Credit Hire & Caveat Emptor: Let the Buyer Beware - Geoffrey Simpson-Scott, Colemans-ctts
19/04/15. The recent case of Karl Stevens v Equity Syndicate Management Ltd [2015] EWCA Civ 93 has generated a considerable amount of comment. Much of this is understandably along the lines of the new approach to valuing the spot rate/Basic Hire Charge sounding the death knell for Credit Hire Organisations.
What appears to have been overlooked by the Court of Appeal, however, is the ultimate effect on the consumer. Mr Stevens entered into the credit hire agreement because he would have lost his no claims bonus had he claimed the replacement hire car under his own insurance. That decision does not appear to have been unreasonable. These agreements are usually characterised by terms which require the Claimant to pay the full sum to the credit hire company if this is not recovered in full from the Defendant’s insurer. As will be well recognised, motor insurers have a significant degree of control over both sides of the litigation as all drivers need insurance.
The net effect of Stevens is that it seems likely that less than then local average spot rate is now recoverable. Whilst it may well result in credit hire companies revisiting their business models (which is probably no bad thing) it also creates...
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