Keoghs Corporate Risks expose ‘impecunious’ Bentley owner for £75K credit hire saving

Keoghs Corporate Risk motor team have successfully defended a credit hire claim at trial where a Bentley owner pleaded impecuniosity. The trial win, which resulted in significant savings to the tune of £75,000 and a favourable costs award for the defendant, highlights the importance of investigating a claimant’s financial status.

Warning Signs

The case, defended on behalf of a Corporate Risk Transport and Logistics client, involved a claim for credit hire arising from a road traffic accident. The sum pleaded for credit hire was in excess of £92,000. The claimant hired a replacement vehicle for 70 days at a rate of £1,079 per day whilst his vehicle, a Bentley Continental, was being repaired.

The claimant pleaded impecuniosity, saying that whilst he had funds and credit cards, these were required for planned building works and it was not ‘free cash’ therefore should not be considered as evidence of pecuniosity or impecuniosity. 

Given the vast sums claimed and the vehicle owned by the claimant, the defendant had immediate concerns.  A basic hire rate report (BHR report) was obtained and the defendant made an early and reasonable Part 36 offer in 2020; the offer slightly in excess of what the BHR report stated to tactically allow for some litigation risk.

The disclosed financial documentation showed that he was Director of a company, in well paid employment, with children who attended private school. There was also transactions to an account for which we had no disclosure. There was a preliminary issue prior to the trial itself in that the claimant failed to disclose all financial documentation, but unusually there was no de-barring order. 

The Trial

Having taken the case to trial, the claimant accepted on cross examination that he would have been paid dividends at the time of the claim. He also accepted that he had two other sources of income, from an energy grant and from rental properties, none of which were mentioned in his pleadings or witness statements.

Using our forensic analysis, we were also able to demonstrate that:

• Over a period of six months he had received substantial six figure sums from his parents, which he claimed was for property developments
• He had a deposit account into which over £1,000 per month was being transferred, but for which no statements had been disclosed. He also failed to mention the account in his pleadings or witness statement.
• There was also a credit card with large available sum credits, including significant sums in his credit account.
• The claimant’s subjective view that he couldn't afford to hire was of no value, especially given his concession in evidence that it was based on the cost of hiring on credit rather than the conventional market.

Essentially the claimant had not proved that he was impecunious. In fact, he was not, and could quite reasonably have afforded to pay for hire without making unreasonable sacrifices.

Judgment

The judge agreed and determined that the claimant was not impecunious, awarding them the sum put forward in the original BHR report. As result the claimant failed to beat the defendant’s Part 36 offer and the defendant was awarded all of its costs of the action plus interest. 

Keoghs Comment

Whilst a claimant may claim and plead to be impecunious, it is sometimes not so. Further investigation into a claimant’s financial status and income is pivotal in each and every case. The court accepted here that, despite only one rate being obtained by the defendant in the BHR report, this was enough to discharge its burden where the rate claimed was concerned. This was irrespective of the claimant’s rebuttal to the evidence, citing arguments based on limited availability evidence, no terms and conditions and locality. 

This case also served as an important reminder that a good early Part 36 offer is essential where taking a robust stance on the claim for credit hire is concerned. When used appropriately, it can really pay dividends.