used by Winn solicitors. The effect of this marked inconsistency between the oral and written evidence rendered the reliability of the contents of the witness statement to be highly questionable and where there were material differences I prefer the oral evidence of Mr Wiltshire.
- That credit hire litigation can be characterised as bulk litigation does not excuse an overreliance on a prescribed process of precedent documents including witness statements. There is still an obligation to ensure that any witness statement complies with CPR Part 32 and the Practice Direction thereto. Blind following of a company process is no substitute for understanding these requirements.
- Mr Wiltshire explained that at the time of the accident he was on a family caravan holiday in Tenby, Wales. His car was badly damaged. The police were called to the scene and drove Mr Wiltshire's Citroen back to the caravan site.
- Mr Wiltshire got his daughter to ring the Accident Assist line for his insurers, the AA. It transpired that they then put her through to Winns solicitors and she handed the phone to her father. Mr Wiltshire mistakenly believed that he was talking to his own insurers, the AA. He was sure that the person that he was speaking to did not otherwise identify themselves to him. This may have been because they had already spoken to his daughter.
- When shown paragraphs 6 to 9 inclusive and paragraph 11 of his witness statement, Mr Wiltshire was adamant that these were not his words and not his understanding. Those paragraphs in his witness statement stated as follows;
6. Following the accident, I contacted Winn Solicitors Limited (Winns) on 10 May 2023 to pursue a claim on my behalf for losses as a result of the accident.
7. Winns advised me that they would be able to deal with my claim for vehicle damage, which included assisting me with any additional services I needed including such as credit repair, credit hire and credit recovery and storage.
8. When I contacted Winns I was aware they offered a "one stop shop" and could arrange everything on my behalf with no upfront cost. This was what I wanted as using On Hire meant that I did not have to go to the expense and hassle of trying to obtain multiple quotations from other providers for similar services.
9. I was informed by Winns, both orally and in writing that the directors of Winns are also the directors of On Hire Ltd and that they have a financial interest in the company. I understood this and agreed to the use of the company. I was also told that I could use alternative companies if I preferred. I did not wish to do so and agreed to use the services.
11. I was advised that an engineer would inspect my vehicle and if it was damaged beyond repair or required repairs, On Hire Ltd could provide me with a hire vehicle if I needed one. I was informed that the services would be provided on a credit basis, which meant that I would not have to pay anything upfront. I was advised that I would be liable for the charges, but they would be claimed against the "at fault driver" as part of my claim.
- In his oral evidence, Mr Wiltshire was clear that he believed he was speaking to his own insurers on 10 May 2023 and was making a claim under his own policy. He did not believe that he was instructing solicitors to pursue a claim on his behalf. He said that he did not know what credit hire was let alone credit repair, credit recovery or storage.
- As he did not realise that he was speaking to Winns it is self-evident that he did not select them as a provider of legal and claims management services. The connection to Winns came during the initial telephone call by his daughter to Mr Wiltshire's insurers, the AA, who transferred that call.
- He denied that he was told that Winns directors were also directors of On Hire Ltd. At that stage he had never heard of On Hire Ltd.
- He was clear that he was not offered the opportunity of approaching alternative companies as he had no reason to do so believing that he was dealing with his own insurers. Had he understood that he was going to be potentially liable for credit hire charges of £500 a day and that he was dealing with Winns as opposed to his own insurers he would have had nothing to do with the arrangement. "If I been told that they were not the AA I would have put the phone down and called someone else."
- There is supporting evidence within the bundle that tends to corroborate the oral account given by Mr Wiltshire.
i) Firstly, the credit agreements signed by him were only completed on 13 June 2023 over 6 weeks after the alleged hire was said to have commenced. There is no explanation provided for that delay. This is consistent with his account that at least up to 13 June 2023 he believed that he was being supplied with an alternative vehicle by his own insurers.
ii) Secondly, the only correspondence to Mr Wiltshire's home address immediately after 10 May 2023 was a letter from Winns to Mrs Philomena Wiltshire (misspelt as Philonena Wilkshire) said to be enclosing a Conditional Fee Agreement, hire agreement, repair agreement and recovery and storage agreement together with Winn solicitors client care letter and standard terms and conditions.
Mrs Wiltshire did not provide a witness statement and did not give evidence.
No explanation was forthcoming as to why she was sent this letter and why there is no corresponding letter sent to Mr Wiltshire. One hypothetical explanation, not explored in evidence or submissions, may be that in taking the initial "telephone instructions" the call handler at Winns recorded that it was a woman they were speaking to and assumed this was Mrs Wiltshire when in fact it was the couple's daughter. The Winns process might then have recorded Mrs Wiltshire as "the client".
iii) Thirdly, there is also a letter of claim from Winns to Aviva (believed to be Mr Wiltshire's insurers – possibly because the AA were agents/brokers for Aviva and not in fact his insurers as Mr Wiltshire believed) dated 24 May 2023 which states in the heading that their client is David Wiltshire and includes a sentence "please note our client will be provided with credit hire and credit repair services". The use of the future tense implies that those services had not yet been provided and might perhaps be explained by a recognition by Winns that they had not at that time signed up Mr Wiltshire to the credit agreements. Again, no explanation was forthcoming in the evidence.
- In his oral evidence, Mr Wiltshire explained that so far as he was concerned the only documentation that he signed at the time of collecting the replacement vehicle on 11 May 2023 was in relation to the state or condition of the replacement vehicle. Again, I accept his evidence on this. Given the date of 13 June 2023 on the credit documentation it is clear that he did not sign this on or around 10 May 2023.
- Further details that were provided in Mr Wiltshire's oral evidence that were missing from his witness statement included the fact that he was only provided with one replacement vehicle, a Kia Sportage, and at no time was he provided with a Vauxhall Grandland. He could only assume that the two invoices, one for each vehicle, included in the trial bundle were a mistake. He did not use a Vauxhall for two days and then the Kia for balance of the period.
- He also explained that the replacement vehicle was provided from Milford Haven about 14 miles from the caravan site in Tenby. The provider drove to the campsite and then drove Mr and Mrs Wiltshire back to Milford Haven to complete the documentation. They themselves then had to drive the Kia to the campsite. Mr Wiltshire had not agreed to pay any delivery or collection charges for the Kia and regarded it as quite unfair that the Kia wasn't delivered by the provider in any event but that he had to drive it back to Tenby.
Enforcability of the credit agreements for hire, repair, recovery and storage
- Given that evidence, it is clear that Mr Wiltshire had no liability for delivery or collection charges and the claims for those heads of loss fail.
- Further, upon considering all the evidence, I am not satisfied that the Claimant has discharged the burden of proof as to the enforceability of any of the credit agreements.
- For the reasons which I shall set out below, the reasonable period for needing a replacement vehicle had already come to an end before the agreements were signed on 13 June 2023 and can have no retrospective effect.
- Any agreements that might have been sent were sent to the wrong person, namely Mrs Wiltshire. That mistake is not explained anywhere in the evidence. At best, Mr Wiltshire had entered into an oral agreement for the provision of a replacement vehicle and the evidence falls far short of establishing that he had agreed to hire a vehicle on credit terms or enter into a credit repair agreement or a credit recovery and storage agreement prior to 13 June 2023.
The alternative pleaded claim for loss of use
- Having dismissed the credit claims for hire, recovery and storage and for delivery and collection I shall consider the alternative claim for damages for loss of use of the Citroen Picasso.
Need for a replacement vehicle
- I am satisfied that Mr Wiltshire has demonstrated a clear need in accordance with the relatively low bar test in Giles v Thompson [1994] AC 142 for an alternative vehicle until his own was replaced. Firstly, Mr Wiltshire needed a vehicle to enable he and his wife to drive home from Tenby to Grove in Oxfordshire. Secondly, his wife's car, a Citroen C3, was much smaller and lower down than a car such as his Picasso. The C3 does not have enough legroom for him particularly given that he has had a knee replacement. Although he could just about manage in the C3 on shorter journeys, longer journeys were awkward and uncomfortable. He further explained that during the time he had the replacement vehicle he and his wife had made two long journeys to Birmingham and Essex for funerals which would have been far too uncomfortable for him in the C3. In addition, Mr Wiltshire is a keen golfer and couldn't get his golf clubs and trolley into his wife's C3.
Quantification of the loss of use claim including period
- The Court of Appeal decision in Bee v Jenson [2008] RTR 7 pleaded by the Claimant in the Particulars of Claim is an authority which considered alternative methods of quantifying damages for loss of use of a vehicle. The appropriate method would depend on the particular circumstances of the case.
- Here, as set out above, Mr Wiltshire has justified his need for an alternative vehicle and so allowance of a nominal daily sum would not provide adequate compensation for him.
- Having ruled that the Credit Hire agreement signed on 13 June 2023 is unenforceable, in my judgment the best way to compensate Mr Wiltshire would be to allow the applicable Basic Hire Rate as a starting point.
- I reject the submissions made by Miss Rutherford that the Defendant's BHR evidence is not a reliable guide as it fails to take into account Mr Wiltshire being an elderly gentleman and any excess mileage beyond the normal allowance both of which attracted supplemental charges to the Credit Hire Rate.
- The BHR for this purpose are only intended to provide a rough and ready guide as to the sort of figure to allow rather than a precise calculation. Likewise, in my judgment, there is no need to add a supplement to the BHR for a second (and also elderly) driver, Mrs Wiltshire, for the same reason. There is some support for my approach in cases such as Bent v Highways & Utilities (no2) [2011] EWCA Civ 1384 that the hire rates to be applied do not have to correspond precisely to the exact circumstances of the case and a more general approach as a guide is perfectly acceptable. This principle must be all the more applicable where what is being considered is an award for general damages for loss of use rather than on a strict credit hire or basic hire rate alternative.
- Determining the appropriate period for damages for loss of use is a more difficult exercise. The Defendant paid the cheque to the Claimant for the pre-accident value of his Picasso on 1 August 2023. Normally, it would be reasonable to allow a period of up to 14 days thereafter to find a suitable alternative vehicle to purchase. However, it is not contended that Mr Wiltshire was impecunious and applying the debarring clause in the directions order by the Court he could not contend that he was. In the directions order, it was clear that failure to establish impecuniosity would also be relevant to period of hire, or, as I have found, loss of use.
- The question then is when would it have been reasonable for Mr Wiltshire to have replaced his car applying the presumption that he could afford to do so straight away as he is deemed not to be impecunious?
- The answer always depends on the circumstances of the case. Post accident the Picasso was unroadworthy and unsafe to drive any distance and the police drove it back to the campsite for Mr Wiltshire. That in itself was clear evidence that it was highly unlikely that the car was going to be capable of any economic repair. In the particular circumstances of this case, given the obvious extent of the damage to the Picasso, as subsequently confirmed in the engineer's report that the cost of the repairs at £11,924.84 + VAT being more than twice the pre-accident value of the vehicle of £6,760, the car was always going to be written off. There was no need to wait for a formal engineer's report to confirm this.
- A reasonable man who was deemed to be pecunious and therefore able to start the search for a replacement vehicle straight away should have done so. Realistically, in my judgment, Mr Wiltshire should have been able to find a replacement car within 3 weeks of the accident and I find that to be the reasonable period for his claim for loss of use.
- Looking at the BHR evidence in the statement of Charlotte Smith a Nissan Qashqai hired from Enterprise in Didcot, which is local to the Claimant's home address in Grove, could have been hired on a 7-day rate for 3 weeks for a basic cost of £1,199.97. As I am only using the BHR evidence as a rough and ready guide to appropriate damages for loss of use, I do not consider it necessary to add the chargeable extras such as excess reduction products, third-party excess reimbursement or for delivery and collection.
Conclusion
- For the reasons given above, the claims for credit hire, credit recovery and storage charges and collection and delivery charges all fail. The Claimant is awarded the sum of £1,197 for loss of use of his Citroen Picasso for a period of 3 weeks post-accident by which time he should have replaced his car.
- That the amount awarded was a fraction of the amount claimed was largely due to the unravelling of the claims process adopted by Winn Solicitors Limited and their owned subsidiary credit hire company, On Hire Limited. This was caused by mistakes made by the claims handlers and fee earners alike that largely only became exposed in the oral evidence of the Claimant, Mr Wiltshire.
- A careful review of the evidence by those acting for the Claimant prior to the issue of proceedings and certainly before trial might have led to the trial being avoided altogether and possible settlement of the claim.
- Had the credit documentation been properly completed then the hire claim would have likely succeeded, and the damages awarded much higher.
- Given the position regarding the reasonable period found to be 3 weeks, had the credit hire documentation been in order, the figure at the BHR should have included the potential extra charges referred to in the submission of Miss Rutherford but which were absent from the Defendant's BHR evidence. Her submission that the BHR evidence was inadequate as regards rate may then have succeeded and the credit hire rates preferred. In that event, the hire charges would have equated to approximately £10,936.80 for that 3-week period. The recovery and storage charges and the collection and delivery charges may also then have been recoverable.
- Had it not been so obvious that the Claimant's Picasso was damaged beyond any economical repair and had the Claimant been impecunious, the outcome would most likely have been different. Then it might have been reasonable to have waited for the Engineer to report on 31 May that the vehicle was a total loss, then to await the receipt of the cheque from the Defendant for the pre-accident value on 1 August before a period of say a further 14 days to purchase a replacement car. This would probably have then resulted in the full credit hire claim for £48,872 succeeding.
- Many people unfamiliar with credit hire claims may be surprised at how there could be such a disparity in the value of the claim from the amount pleaded of £50,190.24 and the amount awarded of £1,197 due to a failure to follow a process in a business model, particularly when the pre-accident value of the written off car was less than £7,000. They may also question why the Courts have not intervened in this industry which, given the figures involved paid out by the insurers of the culpable motorists, must surely have an impact on rising motor insurance premiums. The answer to that may be that the Senior Courts have exhausted the arguments at Common Law and only new legislation by Parliament could alter the position. Whether that will happen remains to be seen.
