Giles v Thompson (Devlin v Basilington)

A credit-hire agreement linked to litigation is not champertous merely because the hire company finances or supports recovery of the hire charges. The court should assess the transaction as a whole and ask whether it constitutes wanton and officious intermeddling, without justification or excuse, which threatens the purity of justice or vulnerable litigants.

A motorist who remains personally liable for deferred hire charges suffers recoverable loss when that liability is incurred. Need for a replacement vehicle may ordinarily be inferred from ownership and use of a private car, but the defendant may displace that inference. Interest should reflect actual financial deprivation and remains discretionary.

Giles v Thompson and Devlin v Baslington were conjoined appeals concerning credit-hire schemes. Following road accidents for which the defendants were liable, each motorist received a replacement car under an agreement postponing payment of the hire charges while a damages claim was pursued. The motorists remained personally liable for the charges, but the hire companies expected payment from damages recovered.

County Court judges awarded the hire charges. In Devlin v Baslington, the judge also awarded interest on them. The Court of Appeal unanimously dismissed the defendants' appeals. The House considered whether the agreements were champertous or otherwise contrary to public policy, whether deferred and unpaid hire charges represented recoverable loss, whether need for a replacement vehicle had been proved, and whether interest was properly awarded.

1. Disposition. Lord Mustill delivered the leading speech. Lord Keith of Kinkel, Lord Ackner, Lord Jauncey of Tullichettle and Lord Lowry agreed. The House dismissed both appeals, save that it allowed the appeal in Devlin v Baslington against the award of interest on the hire charges. The appellants were ordered to pay the respondents' costs.
2. Champerty and public policy. Per Lord Mustill, the modern law should protect the purity of justice and vulnerable litigants. Outside crystallised categories, the transaction should be assessed as a whole. The question is whether there is wanton and officious intermeddling in another's dispute, without justification or excuse, together with the division of litigation proceeds required for champerty. Neither agreement met that description. The companies provided a genuine service and made their profit from hiring cars, not by sharing damages. They acquired no assignment, charge or direct proprietary interest in the claims or their proceeds.
3. Control and possible abuse. In Devlin v Baslington, the motorist chose and controlled her solicitor. In Giles v Thompson, the company selected the solicitor, but ultimate control and the solicitor's duties remained with the motorist. The suggested risks to witnesses, inflated charges and unnecessary hiring did not justify invalidating the scheme. Judges could control those risks by scrutinising need, duration and hire rates. Any misleading consumer publicity was better addressed through consumer protection law.
4. Recoverable loss. The agreements imposed real personal liabilities for hire charges, although enforcement was postponed. Incurring those liabilities constituted actual loss. The damages were recoverable even though the motorists had not paid the charges before judgment and might use the recovered money for another purpose. The House reserved the position where a substitute vehicle is truly supplied free of charge.
5. Proof of need. Need for a replacement car was not self-proving. It could ordinarily be inferred that a person incurring the expense of running a private car needed it and therefore needed a substitute while it was unavailable. A defendant remained free to displace that inference. Trial judges should scrutinise the duration and rate of hire.
6. Interest. Interest was discretionary and had to correspond with reality. The motorist in Devlin v Baslington was not deprived of her own money while the claim was pending because the hire debt was not then enforceable and the agreement imposed no interest. There was therefore no proper basis for interest on the hire charges in that case.

1. House of Lords: Affirmed the Court of Appeal's orders, except that in Devlin v Baslington it set aside the order affirming interest on the car-hire charges. Both appeals were otherwise dismissed.
2. Court of Appeal: Unanimously dismissed the defendants' appeals from the County Court decisions.
3. County Court: Awarded each motorist the claimed hire charges. In Devlin v Baslington, the court also awarded interest on those charges.