The cost of hiring a car under a credit hire scheme was recoverable in full as damages by the claimant whose car was damaged in a road traffic accident because his lack of means made him unable to hire a car at ordinary rates from an ordinary car hire company.Appeal from the judgment of the Court of Appeal in which judgment was given in a number of test cases concerning the provision by credit hire companies of car hire and repair services to the innocent victims of road accidents. In 1999 the car owned by the respondent ('L') was damaged when the appellant ('O') drove her car into it. L took his car to a garage for repair. He was unemployed and in poor health and could not afford to hire a replacement car while his was being repaired. L then entered into an agreement with a credit hire company ('H') which would provide him with a hire car on the basis that the cost would be recovered from O or insurers. In Dimond v Lovell (2002) 1 AC 384 the House of Lords held that the damages recoverable for car hire were limited to the "spot rate" quoted by hirers and that the charges of credit hire companies, if higher, could not be recovered from the other side's insurers. In L's case the judge at first instance held that L's position was different because he had no alternative but to use the services of a credit hire company and for that reason H's car hire charge was recoverable in full. The Court of Appeal upheld that decision on the basis that the defendant who damaged another's car had to take the victim as he found him and that there were no steps which L could have taken to mitigate his loss since there was no cheaper way for L to obtain a replacement car. O's insurers appealed.HELD: (1) The principle in Dimond (supra) was that if a motorist obtained additional benefits from the credit hire company the cost of those was not recoverable as damages because the extra cost was not the cost of mitigating the loss of use of the damaged car. The position of the impecunious motorist was not directly in issue in that case. Dimond v Lovell was distinguishable. The principle in it was subject to modification where, if he was to minimise his loss, the claimant had no choice but to accept those additional benefits. O's insurers failed to show that the extra cost should be deducted from L's damages. The criterion to be applied was whether it would have been open to L to hire a car at ordinary rates from an ordinary hire company. (2) (Per Lord Scott and Lord Walker dissenting) Although L's impecuniosity was a point of factual distinction from Dimond v Lovell it would be wrong to construct such an exception since that would be inconsistent with the principle in Dimond and conceptually imprecise. (3) The observations in Liesbosch Dredger (Owners of) v Owners of SS Edison (1933) AC 449 that a claimant's lack of means should not be taken into account when assessing his loss should no longer be followed.Appeal dismissed.

[2003] UKHL 64

0 comments… add one

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Skip to toolbar