Credit Hire Crunch

Credit hire agreements signed months after a hire car

had been returned were insufficient evidence to establish a

liability between a claimant and a credit hire

company.

The appeal

In a recent appeal before the High Court; Company Call

Centre v Sheehan [2009], in-house Counsel for Browne Jacobson

LLP successfully argued that a District Judge sitting in the

Birmingham County Court had been correct in reaching the view that

late signed hire documents did not establish a liability between

the claimant and Helphire Plc, who had provided a hire vehicle. It

followed that the defendant should not therefore be ordered to pay

the associated charges.

Background

The claimant driver was instructed to contact Helphire Plc to

arrange use of a replacement vehicle. He was advised that any

charges would be met by the defendant's insurers, and so made

use of a BMW Z4 for the period 19 March to 3 April 2007. At a later

date, and after the hire period had ended, the credit hire

documents were sent to the claimant in the post, which were

returned, signed on 12 August 2007.

His Honour Judge Worcester took the view that there was force in

the defendant's argument that "past consideration is not

good consideration" and that the later signed documents did

not establish a liability because the vehicle hire was complete

before the contractual paperwork was sent to, and signed by, the

claimant. The District Judge was therefore right to reduce the hire

charge claim from £4,250.00 to nil.

The case differed from that of Borley v Reed and

Carson v Tasaki (in which the late signed documents were

accepted as confirming the claimant's liability to pay), on the

grounds that the claimant had given clear evidence that he had not

been made aware of the liability to pay the hire charges until

after he had finished using the vehicle.

Significant decision

This is a significant decision in the ongoing battle between

insurers and credit hire firms, as claimant drivers are often

unclear of their liability to pay hire charges until the detailed

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