Following the accident, the claimant, a motorcycle courier, hired a replacement moped for 132 days with McAms. The total hire charges sought were £28,869.84.
The claimant’s profit earned from her work as a courier during the period of hire was just £528. Impecuniosity was alleged, both in the sense that the claimant could not have afforded to stay at home and not work following the accident, as well as in the usual sense that she could not afford to hire at basic hire rates (‘BHR’).
BHR covering courier use was not available, but evidence of BHR for social, domestic and pleasure was obtained and relied upon.
The judge rejected the claimant’s evidence on impecuniosity as inconsistent and unreliable. On need, while initially appearing to indicate an acceptance that the claimant needed transport for social domestic and pleasure use, in giving judgment the district judge held that she could have mitigated her loss by using public transport.
Further, applying the principles of Hussain v EUI, the judge held that the claimant had failed to mitigate by hiring for work purposes and awarded the loss of profit sum of £528 in place of the hire charges.
The claimant appealed. One of the key grounds of appeal focused on an argument that the judge was wrong to find that the claimant had no need for hire and that credit hire charges should have been awarded to cover this use.
Acknowledging the possible weaknesses of the judge’s reasoning on need, we filed a respondent’s notice on behalf of the defendant, submitting that even if the judge was wrong to find the claimant had no need to hire, the appeal court should substitute the order made not for the credit hire charges as the claimant contended, but for the loss of profit plus BHR for SD&P use instead. The respondent’s notice was put in the following terms:
the correct approach to assessing quantum would have been to consider whether, having regard to the principles expounded in Hussain v EUI, the costs of hire significantly exceeded the loss of profit plus the cost of hire for the purposes of social, domestic and pleasure use. Plainly they did, since the cost of basic hire as per the evidence of Mr Davies for the six-week period assessed as reasonable by the district judge, together with the loss of profit awarded for the same period, totalled £1,428; that is £900 for the cost of hire plus £528 for loss of profit.
Accordingly, in the event that the appeal succeeds to the extent that hire was justified for the purpose of social domestic and pleasure use, the respondent seeks that the judgment sum is substituted in respect of loss of profit and basic hire charges to the sum of £1,428.00.
His Honour Judge Hellman fully accepted these submissions, quoting them verbatim in the judgment, and awarded the total sum of £1,428.
This judgment is significant as it is the first known decision at appellate level where the principles of Hussain v EUI have been applied to a motorcycle courier rather than a taxi driver.
Moreover, on appeal the court had no hesitation in allowing basic hire rates for social and domestic use in addition to the sum for loss of profit. This is a pleasing endorsement of this approach and one that is likely to assist in other cases involving couriers and taxis, particularly since it is commonly the case that basic hire rates are not available for business use.
Going forward, insurers should consider making ‘Copley’ intervention offers for both a standard vehicle and a cash sum for loss of profit at the same time, particularly where a plated taxi is unlikely to be obtainable. This is likely to considerably diminish a claimant’s prospects of successfully arguing that either a need for an SD&P vehicle, or a lack of funds, applies as an exception to Hussain v EUI.
Alternatively, where such an intervention offer has not been made, standard basic hire rates can be offered in addition to the sum for lost revenue.
For more information, please contact:
Gary Herring - Partner
Email: gherring@keoghs.co.uk
Kirsty Hunt - Case Handler
Email - khunt@keoghs.co.uk
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