The decision in the case of Stevens v Equity Syndicate Management Limited  EWCA Cid 93 sent shockwaves through the credit hire world and had a significant impact upon the approach to handling such claims. No longer were the Courts prepared to award damages based upon the highest basic hire rate available; instead, the lowest reasonable rate from a mainstream supplier or a reputable hirer in the general locality formed the basis for calculating the sum due.
Unsurprisingly, the credit hire industry has been looking to challenge this decision and did so this month before the Court of Appeal in the cases of McBride v UKI and Clayton v EUI.
There were three grounds of Appeal in McBride, one of which was dismissed as it was based upon reconsidering the facts before the trial judge rather than considering a point of law. The remaining points were of potentially significant importance. The first point advanced was that the decision in Stevens was wrong and inconsistent with earlier authorities.
The Court of Appeal took little time to dismiss this argument, noting that the decision in Stevens represented a “sensible evolution of the law” which takes into account the fact that consumers can now easily access replacement vehicles via the internet.
A full written judgment is awaited setting out the reasons in more detail. However, it has been left open to the claimant, or more accurately the credit hire organisation who provided him with a vehicle, to petition the Supreme Court to appeal against this decision. The early indication is that they intend to do so.
The second point argued in McBride was that, as none of the basic hire rate quotes referred to in evidence had a zero excess liability, the defendants had failed to discharge the burden of proving that there was a comparable rate which was less than the credit hire charges sought.
The circumstances were slightly different in Clayton, as the trial judge adjusted the basic hire rates to allow for the fact that the quote did not have a zero excess liability equivalent to the same provision under the credit hire agreement. The rates were increased by 10% to reflect this. They were then increased by a further 15% as it was held that it would have been more reasonable to apply seven day hire rates, rather than the cheaper 28 day hire rates which the defendants sought to rely upon.
Judgment was reserved on this point. The eagerly awaited written decision is expected to be provided within the next six weeks. It is to be hoped the current trend of applying judicial common sense to this area of the law continues.