Motor Insurers Bureau v Drewy Houston

In a credit-hire claim, the reasonableness of the hire period and rate are separate questions. A debarring order must be read according to its ordinary and natural meaning. An order preventing reliance on impecuniosity for determining the rate does not necessarily prevent reliance on lack of funds to justify the duration of hire.

The claimant bears the burden of proving impecuniosity, while the defendant bears the burden of proving failure to mitigate. An appellate court may interfere with a trial judge’s mitigation finding only where it is plainly wrong or perverse. A party will generally be prevented from advancing on appeal a new point not taken at trial, particularly where further evidence might have been called.

The respondent claimed damages after his vehicle was written off in a road traffic accident caused by an uninsured driver. The appellant, the Motor Insurers Bureau, challenged awards for replacement-vehicle hire and storage of the damaged vehicle.

The County Court awarded the basic hire rate for the full 197-day hire period and allowed storage costs up to the vehicle’s removal and scrapping in November 2019. The respondent had failed to comply fully with an order requiring financial disclosure and was debarred from relying on impecuniosity for determining the appropriate rate of hire.

The appeal concerned the scope of that order, the application of mitigation principles, and whether the Recorder’s conclusions were plainly wrong or perverse.

Appeal dismissed.

1. The governing principle is that a claimant may recover the reasonable cost of hiring a replacement vehicle, but only to the extent reasonably incurred. Mitigation is a question of fact. The claimant must choose the least expensive route that achieves mitigation where reasonable alternatives exist. The defendant bears the burden of proving failure to mitigate, while the claimant bears the burden of proving impecuniosity.
2. The debarring order prevented the respondent from relying on impecuniosity to justify the credit-hire rate rather than the basic hire rate. Its express wording did not prevent him from relying on lack of funds to explain why he could not purchase a replacement vehicle sooner. Zurich Insurance plc v Sameer Umerji was concerned with a differently worded order and did not establish that impecuniosity must have the same scope for every purpose.
3. The Recorder was entitled to accept the respondent’s evidence that he lacked funds to purchase a replacement vehicle until receipt of the pre-accident value. The absence of complete financial disclosure did not make that conclusion plainly wrong or perverse, although a failure to provide full financial documentation, particularly in breach of an order, may often be fatal to credibility on impecuniosity.
4. The Recorder was also entitled to allow storage costs until November 2019. The appellant had accepted at trial that the lower storage invoice was the appropriate figure and had abandoned, or failed to advance, the argument that the vehicle should have been scrapped earlier.
5. The appellant could not raise on appeal a new betterment or vehicle-choice argument that had not been taken at trial and might have required further evidence.

1. High Court (King’s Bench Division): appeal from the Recorder’s decision dismissed.
2. Birmingham County Court: after trial on 30 June 2023, Recorder Brown found the uninsured driver liable and awarded damages including basic-rate hire costs for 197 days and storage costs of £4,159.20.