Dickinson v Tesco Plc and associated cases [04.02.13]

Court of Appeal decides that there should be retrials on the question of basic hire rates; fresh evidence can be adduced by both sides to determine the appropriate rate.

Implications

Giving judgment on Monday in the set of test cases where evidence had been provided by Autofocus Ltd (AF), the Court of Appeal has decided that there should be retrials on the question of basic hire rates.

The Court of Appeal did not agree with Accident Exchange Ltd (AEL) that there should be no retrials and that these historic hire claims should now be assessed on the basis of the full commercial rates of the credit hire companies.

Instead, the Court preferred that there be full retrials with fresh rates evidence.

At the retrials, if the Defendants are able to adduce evidence showing that the hire rates awarded at the original trial were "about right", notwithstanding the shortcomings of the AF evidence, AEL will not then be able to show it sustained a loss in the original award.

Insurers generally will want to review their historic credit hire claims where AF evidence was used that went to trial. They should assess, perhaps by reference to alternative rates evidence, whether there was any shortfall in the award at the original trial.

The test cases did not provide any guidance on how the insurance and credit hire industries should approach hire claims settled before trial or before litigation. If further claims are to be presented by credit hire companies on these other claims, fresh legal actions would seem to be necessary.

Kennedys acted for AXA Group, the insurers of the Defendants in these claims.

Background

The four cases before the Court of Appeal concerned credit hire charges in RTA claims where liability was not in issue. In each case, the issue arose at first instance as to what basic hire rate (BHR) could be recovered by AEL.

Evidence had been provided by AF which indicated that the hire rates charged by AEL were higher that those produced by AF’s researches into local BHRs. AF’s evidence was challenged by AEL in these test cases, which had already been the subject of first instance decisions.

Decision

Giving the leading judgment in the Court of Appeal, Lord Justice Aikens held as follows:

  • In all four cases, the overriding objective to deal with cases justly required that the new evidence in relation to the AF system should be admitted on the appeal. In the cases where they were relevant issues, there should be an extension of time in which to seek permission to appeal, and permission to appeal should be granted.
  • In each case, the decision of the Judge at first instance on the hire rate to be recovered should be set aside and, contrary to the AEL assertion that there should be no retrials and full commercial hire rates should apply, there should be retrials of the issue of the recoverable hire rate. No restrictions should be put on what evidence may be adduced by either side at a retrial.