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Published 2 February 2015
Happy New Year and welcome to the latest edition of The Hire Way; '2014 in Review'.
2014 was an eventful year in the credit hire arena. There was a wealth of case law and changing Civil Procedure Rules, but we also saw emerging credit hire fraud operations and a host of evolving adverse behaviours. And, of course, we shouldn't forget the CMA investigation….
Our mission in this edition of The Hire Way is not only to look back over 2014, but also to consider what we learned, and how this can help our clients develop and evolve their own best practices to ensure they are effectively dealing with their ongoing challenges. We hope that by sharing our thoughts and experiences with you we can work together to ensure we are 'match fit' to face what is sure to be an even more eventful 2015.
In the above matter it was held that, in accordance with common law principles, the Claimant was entitled only to the lower of the loss of profit he suffered by reason of his taxi being off the road, and the daily rate of hire of the replacement vehicle.
However, the Claimant's vehicle was not just an income-earning asset, but was used for at least 25 per cent of the time for social purposes. As a general principle, provided that a Claimant could establish a need for a vehicle, he was entitled to hire a replacement vehicle for reasons other than just preserving or maintaining an income, Giles v Thompson  1 A.C. 142 applied. In addition to loss of profit, the Claimant was therefore entitled to compensation for loss of use of the vehicle, which was agreed at £15 per day.
It was then necessary to determine the reasonable period of hire. The Claimant had had access to funds in order to bring the hire to an end earlier than he did. The coincidence between the fact that he was able to obtain £2,000 from his friends at the point when the vehicle went off hire strongly suggested that the money was obtained specifically because the vehicle had gone off hire, rather than because that was the first occasion that the money was available. In allowing the hire to continue until March, the Claimant had failed to mitigate his loss. A reasonable period before the vehicle could have come off hire was a month after the date of his vehicle being written off. The Claimant would be allowed £67.20 per day from December 1 until January 2011.
Although a really helpful Judgment, this does need to be treated with caution.
The Judgment is very case specific. Ultimately, if the Claimant had produced evidence to prove he could not have afforded not to work (i.e. he could not have paid his mortgage) this case is likely to have had a different outcome.
Similarly, if he proved he had contracts with certain customers that he may have lost had he not worked, it is likely the claim would have succeeded.
The appeal Judgment of Stevens v Equity Limited  EWCH 689 (QB) was handed down by Bristol High Court. The Judgment contained some useful guidance in relation to rates and how they should be assessed. Click here to read more.
DAC Beachcroft was successful at the Court of Appeal.
In Zurich Insurance Plc v Umerji the Court of Appeal found that it was unacceptable in the eyes of the law for motorists to enter into credit hire arrangements for unnecessarily long periods of time. Click here to read more.
A credit hire fraud raid saw 17 people arrested across Essex, Hertfordshire, Lancashire, London, Northamptonshire, Nottinghamshire, Surrey and West Yorkshire, following months of investigation by the Insurance Fraud Enforcement Department.
DAC Beachcroft appeared on Radio 5 Live discussing the issue of credit hire fraud. Other contributors included Insurance Fraud Enforcement (IFED) and Louise Ellman MP.
The CMA took over from the Competition Commission and the Office of Fair Trading.
DAC Beachcroft estimated that credit hire fraud (not attached to personal injury claims) is worth approximately £75 million per year, but as such fraud often involves an element of wider-ranging scams, the real cost was likely to be higher.
Data sharing continued to be a hot topic across the industry.
The CMA released its proposal on 12 June 2014. There were concerns within the industry of missed opportunities especially around the lack of a referral fee ban and the decision not to address subrogated repair costs.
Technology in credit hire was considered within the press.
DAC Beachcroft hosted three workshops to update insurers on recent changes to the credit hire industry and to help ensure practical claims strategies match current legal requirements. The workshops considered the future of credit hire with particular emphasis on CMA, BHR, taxis, ABS's, credit hire fraud, comprehensive insurance and enforceability.
The 73rd Update to the Civil Procedure Rules came into force on 5 June 2014.
Part 3 The Court’s Case Management Powers
Rule 3.8 was amended to provide that parties may agree, in writing, to an extension of time, up to a maximum of 28 days without an application to the court. The parties may not make such an agreement, if the court has ordered that such an agreement cannot be made, or if any extension of time agreed puts the hearing date at risk. Amendments are also made to Practice Directions 28 and 29.
On 13 June 2014, the Consumer Contracts (Information, cancellation and Additional charges) Regulations 2013 came into force. Therefore, any credit hire agreement entered into after 13 June 2014 will not require a Cancellation Notice (if contract provides for a specific period of performance- S28 (1) (h). Click here to read more.
Judgment in Akhtar v Boland  EWCA Civ 872 is handed down. This case is considered in detail within our review of 2014 appeal cases.
Bewicke-Copley v Ibeh in the County Court sitting at Oxford
Here some heads of loss were settled in Stage 2, then the Claimant removed the matter from the portal and issued Part 7. However he claimed for all the heads of loss again, including the agreed ones, which included the general damages.
District Judge Vincent held that the heads of loss which were accepted in the portal were binding agreements. As that included personal injury the remaining heads of loss continue on the small claims track.
Although not binding, the Judgment is persuasive.
Martin Andrews, director general of the Credit Hire Organisation, clarified that the General Terms of Agreement technical committee had not selected a supplier for an electronic portal.
DAC Beachcroft's 6th annual credit hire conference took place in London to coincide with Post Magazine's Fraud Awards.
The date for our 2015 conference will be released shortly.
It was reported in the press that the Association of British Insurers (ABI) had dismissed CHO claims to MPs that IFED acts as a 'private police force'. Click here to read the article in Post Magazine.
It's reported that the Association of British Insurers has said it would be unlikely to sign up to the Credit Hire Organisation consumer charter due to practical and legal concerns about the document.
The Insolvency Service was believed to be conducting an investigation into the behaviour and transactions of the directors of Drive Assist, according to the company’s liquidator Zolfo Cooper.
Click on any of the below cases to read more...
Our January 2014 newsletter featured a spotlight on what was then the Competition Commission review. Back then, the long awaited provisional findings, remedies and report had just been released, giving the insurance industry it's first insight into the potential 'brighter' future of credit hire.
Click here to read more...
2014 has seen a wealth of cases concerning credit hire proceeding in the Appeal Courts.
As well as the appeals discussed below, we at DAC Beachcroft have numerous other matters which have already proceeded to appeal with Judgments awaited, or with Appeals listed for the New Year. We will provide updates and outcomes in future alerts and editions of the The Hire Way
It was anticipated after the Court of Appeal's second decision in Bent, the issue of how the Courts interpret basic hire rate evidence had been resolved. However recent judicial decisions have thrown the spotlight back on this contentious issue with an array of differing interpretations of rates evidence.
How different Courts and Judges deal with rates appears to be more and more unpredictable.
Please click here to read more......
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