Majid Ali v HSF Logistics Polska SP Zoo

A credit hire claim may fail for lack of causation where the claimant’s vehicle could not lawfully have been used on the public highway because it lacked an MOT. The court must distinguish this targeted causation analysis from the all-encompassing defence of ex turpi causa. The former asks whether, and for how long, the accident caused a compensable loss of use. A claimant must prove, on the balance of probabilities, that the vehicle could and would have obtained a valid MOT during the hire period. If that is not established, there is no loss of lawful use to mitigate. Claims unaffected by the absence of an MOT, such as recovery and repair costs, remain recoverable.

The claimant appealed from a judgment of Mr Recorder Charman in the Warwick County Court. Liability for a lorry’s collision with the claimant’s parked Volvo was admitted, and the reasonableness of the replacement vehicle, hire period and charges was accepted. The Volvo’s MOT had expired several months before the accident, and the claimant had not shown that he intended to obtain a new certificate.

The County Court rejected the pleaded ex turpi causa defence as disproportionate but dismissed the credit hire claim on a separate causation basis. The appeal concerned whether that causation reasoning was genuinely distinct from the rejected illegality defence.

1. Appeal dismissed. The County Court was correct to dismiss the claim for credit hire charges.
2. The court distinguished two forms of illegality. The ex turpi causa defence is all-encompassing and prevents recovery on public-policy grounds. Its application requires consideration of the underlying prohibition, other relevant public policies and proportionality, following Patel v Mirza [2016] UKSC 42.
3. A separate, targeted analysis concerns the particular loss claimed. Where the claim is for hire charges incurred to mitigate loss of use, the court must ask whether the vehicle could lawfully have been used on the road and for how long it would have remained without a valid MOT if the accident had not occurred.
4. The claimant bears the burden of proving that he could and would have obtained a valid MOT during the hire period. Without that proof, he has no compensable loss of lawful use and cannot recover hire charges said to mitigate it. This does not necessarily affect claims for recovery, repair or diminution in value.
5. The reasoning in Agbalaya v London Ambulance Service was correctly applied. The distinction between a driveable car and a car lawfully usable on the highway was a causation distinction, not ex turpi causa in disguise. Hewison v Meridian Shipping [2002] EWCA Civ 1821, [2003] ICR 766 supported the analysis that illegality may relate to particular loss rather than the whole action.

The court observed that insurers could make entitlement to a replacement hire vehicle conditional on the damaged vehicle having a valid MOT at the accident date.

• High Court (King's Bench Division): On appeal from the Warwick County Court, the appeal was dismissed. The decision of Mr Recorder Charman dismissing the credit hire claim was upheld.