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Credit Hire: Is it right to hire when the cost of a replacement taxi exceeds a claimant's profits? - Darren Mendel, Partner at Horwich Farrelly

04/12/19. Darren Mendel, Partner at Horwich Farrelly, looks at the case of Hussain v EUI Limited where the issue of hire and profit was thrown into question

The recent case of Hussain v EUI Limited saw a familiar scenario for insurers where the defendant was presented with an 18 day hire period for a replacement Mercedes E220 from a specialist provider of plated vehicles. The claimant taxi driver sought to recover hire charges in the sum of £6,596.50. However, if he had not gone into hire and simply claimed a loss of net profit the claim would have been for a mere £423.

At the original trial HH Judge Carmel Wall limited the claimant’s claim to loss of profit as it was decided that “where the loss is of a profit-earning chattel, then the measure of damages is kept at the loss of profits and it is unreasonable mitigation to expend more in attempting to make a profit than the profit itself’’. Therefore, the claimant was awarded £423.

The claimant sought to appeal the decision to the High Court on the grounds that the judge was wrong to find that, as the claimant’s vehicle was a profit earning chattel, that claimant’s claim for the loss of use of that vehicle as a results of the defendant’s negligence was referable the claimant’s lost profits rather that the cost of hiring an alternative vehicle. Furthermore, the judge was wrong to find that the defendant had discharged the burden of proof in relation to the availability of a hire vehicle at a basic hire rate when the evidence relied upon by the defendant:

  1. failed to show that the hire company whose rates were quoted were able to supply the claimant with a vehicle plated for use in applicable area;

  2. failed to show that such hire company actually had any vehicles available for the claimant’s use at the time of hire;

  3. failed to show that they were willing to hire a vehicle to the claimant for the 18 day period he was without the use of his own vehicle following the accident.

Nevertheless, Mr Justice Pepperall rejected the claimant’s appeal for the below reasons...

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