W v Veolia Environmental Services (UK) PLC 27.07.11
Claimant succeeds in claim raising issues in relation to the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008.
On 12 December 2008 a refuse truck struck the Claimant’s Bentley whilst it was parked outside his home, rendering it unroadworthy. The car is now 21 years old with a value of around £16,000. The repairer arranged for Accident Exchange to provide an alternative vehicle. The Claimant said he needed a prestige vehicle to protect his image in his business and when he went to the golf club. Accident Exchange provided a modern Bentley at a cost of £863.68 per day. The car was delivered by Accident Exchange’s driver to the Claimant’s home and business address and the Claimant signed the agreement at that time. Hire was limited to 85 days, and £100,000 for the hire charges. The Claimant was sent a second agreement in the post covering the period from 13 March 2009, which he signed and returned.
Despite the absence of serious damage, it took 135 days for the car to be repaired and the hire charges totalled £138,308.43. It was agreed between the parties that, if the vehicle had been hired on non-credit terms, the reasonable cost of hire would have been £485 per day (representing a saving of £72,833).
The following issues were in dispute:
- Regulations - whether the credit hire charges were irrecoverable because of the effect of The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008. The Regulations give consumers a right to cancel regulated contracts when they are made following a meeting with a “trader” away from the trader’s business premises. The Claimant argued that, since the hire charges had been paid (payment having been made after the Regulations had been raised as an issue in the litigation) issues of unenforceability under the Regulations were irrelevant.
- Rate - if the charges were recoverable, what rate should be allowed?
His Honour Judge Mackie QC held that the Claimant was entitled to recover the credit hire charges in their entirety:
- Regulations - the effect of the Regulations was that Accident Exchange could not enforce its first hire contract against the Claimant. The hire agreement was, therefore, on its face unenforceable. However, as the Claimant had already apparently paid the hire charges there was no risk of double recovery and so the claim could proceed. The second hire agreement was not affected by the Regulations.
- Rate - as decided by the House of Lords in Lagden v O’Connor , if a claimant is impecunious, so that he could not afford to pay for the hire of a car upfront or commit his credit card to a certain amount in advance, then he would be taken not to have had any choice in the matter and the full hire rate is recoverable. The Claimant’s finances were in a bit of a mess and, in the context of the facts and the legal test, he was impecunious and had no choice but to take the credit hire car.
Even though the Claimant in this case was successful in recovering the hire charges, defendants and their insurers should still ensure that potential policy and regulatory arguments in credit hire claims are thoroughly explored. For instance, a thorough check is required where hire companies assert that hire charges have been paid off already (and subrogration, therefore, applies) to sidestep regulation arguments. Ensure copies of relevant insurance policies paying on hire are obtained and that they tally with and are clearly associated with the relevant hire agreements, terms and conditions of hire and indeed the hirer as well.