Motor Brief: latest decisions June 2020

A roundup of recent court decisions raising issues relating to the applicability of fixed recoverable costs and set off in Qualified One Way Costs Shifting cases; uninsured motor accidents on private land; credit hire and fundamental dishonesty.

Welcome guidance on the applicability of fixed recoverable costs and set off in QOCS cases

Ho v Adelekun (No. 2) [09.04.2020]

The judgment in this case raises some interesting questions as to the protection that Qualified One Way Costs Shifting (QOCS) was intended to, and does, provide claimants. The Court of Appeal has urged the Civil Procedure Rule Committee (CPRC) to consider this further, in particular whether set off should be allowed in cases subject to QOCS. For now, where a defendant has an entitlement to costs, the defendant's costs may be set off against the claimant's damages and costs. Permission to appeal to the Supreme Court has been granted.

This was the second time this case came before the Court of Appeal. In the first judgment, the court considered the impact of accepting a Part 36 offer and whether the parties had contracted out of the fixed costs regime. The Court found in favour of the defendant, namely that fixed recoverable costs applied.

The defendant, relying upon rule 44.12 of the Civil Procedure Rules (CPR 44.12), then sought to set off their costs of the Appeal against their liability to pay the claimant's fixed costs of the original action resulting in the case coming before the Court of Appeal again. The claimant argued that QOCS is a self-contained code providing complete protection from payment of costs unless the exceptions in CPR 44 applied, none of which did in this case.

The Court of Appeal, bound by their earlier decision in Howe v Motor Insurers’ Bureau [2017], found in favour of the defendant and were not persuaded to exercise their discretion. Whether the situation remains once the Supreme Court and CPRC have considered the issue is uncertain. For now, the case provides some welcome guidance on the applicability of fixed recoverable costs and set off in QOCS cases.

Contact: Sandip Sidhu

Supreme Court rejects application by MIB for permission to appeal

MIB v Michael Lewis (a protected party) [05.06.19]

On 13 February 2020 the Supreme Court rejected an application by the Motor Insurers’ Bureau (MIB) for permission to appeal against the Court of Appeal decision in the above case. This means that the Court of Appeal’s decision extending the liability of the MIB to meet claims for uninsured motor accidents which occur on private land still applies.

The case involved a road accident in June 2013 occurring on private land (not a road or public place) in which the fault driver was uninsured and struck Mr Lewis (a pedestrian) causing injury. The MIB asserted, ultimately without success, that because the accident occurred on private land there was no obligation on the MIB to meet the claim from Mr Lewis - there not being a relevant liability under the Uninsured Drivers’ Agreement 1999 (UDA).

The appellate court and then Supreme Court in the UK, have upheld Article 3 of the 2019 European Union Directive (2009/103/EC) over and above the MIB Articles of Association and the UDA. Both courts found that the MIB was an emanation of the state and, as such, the same directive would (currently) have direct effect upon them.

That directive provides that the innocent victims of motor vehicle accidents have a right to compensation whether an accident occurs on public or private land. The MIB are therefore not able to avoid paying such claims on the basis there is no relevant liability under the UDA.

Contact: Niall Edwards

Related items:

Taxi driver found to have failed to mitigate when hiring a taxi on credit terms

Vamsi Putta v Royal & Sun Alliance Insurance Plc [28.01.20]

The claimant taxi driver hired a replacement vehicle at a rate of £408 per day for a total of 9 weeks costing in excess of £26,000. At trial, the judge found that the claimant was not impecunious as he could have utilised his credit card to mitigate his loss and initiated the repair to his vehicle. The claimant was awarded the sum of £68 per day over a period of 49 days in the sum of £3,334.

The decision was appealed and it was argued, amongst other things, that the judge was wrong in finding that the claimant was not impecunious during the period of hire.

The court found that the judge was entitled to find that the claimant was not impecunious at the time of the commencement of hire. The claimant had access to substantial funds through his credit card and his personal circumstances had not altered whereby the claimant would be deemed to be impecunious at any time throughout the period of hire.

The judge had also rejected the claimant’s evidence that he had undertaken a search to ascertain what the basic rate would have been. As such, the claimant had not properly weighed up the alternatives before entering into a credit hire agreement.

Contact: Philip Espline

Claimant can recover credit hire charges even without a valid MOT

Justin Jack v Gregorz Borys [20.12.19]

At first instance, the claimant’s claim for credit hire had been dismissed on the basis that, at the time of the material accident, the claimant’s vehicle did not have a valid MOT certificate. The court found that by hiring a vehicle, the claimant was being placed in a better position than he was prior to the accident, namely that he was driving a now fully roadworthy vehicle.

On appeal, the court found that the district judge had taken the wrong approach. This was not a case where the claimant’s vehicle was unroadworthy. The claimant’s MOT had expired four and a half months prior to the accident and it had passed when repairs had been completed.

It may have been a slight improvement to the claimant’s position, but it should not mean that the claimant should be precluded from recovering the cost of hire. The claimant had no choice but to hire a comparable vehicle and the absence of a valid MOT certificate was not sufficient to avoid the incurring of hire.

It was held that the judge at first instance had taken the wrong approach when looking at the matter in respect of what the claimant failed to do rather than what his entitlement was.

Contact: Philip Espline

Substantial personal injury claim dismissed on the grounds of fundamental dishonesty

Gavin Alexander v Gary Wheeler [18.10.19]

In this case, the claimant’s personal injury claim for damages - originally pleaded in excess of £800,000 - was dismissed on the grounds of fundamental dishonesty. Kennedys were instructed to act on behalf of the defendant’s insurer, esure.

The claimant sustained a tri-malleolar fracture to the right ankle when he was knocked over by a vehicle at work. A full admission of liability was made and the matter proceeded to Trial.

The defendant argued that the claimant’s witness statements, testimony to experts, GP records, and schedules of loss were all misleading. The defendant relied on surveillance footage, social media and the comments of the medical experts when comparing the footage with the account they were given by the claimant.

The claimant’s evidence at trial was described by the recorder as “inconsistent”, “misleading”, “altered” and at odds with the joint orthopaedic expert evidence. The Recorder concluded that the “claimant is in my judgment an unreliable and dishonest witness who has sought to exaggerate his claim”, noting the substantial contrast between the schedule of loss prepared prior to and after disclosure of the surveillance footage.

The claimant’s claim was dismissed on the grounds of fundamental dishonesty pursuant to s57 of the Criminal Justice and Courts Act 2015.

Contacts: Joy Middleton, Nicola Hammerton, and Hollie Bartley

Related item: Substantial personal injury claim dismissed on the grounds of fundamental dishonesty

Read others items in Motor Brief - June 2020