Bunting v Zurich Insurance Plc

In a credit-hire claim, where the claimant reasonably needs a replacement vehicle and is not relying on impecuniosity, damages are assessed by reference to the lowest reasonably available basic hire rate for a comparable vehicle. The insurer bears the burden of proving any difference between the credit-hire rate and that basic rate.

Perfect evidence of an exact vehicle, precise date, or uninterrupted availability is not required. A first-instance judge may assess imperfect comparable-rate evidence, make sensible adjustments, and use experience to reach a fair valuation. An appellate court should interfere only where the approach involves an error of law or the findings are perverse.

The claimant’s sports car was damaged in a road accident. He hired a comparable prestige vehicle on credit-hire terms for 78 days and claimed the hire charges and repair costs. Liability for the accident and the repair costs were admitted, but the insurer challenged the amount of the hire claim.

The Recorder rejected the challenges to the claimant’s need for a replacement vehicle and to the suitability of the vehicle hired. Because impecuniosity was not alleged, he assessed damages by reference to a basic hire rate and awarded substantially less than the credit-hire charges. The claimant appealed, challenging the treatment of the rate evidence, the 30-day hire limit, availability, adjustments and the rate for the final day.

1. Appeal dismissed. The Recorder had correctly applied the structured approach identified in Pattni v First Leicester Buses Ltd [2011] EWCA Civ 1384: need for a replacement vehicle, reasonableness of the vehicle hired, impecuniosity, proof of a difference between the credit-hire rate and the basic hire rate, and the amount of that difference.
2. It was common ground that the claimant had reasonably needed a replacement vehicle for 78 days and had reasonably hired a comparable prestige vehicle. Since impecuniosity was not alleged, recoverable damages were limited to the lowest rate at which the claimant could reasonably have hired a comparable vehicle on normal trading terms. The burden lay on the insurer to prove any excess of the credit-hire rate.
3. The Recorder was entitled to rely on the only basic-rate evidence before him, despite shortcomings in the database evidence and the absence of objection at trial. He could infer that the rate was indicative throughout the hire period, notwithstanding the supplier’s 30-day maximum term. He could also find that a comparable vehicle, though not necessarily the exact vehicle identified, would have been available at broadly similar cost.
4. The approach was consistent with Crewe Services v Silk (unreported, CA, 2 December 1997), Latimer v Carney [2006] EWCA Civ 1417 and Bent v Highways & Utilities Construction Ltd [2010] EWCA Civ 292. Judges may do their best with imperfect valuation evidence, use comparables and make appropriate adjustments. Exact spot-rate evidence for an exactly comparable car is unnecessary.
5. The Recorder was entitled to use experience to value the final day at one-seventh of the weekly rate and to make a rough and ready adjustment. The findings were findings of fact open to him and were nowhere near perverse. The appeal therefore disclosed no error of law. The insurer’s costs were summarily assessed and ordered to be paid by the appellant.

• High Court (Queen’s Bench Division) — appeal from the decision of Recorder Le Poidevin QC at Northampton County Court on 1 November 2018. Permission to appeal was refused on the papers and later granted orally by Murray J. Mr Justice Pepperall dismissed the appeal and ordered the appellant to pay the respondent’s costs.