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Clark v Ardington
Clark V Ardington (2002) - LJ Aldous (House of Lords)
Paragraph 147 - "the fundamental principle is that a person whose car has been damaged is entitled to compensation for the loss caused. In a case where such loss includes loss of use and he establishes a need for a replacement, he is entitled to the cost of hiring a replacement car. He can go round to the nearest car hire company and is prima facie entitled to recover the amount charged whether or not the charge is at the top of the range of car hire rates. However the basic principle is qualified by the duty to take reasonable steps to mitigate the loss. What is reasonable will depend on the circumstances."
Paragraph 148 - "we do not anticipate that the application of the correct legal principles will lead to disproportionate costs in small cases. The claim will be based on evidence as to the rate charged by a car hire company in the relevant area. Perhaps the rate will be at the top end of the range of company rates. Thereafter the evidential burden passes to the insurers to show that it would not have been reasonable to use that particular hire company which charged a lower rate..."
Paragraph 150 - "We had the assistance of written submissions from
Michael Brindle QC, who appeared for Centrus Limited, which was given leave to intervene. He provided us with information on the ABI scheme and suggested that the appropriate measure of damage for loss of use should be that set out in the scheme or based upon it. No doubt the scheme is, and will be, of benefit to insurers, the accident hire companies and the public; but the ABI figures cannot be taken in hostile litigation as being the appropriate figures of loss. They reflect a compromise agreed between the parties rather than an assessment of loss."
Paragraph 121 - "The Claimants both appear to have acted reasonably in placing the cars in the hands of respectable repairers and there were no supervening events. Further delays of that order were foreseeable. The extra loss caused by the delay in the repair must fall on the tortfeasor as there was no failure to mitigate. On the findings of fact in those cases the cost of hire should not have been reduced.The insurers of the Defendants should seek a contribution from the repairers for any unjustified length of repair."
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Dimond v Lovell
HOUSE OF LORDS: LORD BROWNE-WILKINSON, LORD NICHOLLS OF BIRKENHEAD, LORD HOFFMANN, LORD SAVILLE OF NEWDIGATE AND LORD HOBHOUSE OF WOODBOROUGH.
17-19 JANUARY, 11 MAY 2000
Summary
D's car was damaged in a road traffic accident caused by L's negligence. Whilst her car was being repaired, D hired a replacement vehicle from an accident hire company, ie a company which hired vehicles to drivers whose own cars had been damaged in road accidents caused by another's fault. Under cl 5(i) of the agreement, the company allowed D credit on the hire charges until the conclusion of a claim for damages against L, while cl 5(iii) gave the company the right to pursue such a claim in her name. At trial, L's insurers contended that the hire charges were irrecoverable as damages, but that argument was rejected by the judge. His decision was reversed by the Court of Appeal which held that the hire agreement was a consumer credit agreement within the meaning of s 8a of the Consumer Credit Act 1974, that it therefore constituted a regulated agreement for the purposes of the Act, that it had not been executed in accordance with the A's provisions, that it was therefore unenforceable against D by virtue of s 65(1)b and that accordingly she had suffered no loss through obtaining the replacement vehicle. On appeal to the House of Lords, the company contended that the services provided by the agreement were not confined to the use of a car but also extended to the pursuit of D's claim, that accordingly the agreement did not postpone payment of the hire charges beyond the date on which they would first have become payable and that therefore the provision for "credit" was not really credit at all. Alternatively, the company contended, interlaid, that D was entitled to be compensated for loss of the use of her own car even if the hire agreement was unenforceable.
Held - On the true construction of cl 5 of the agreement, the company had provided D with credit. The company's contention to the contrary depended upon construing the agreement as imposing upon it a duty to D to pursue the claim, but the agreement was not susceptible to such an artificial construction. While it gave the company a right to pursue the claim in D's name, it did not impose a duty to do so, and such a duty could not be implied. Rather, the company's only obligation under the agreement was to provide a vehicle. In the absence of credit, it would have been entitled to payment during or at the end of the hire. The provisions about the pursuit of the claim were express or implied conditions that deferred the right to recover the hire, and therefore constituted the grant of credit. It followed that the agreement was a consumer credit agreement and a regulated credit agreement within the meaning of the 1974 Act. As such, it had not been properly executed, and was therefore unenforceable against D. Moreover, she could not recover damages for the notional cost of hiring a car that she had in fact used free of charge, and it would be contrary to the intention of the 1974 Act to allow her to recover the hire charges as trustee for the company. Accordingly, the appeal would be dismissed; Donnelly v Joyce [1973] 3 All ER 475 and Hunt v Severs [1994] 2 All ER 385 considered.
Per Lord Browne-Wilkinson, Lord Hoffmann and Lord Hobhouse. Where a
successful claimant has entered into an accident hire agreement, the damages recoverable for the cost of hire are limited to the equivalent spot rate for the hire of a car from an ordinary car hire company.
Decision of the Court of Appeal [1999] 3 All ER 1 affirmed.
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Lagden v OConnor
UK House of Lords: Lords Nicholls, Slynn, Hope, Scott and Walker: [2003] UKHL 64: 4 December 2003
Summary
A claimant has a duty to take reasonable steps to mitigate his loss. But what if his own pre-existing impecuniosity (lack of financial resources) means that he has no choice in the way in which he mitigates and, as a result, gains an additional benefit and/or incurs additional cost? The traditional view has been that any benefit has to be set against the damages awarded and any additional cost is not recoverable. But, in this case, the majority of the House of Lords decided that the defendant must take the claimant as he finds him. Where the claimant's lack of financial means leaves him with no choice as to how to mitigate his loss, any related additional cost is recoverable, and any related benefit will not be set against his damages.
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