Legal Developments In The Credit Hire Market
When the Court of Appeal gave their judgment in the case of
"Clark v Ardington (2002)", did they anticipate
that 7 years on the court system would once more become flooded
with claims or did they expect their judgment to put a nail in the
coffin of credit hire litigation?
Background
The first attack on the credit hire industry took place 15 years
ago with the case of Giles v Thompson and the allegation
that credit hire agreements were champertous : an argument which
failed.
However in Dimond v Lovell (2002) the Law
lords denounced that credit hire agreements were regulated
agreements and if improperly executed were unenforceable against
the hiree and could not therefore be recovered from the
defendant.
The final challenge was mounted against the entire scheme,
credit hire and repairs in the Clark v Ardington case. The
Court of Appeal was clear: the scheme was not a pretence, sloppy
enforcement was merely a commercial party choosing not to enforce
their strict legal rights.
The remainder of the decision was framed in such a way that
challenge to claims for credit hire seemed dead and buried. But
with credit hire claims rising in not only cost but volume we take
a look at the recent developments, practices and legal challenges
facing the credit hire and motor insurance industries.
Enforceability
In the recent reported decision of Company Call Centre
Technology Ltd v Sheehan* the appeal judge upheld an earlier
decision to dismiss the claim for hire charges on the basis that
there was no evidence that the claimant had a liability to pay the
hire charges incurred. The claimant's employee had received the
hire agreement together with its terms and conditions for signature
4 months after the hire period had ended and the replacement car
had been returned.
Thus whilst the Court of Appeal may have firmly put to bed the
allegation of pretence and enforceability, it would appear that
commercial practice does not override the basic contractual
principle that past consideration is not good consideration and the
liability to pay hire charges still needs to be established and
should not be overlooked, because sloppiness in sending
documentation after a hire period has ended is not commercial
practice that avoids legal principle.
Need
"The claimant must prove his need to hire a replacement
vehicle although the burden will usually be easy to satisfy.
Advocates will frequently remind you that the need for a hire car
is not self proving" District Judge Paten advises his brethren
in the winter edition of the District Judge's Law Bulletin
reminding them of Giles v Thompson.
And herein lies the problem in challenging "need for
hire". The burden of proof lies squarely with the claimant but
is a fairly low threshold. However, perhaps that threshold is about
to change.
The...
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