Covid-19 and credit hire: ‘Need’ or greed?


A guest post by Gary Herring, a partner at Keoghs

Herring: Did you really need that supercar?

The impact of the first lockdown on the credit hire market was an immediate and profound one. Whilst the majority on both sides worked hard to maintain a co-operative approach, amongst the minority there is no doubt that the last 12 months have starkly amplified some of the behaviours that embody the worst excesses of the industry.

It should go without saying that credit hire is, at its core, a beneficial service which fulfils an essential function in keeping accident victims mobile.

That is more so against the backdrop of Covid-19, where the need for mobility will often have been greater than ever.

As such, defendants would be wise to exercise caution in terms of any temptation to challenge the need to hire based solely on a tally of the number of miles travelled during a hire period. After all, ‘use’ and ‘need’ are often different things.

But it should be equally as obvious that the provision of a credit hire vehicle should always be predicated on a proper assessment that there is a genuine need to hire.

That is also surely even more important against the backdrop of lockdowns, during which it is obvious that there will often be circumstances where that need will no longer exist – perhaps in relation to multi-vehicle households, or for some commercial vehicles or taxis, for example.

There is no greater illustration of this than the approach of certain operators to the provision of supercars and high-end prestige vehicles during the lockdowns.

A considerable number of claims have been seen where sums well in excess of £100,000 have been sought for prestige hires at eye-watering daily rates – over £1,700 per day in some instances – incurred even within the midst of the most stringent restrictions of the first lockdown.

Such claims have arisen in circumstances where the vehicle is one of a number of vehicles within a household and where the hirer is working from home.

There is never any evidence of any specific enquires on the part of the operator as to the hirer’s need for a certain type of vehicle, or whether a lesser vehicle would be sufficient to meet any need for mobility, in the circumstances where the restrictions meant that business use was eliminated entirely and only very limited essential journeys could be made.

It is inconceivable that any reasonable person spending their own money would choose to incur daily rates for a temporary hire vehicle at multiples of most monthly mortgage payments, only for that vehicle to sit on a drive or at best, be taken to the supermarket once a week.

The reality is that the hirer will usually have very little to do with any of this. Invariably they think they are being provided with a vehicle as an insurance entitlement and will have little awareness of the sums being sought in their name; that is, until they are dragged along to court in an attempt to justify a decision retrospectively they had no part in making in the first place.

All this would suggest that, for some operators, the provision of high-end vehicles throughout the lockdown was maintained not based on the needs of the accident victim whose interests they purport to represent, but as a matter of policy.

It is noteworthy that the operators from whom this behaviour has emanated are those who own their own prestige fleet, where it might be said that there is little to lose by keeping vehicles on the road regardless and ‘playing percentages’ in terms of recovery.

Inevitably, credit hire operators are likely to find that insurers robustly challenge ‘supercar’ claims brought in the circumstances described. Aside from the obvious ethical issues, it is difficult to see the legal justification. The stock position being adopted thus far appears to be simply that the hire of a like for like supercar is some absolute and inalienable ‘entitlement’, regardless of need or use.

Whilst the starting point is certainly restitutio in integrum, such an argument depends on it also being the end of the matter, whereas plainly it is not. It ought to be trite law that the principle is always qualified by the duty to take reasonable steps to mitigate the loss.

Moreover, it would appear clear from the dicta in Clark v Ardington [2002] EWCA Civ 510 (paragraph 133) and Pattni v First Leicester Buses [2011] EWCA Civ 1384 (paragraph 32(3)) respectively, that need for a like-for-like vehicle is something which a claimant must establish, or at very least, that it is open for the defendant to be able to show that the car hired was bigger or better than was reasonable in the circumstances.




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