Taxi hire claim limited to loss of profits – Christopher Boxall secures 96% saving on credit hire charges for the Defendant in Multi Track claimPark Square Barristers
Kavanagh v Hunt, Liverpool County Court, 19th May 2023
The Claimant was a taxi driver who pursued claims for credit hire charges of £40,200 and storage charges of £5,292 following a non-fault road traffic accident.
The damaged vehicle was provided to the Claimant under a taxi lease agreement with a garage based in Bootle, at a cost of £180 per week. The agreement provided that where the vehicle was damaged in an accident, the Claimant was responsible for all repairs, regardless of fault.
The Claimant asserted impecuniosity and claimed to be unable to meet repair costs himself.
Following the accident, the same garage provided a credit hire taxi to the Claimant at a cost of £300 per day. The damaged vehicle was also stored by the garage for 147 days at a cost of £30 per day – charged to the Claimant notwithstanding that the garage owned the vehicle.
The garage also repaired the damaged vehicle at a cost of £2,743.72 only after the Defendant made an interim payment towards the cost of repairs in order to curtail the hire period, which ran to some 134 days.
In claims for loss of use of a profit-earning chattel such as a taxi, recoverable damages are usually limited to loss of profit where hire charges significantly exceed that profit. In Hussain v EUI Limited  EWHC 2647 (QB), Mr Justice Pepperall acknowledged three exceptions to this general rule, where:
(i) Future trading would be compromised;
(ii) the vehicle was also needed for private and family use;
(iii) the Claimant was impecunious / ie they could not afford not to work.
The Claimant relied upon exceptions (ii) and (iii) above at trial which was heard by Recorder Braslavsky KC at Liverpool County Court on 19th May 2023.
On cross-examination, the Claimant accepted that prior to resuming work as a taxi driver a few months before the accident, he had not owned a vehicle for over 16 months. He also accepted that but for returning to work as a taxi driver, he would not have leased a vehicle at all.
As to impecuniosity, forensic examination of Claimant’s tax return indicated discrepancies between reported turnover and income visible from the bank statements disclosed. Further, it was argued that the Claimant was in breach of Practice Direction 16 in failing to state all relevant facts in respect of his pleading of impecuniosity.
The Judge was persuaded that the Claimant had failed to prove impecuniosity or any need for a vehicle for private use. Accordingly, the Court assessed damages by reference to loss of profit – awarding the Claimant £1500 as against hire charges of £40,200 (equating to less than 4% of the hire charges claimed).
The Judge also dismissed the claim for storage charges in its entirety in circumstances where the garage were storing their own vehicle at their own premises, and the Judge was satisfied that there was sufficient space for the damaged vehicle to be stored on the Claimant’s driveway in any event.
The Claimant also failed to beat a well-pitched Part 36 offer made by the Defendant more than 5 months prior to trial. Costs are yet to be assessed or agreed but the Defendant stands to recoup a significant proportion of their costs of defending the claim from expiry of the offer.
Chris was instructed by Annmarie Kirkbride of OCL Solicitors.
Chris has extensive experience acting for both Claimants and Defendants in high-value credit hire matters and provides bespoke training on this topic.
If you would like to book Christopher, please contact one of his clerks: