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Credit hire - Costs secured against CHO

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By Daniel Miller


Published 22 March 2023


Ziaullah & Rapid Vehicle Management Ltd v Zurich Insurance

Judgment was handed down at an application hearing on 08 February 2023 by DDJ Lightman in the County Court at Central London in respect of the defendant's costs which the Judge ordered the CHO to pay in full.

The Judge found that the CHO was providing instructions for the claim instead of the actual claimant and that (a) the costs won at the Trial, and (b) the costs of the application(s) should be paid by them.

Background and issues

The application was made on behalf of the defendant following the successful defence of a Taxi Credit Hire claim brought by the claimant. 

At the trial, the claimant did not attend. No witness statement’s had been filed and the List of Documents had been signed by the claimant's Solicitor who confirmed that they had instructions to sign the same from the CHO under CPR 31.10(7), CPR 31.10(9), CPR 31PD 4.4 and 4.7, and CPR PD22 3.6A

The claimant's claim was struck out for failing to file a witness statement and pay the hearing fee. Also at the time, the claimant's Solicitor made an application to come of the record as acting for the claimant  which was successful. 

The defendant was  awarded costs in their favour.

Given that the CHO had instructed the Solicitor to sign the List of Documents we asked that the CHO be added to proceedings to allow us to seek a costs order from them instead of the claimant. 

This was granted at the Trial. 

A second application for a Third Party Costs Order was made against the CHO after the Trial.

The Judge’s findings

  • That the CHO was the ‘real party’ to the litigation as they are a credit hire company which funded and/or substantially controlled the claim and, in any event, benefited from any resulting litigation and/or judgment for the claimant.
  • Further evidence that the CHO was in control of the litigation can be found on the List of Documents.
  • The CHO were added as a party to proceedings pursuant to CPR 46.2 for the purposes of costs only.
  • As result, the CHO was ordered to pay costs to the defendant of £14,084.96 within 14 days.

Learning points

The outcome of this case is a stark reminder to Credit Hire Organisations that if they themselves drive the litigation either with or without a claimant onboard then the Courts are happy to allow defendants to seek their costs directly from them.

For more information or advice, please contact one of our experts in our Vehicle Hire and Damage Team.