In Greek mythology the Hydra was a serpent-like water monster with many heads. For every head cut off it grew two more. It had poisonous breath and blood so virulent that even its tracks were deadly. Credit hire claims are like the Hydra – every time the appeal courts strike off a metaphorical head, another argument (or two) seems to emerge.

In a claim for a car hired on credit, absent impecuniosity, the question is what is recoverable? Since Dimond v Lovell [2002] 1 A.C. 384 it has been clear that what is recoverable is the basic hire rate. How is that to be assessed?

 The Court of Appeal has just revisited the issue in Karl Stevens v Equity Syndicate Management Limited.

How are the additional benefits to be stripped out of the credit hire rate? The burden is on the defendant. But what happens when the court is provided with a wide range of basic hire rates? Kitchin L.J. posed the question: “should the judge take a figure from the top or the middle or the bottom of the range? Or should he take an average? Or should he conclude… that, if one of the figures at the top of the range is close to or exceeds the credit hire rate, then the defendant has simply failed to prove that the BHR is less than the claimed credit hire rate and so not apply a discount at all?”

Lord Hoffman said in Dimond that the court should consider what the claimant would have been willing to pay an ordinary hire company for the use of a car. However he did not mean that the court should consider what the individual claimant was prepared to pay: the attitude of the actual claimant was irrelevant. The analysis is an objective one and is to determine what the BHR would have been for a reasonable person in the position of the claimant to hire a car of the kind actually hired on credit.

The Court of Appeal concluded that it was reasonable to suppose that the lowest reasonable rate quoted by a mainstream supplier for the hire of the vehicle is a reasonable approximation to the BHR. The key is to identify rates for the hire, in the claimant’s geographical area, of the type of car actually hired. If that yields a single rate then that is likely to be a reasonable approximation of the BHR. If a range of rates, then the BHR may be obtained by identifying the lowest reasonable rate quoted by a mainstream supplier, or if not mainstream supplier, by a local reputable supplier.

It was one of the 12 labours of Heracles to destroy the Hydra and he did so with the assistance of Iolaus who finally burned out the roots of the heads with firebrands as Heracles cut them off. Whether the Court of Appeal has achieved this with credit hire claims remains to be seen.