The Court of Appeal casts light and some shade on the use of the RTA Protocol

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The Court of Appeal casts light and some shade on the use of the RTA Protocol

Published 20 September 2022

On 16 September 2022 the Court of Appeal handed down its decision in the joined appeals of London Borough of Islington v Bourous and Davis v Yousaf [2022] EWCA Civ 1242. The decision casts light, and some shade, on the use of the RTA Protocol. The clarification provided that the commentary in the White Book on Phillips is wrong is very useful to those engaged in Stage 3 hearings.

DAC Beachcroft Claims Ltd represented the appellant in the matter of Davis v Yousaf throughout the litigation process. Jamie Carpenter KC of Hailsham Chambers and David Fardy of 8DB, DAC Beachcroft’s advocacy service, represented the appellant at the Court of Appeal.


Since its introduction, the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (“the RTA Protocol”) has caused issues for those defending claims for credit hire.

As the RTA Protocol excludes vehicle-related damages from the assessment of the total value of the claim, it is not uncommon for sums for hire significantly over the fast track limit of £25,000 to be included in the process. Due to the streamlined process, coupled with short periods to respond with evidence in Stage 2, the RTA Protocol has regularly resulted in claims supported by minimal evidence and responses from insurers lacking in detail. Part 7 would often be a more appropriate forum for these disputes.

When it comes to Stage 3 proceedings issued under the PD 8B process, post - Phillips v Willis [2016] EWCA Civ 401 it has been ever more difficult for defendants to challenge credit hire claims by dropping them into Part 7 where the usual standard of evidence applies. This is because the courts have regularly adopted the commentary on Phillips in the White Book, which stated that only ‘rare and exceptional’ cases should be dropped from the PD 8B process.

In the present cases

Mr Yousaf and Mr Bourous were taxi drivers involved in accidents that damaged their taxis and caused them whiplash type injuries. Both were placed into credit hire vehicles whilst their vehicles were off the road and made claims through the MOJ portal under the RTA Protocol process.

Mr Yousaf provided a witness statement that set out a simple assertion of impecuniosity, not backed up with any financial disclosure. At Stage 2 the defendant insurer put the claimant to proof over the claim for hire (this was pre-Hussain v EUI Ltd [2019] EWHC 2647 (QB)) and requested financial disclosure. On appeal it was found that the plea of impecuniosity in the witness statement was sufficient to find on the third exception to the rule in Hussain.

In Mr Bourous’ claim, the Hussain argument was not taken at Stage 2; however the argument was considered at the Stage 3 hearing and the claimant’s claim was dismissed. At the first appeal, this was overturned due to the issue not having been raised at Stage 2 for the same reasons as Mulholland v Hughes, albeit independently of that decision.

The Decision on the 2nd Appeal

The Court dismissed both appeals. In doing so, the Court held that wider points of importance were not in fact at play. Rather, the appeals failed because the appellants had not taken the appropriate steps within the procedural framework prescribed by the RTA Protocol to bring the issues on appeal to the court’s determination at first instance.

In Yousaf v Davis, the appellant failed because the court was satisfied that the respondent had proven his impecuniosity by his witness statement. Investigation of the issue of impecuniosity was not feasible in the limited time provided for a Stage 3 hearing. Had the appellant wanted to challenge the adequacy of that evidence, then they ought to have applied at an appropriate time for the claim to be transferred to Part 7. The alternate submission that the court ought to have transferred the claim to Part 7 of its own motion was not a permissible ground of appeal, having never been raised with the judge at first instance.

In London Borough of Islington v Bourous, the appellant failed because they had not sought to argue at Stage 2 of the RTA Protocol that the appropriate measure of loss was loss of profits per Hussain v EUI. The alternate submission that the court should have transferred the claim to Part 7 was never a ground of appeal – and so also failed.

The court stated within their judgment, that when it comes to the issue of transfer, the White Book commentary that only ‘rare and exceptional’ cases should be dropped to Part 7 is ‘is not an accurate statement either of the actual decision in Phillips v Willis, or of its implications.’

What this means in practice

This decision brings the benefit of clarity in how claims will be determined at a Stage 3 hearing where there is some evidence of impecuniosity.

Claimants will not be required to provide financial disclosure to evidence a plea of impecuniosity. A simple witness statement will suffice for proving impecuniosity in the RTA Protocol.

Importantly, however, defendants can now drop the matter out of Part 8 at the appropriate time, where there is a desire to challenge a plea of impecuniosity.

Essentially, the court is putting the onus on insurers to decide, given the size of the credit hire claim, whether the game (of challenging the claim) is worth the risk (of increased costs in Part 7). Of course, only the claimant knows whether they could actually prove impecuniosity.

We can expect an increase in the use of witness statements being used to assert a simple plea of impecuniosity at Stage 2. However, the Court’s decision leaves open the possibility that in the absence of any evidence of impecuniosity, the Claimant’s claim may yet fail. What remains to be seen is how scant the Claimant’s evidence must be for the claim to be accepted.

Defendants can now challenge impecuniosity by dropping the claim into Part 7 where there is a proportionate challenge to be made. However, any issue they want to raise with the claim will have to be raised promptly in stage 2.

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


Ieuan Poole

Ieuan Poole


+44 (0) 7515 082 803

Emma Fuller

Emma Fuller


+44 (0) 163 365 7891

Joanna Folan

Joanna Folan

London - Walbrook

+44 (0)20 7894 6350

David Fardy

David Fardy


+44 (0)117 918 2355

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