The case concerned 13 small claims which had arisen out of minor traffic accidents. In each case the Claimant's were insured by RSA and the Defendants by Provident and Allianz.
In each case the Claimant's insurance contained an option whereby the Claimant could have the vehicle reinstated if the cost of repair was judged to be less than the value of the vehicle. If the option was taken there were two further options, either to engage their own repairer or elect to use RSA's system for repairing vehicles. If the policy holder chose the latter the policy also gave the option of a courtesy car. In all 13 cases the Claimants chose to use the RSA repair system option.
The RSA repair system key facts were:
- a company in the RSA group called MRNM (trading name of RSA Accident Repairs Ltd) owned six garages (called QRC's) staffed by its own employees,
- if the insurer elected the RSA option the car would be repaired in one of the garages or , independent sub contractor who would be part of the PRN (Priority Repair Network);
- there was a service agreement between RSA and MRNM;
- the amount charged by MRNM was designed not to exceed what an individual would be charged if they had gone into the market to get the same repairs done. In some cases the Claimant's had exercised the right to a courtesy car. In all cases RSA was exercising its right of subrogation and brought the claims in question.
The main question was whether the Claimant could recover the full cost of repairs when the vehicle had been repaired using the RSA repair system. There was also a subsidiary question regarding the recovery of cost of the courtesy car.
In January 2012 it was ordered there be a determination of three preliminary issues:
- where a vehicle was damaged as a result of negligence and was reasonably repaired, whether the measure of the Claimant’s loss would be taken as the reasonable cost of repair;
- if a Claimant’s insurer had arranged repair, whether the reasonableness of the repair charged could be judged by reference to:
- what a person in the position of the Claimant could obtain on the open market; or
- what his or her insurer could obtain on the open market
- where a vehicle was not a write off and an insurer indemnifies the insured by having repairs performed and paying charges for those repairs, and where the amount claimed was no more than the reasonable cost of repair, whether that amount was recoverable.
In May 2012 the judge heard argument on the above. The Defendant appealed the decision.
The appeal was dismissed:
- It was established law that where a chattle was damaged by the negligence of another the proper level of that loss was the diminution in value of that chattle, if it could be economically repaired the Claimant was entitled to have the repair costs. Only if the sum claimed appeared to be clearly excessive would the Court be justified in investigating whether the sum exceeded that which would have been incurred by having the repairs carried out by a reputable repairer. It is not the cost of the repairs which constitutes the loss, but the diminution in value of the chattle.
- The Defendants had to accept that the Claimant’s insurance arrangements were irrelevant and could not be prayed upon to aid a reduction in their liability. The Claimant is entitled to recover losses, whether such a claim is brought directly, or by the insurer who has indemnified the Claimant and brings a subrogated claim.
- If the Claimant’s insurer has arranged the repair, the reasonableness of the repair charge was to be judged by reference to what a person in the position of the Claimant could obtain on the open market.
- The position of the courtesy car was different. It cannot be part of the repair costs. if the Claimant is deprived of a chattle he could recover a sum for that deprivation. There are cases which show that it is established that a Claimant can recover these costs provided he has reasonably mitigated his loss, and the costs contains no element which is not legally recoverable.
- The Defendant’s arguments on specific charges included in the invoices for repairs all missed the point. The question was not whether each charge was reasonable, but whether the overall cost is reasonable.
- The issue between the parties regarding the courtesy car centred on whether that insurance policy would indemnify the Claimant for his loss of use of the vehicle by supplying a replacement. This was a contractual benefit under the insurance policy Mitigation concerned actions taken to reduce the loss after the tort had occurred. here the Claimant was exercising contractual right. The reasonable cost of the courtesy car (£11 a day) was recoverable.