Christopher Rafferty explores possible changes to Credit Hire Claims during COVID 19

We find ourselves in unprecedented times, daily life as we know it brought to a standstill. Professionally we are all looking at work in a different light, attempting to predict the impact Covid-19 will have on our respective areas of practice.

One of the areas likely to be overlooked at present is credit hire litigation. However, it is nonetheless an area which is likely to experience significant change as a result of our new world.

CPR Update

Amendments to the Civil Procedure Rules remain unbowed by a mere virus. As of today (06 April 2020) the 113th update brings into force a change to PD 16 (statements of case) relating specifically to the hire or replacement of a motor vehicle following a road traffic accident:

6.3 Where the claim includes the cost of hire of a replacement motor vehicle following a road traffic accident, the claimant must state in the particulars of claim—

(1) the need for the replacement vehicle at the relevant time;

(2) the period of hire claimed (providing the start and end of the period);

(3) the rate of hire claimed;

(4) the reasonableness of the period and rate of hire; and

(5) impecuniosity (if the claim relates to credit hire).

6.4 In paragraph 6.3—

(1) “relevant time” means at the start of the hire and throughout the period of hire;

(2) the obligation to state the matters there set out includes an obligation to state relevant facts.”.

For some time, court centres have implemented bespoke directions intended to narrow and clarify the issues surrounding credit hire litigation, which have required Claimants to set out some or all of these matters with particularity. In many cases the directions set down have gone so far as to require Claimants to file and serve a previously optional Reply to Defence setting out matters relating to impecuniosity where relied upon.

This amendment brings together these sporadic attempts at uniformity. Claimants should be particularly conscious that sufficient information is included within their statements of case so as not to fall foul of PD 16. Defendants ought to keep an eye on whether Claimants have so complied, and carefully consider whether the extent of the non-compliance warrants a timely application to strike out pleadings under r3.4(2)(c).

Impact

Credit hire organisations will inevitably face their own difficulties during this period of lockdown. In a world where going to the shop is now fraught with its own complications, providing a vehicle to a hirer will present its own logistical problems. Compounded with the significantly reduced traffic on the roads (and, one presumes, a consequently lower number of road traffic accidents) it is likely that there will be a significant reduction in the number of vehicles hired.

However, for those vehicles which are hired during this period of lockdown, and for those vehicles already hired prior to these events, it may be that the period of hire in individual instances is increased. Inspection and repair of vehicles will be all the more difficult to complete, for the reasons set out above, leading to an exponential increase in the value of claims commenced once normality returns. Remote or desktop inspections should be considered a priority to limit the period of hire; experience suggests that such change will be slow to appear.

One way, absent in so many cases, in which period could be limited by Defendant insurers is to prioritise the use of intervention offers per Copley -v- Lawn [2009] EWCA Civ 580. Where repair facilities are sufficiently robust to continue during this period of upheaval, replacement vehicles should be offered as a matter of priority and repairs, even if completed on a temporary basis, should be undertaken. Those intervening with offers should always be mindful of the strict requirements of form and content set out in Copley to avoid the argument falling short at trial.

Careful consideration also needs to be given to the fundamental principles of need. Traditionally a low threshold (though not self-proving, per Giles -v- Thompson [1993] UKHL 2) it was always intended to be considered on a case-by-case basis. We are all now, quite properly, urged not to leave the house save for essential travel; Claimants must be prepared to demonstrate that they reasonably required the use of a replacement vehicle where opportunity for travel has become so severely restricted.

Future

Once we have returned to normality, and we surely will, there will likely be an influx of credit hire claims before the courts – due to trials already listed having been adjourned and a number of new high-value claims being initiated due to longer periods of hire. Claimant and Defendant representatives need to ensure that they are ready to deal with cases efficiently, as the court will have little time or patience for badly prepared cases given the number of other matters it will be dealing with.

It is likely that these hearings will return to court remotely before attendance in person is resumed. All barristers at PSQB are fully prepared and up-to-date with the remote technology required to conduct any and all hearings before the court.

Stay safe everyone.

Christopher Rafferty