6 July 2017Print This Post

Rule committee warns lawyers they risk “a solution being imposed” on credit hire cases

Credit hire: war of attrition

The Civil Procedure Rule Committee (CPRC) has warned lawyers involved in the “highly contentious area” of credit hire litigation that if they fail to agree a new model order for directions, they risk “a solution being imposed”.

Meanwhile, Mr Justice Turner accused insurers and credit hire companies of “fighting a forensic war of attrition” in a High Court ruling last month.

Launching a consultation on a new model order, the CPRC said the directions were “designed to encourage the proportionate and efficient resolution” of litigation and “must not be used as tactical staging posts in the action”.

The committee said it was “likely to be particularly attracted to wording reached through consensus” and “special pleading” by either side was “unlikely to be well received”.

The CPRC went on: “If there are remaining points of principle on which consultees are unable to agree, then the CPRC invites the submission of a short, agreed summary detailing the respective positions, following which it will liaise with the judiciary before publishing the final form of model order.

“Consultees are urged to confer constructively to try to achieve a consensus or risk a solution being imposed.”

The CPRC said its sub-committee on model orders, chaired by His Honour Judge McKenna, reviewed the model order and standard directions, after it was “highlighted that the existing draft might be a cause of avoidable contested directions hearings”.

The committee said credit hire remained a “highly contentious area of litigation” and it was determined to ensure that revised directions did not add to this problem.

“There appear to be relatively simple steps that need to be negotiated in order to narrow issues and present the judge with the necessary evidence on which to make a determination, subject to oral evidence if required, in the usual way.”

Consultees were advised to “try to achieve a consensus or risk a solution being imposed”. The consultation deadline is 1 August 2017.

The rule committee’s tough language follows comments by Mr Justice Turner, introducing a High Court ruling on credit hire last month.

“For a quarter of a century, insurance companies and credit hire organisations have been fighting a forensic war of attrition over an ever-broadening front. This appeal marks the most recent skirmish. It is not likely to be the last.”

Turner J was ruling in Select Car Rentals v Esure [2017] EWHC 1434 (QB) , a case involving a costs order obtained against a credit hire company by an insurer.

He said Recorder Grundy, who heard the case at Liverpool County Court, had concluded that “the claimants had not proved even that they had been involved in the alleged accident at all”.

Turner J, sitting at the High Court in Liverpool, said one of the more “striking features” of the case was that one of the heads of claim was for over £23,400 in payments “alleged to be due” under a credit hire agreement with Select Car Rentals (North West) Limited.

Given that the unsuccessful claimants were protected by qualified one-way costs shifting (QOCS), and “may well have been impecunious in any event”, Turner J said Esure “turned their guns” on Select and obtained a non-party costs order against the company for 60% of their costs in defending the claims.

Turner J concluded that the party making the claim for costs against the credit hire organisation “does not have to prove that the actual agreement was a profitable one” since, however good or bad the original deal, it was “to the financial benefit of the credit hire organisation to recover the monies due under the hire agreement”.

The judge held that what “modest weight” the credit hire company’s objections might have was “decisively counterbalanced” by the other features of the case.

Dismissing Select’s appeal, Turner J ruled that CPR 44.16 did not introduce a “bespoke and distinct” discretion for QOCS cases involving non-parties and the wording of the rule was “entirely consistent” with recent case law.

He added that there was “no room” for the argument that adverse costs orders could only be made where the involvement of credit hire companies in a case was “exceptional”.

It all comes in the wake of the jailing of seven former employees of Autofocus, the disgraced provider of hire rate evidence to solicitors in road traffic accident cases, who were found guilty of perjury after an eight-week trial.

Mr Justice Supperstone said: “Autofocus was involved in the systematic, endemic fabrication of evidence in which the defendants… knowingly and actively participated throughout.”

By Nick Hilborne

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