Credit hire: Some clarity on impecuniosity
Associate and Credit Hire Expert Hannah Rudling considers the recent appellate judgement in the case of Holt v Allianz Insurance Plc (2023) EWHC 790 (KB). (Click here for the judgement).
Mr Holt (the appellant) was involved in a road traffic accident where it was alleged that as a consequence of the accident he was without the use of his vehicle and required the use of a hire vehicle for a period of 25 days. The hire was provided through Auxillis, a well-known provider of credit hire vehicles. The hire for 25 days amounted to the sum of £10,387.50.
Allianz Insurance (the respondent) insured the at fault other party and admitted the accident was the fault of their insured. Allianz challenged the credit hire charges and at an early stage produced basic hire rate evidence to demonstrate that similar vehicles could be hired for the same period for a significantly reduced sum of £1,550.00. It was asserted that Mr Holt was not impecunious and should only recover hire charges at Basic Hire Rates. To establish whether Mr Holt was impecunious or not and to justify hiring on a credit hire basis, Allianz requested from Auxillis basic impecuniosity documents relating to Mr Holt’s financial position both before and during the period of hire. Auxillis refused this request citing arguments which we regularly see, indicating specifically: –
- We do not send wage slips and bank statements at this stage of the claim.
- We are not able to comment on our client’s financial position as this is outside of our knowledge.
In response, Allianz made an application for pre action disclosure in accordance with CPR 31.6(3) and in the first instance, the application was allowed by the Circuit Judge. Mr Holt appealed and successfully argued, with a statement from the instructed solicitors Principia Law, that Allianz would not “likely” be the potential Defendant to any claim as Mr Holt would not pursue the insurer, but instead the driver or his employers as vicarious liability was asserted. As such it was argued that Mr Holt would never have issued proceedings against the insurer and as such Allianz had failed to comply with CPR 31.6(3) in that on Mr Holt’s evidence Allianz would never have been a party to the proceedings.
The Judge allowed the appeal on the potential Defendant issue, but what the Judge said Obiter appears far more important from a Defendant’s point of view, as it was stated that had Allianz made the application in their insured’s name, the appeal would have been dismissed and the previous decision would have been endorsed as all other requirements for pre commencement disclosure had been satisfied. In effect, the judge would have allowed at a pre issue stage the financial disclosure called for by Allianz and refused by Auxillis.
The purpose of pre action disclosure is to enable the parties to dispose fairly of proceedings, to narrow the issues in dispute and to save on costs. Although the appeal decision in Holt v Allianz Insurance Plc (2023) did not on this occasion conclude in Allianz favour, it is anticipated that the Judge’s additional comments will pave the way for Defendants to obtain early disclosure on the issue of impecuniosity, when this is often refused by credit hire providers, or not even investigated before a hire vehicle is provided.
This decision appears to provide significant clarity and it is likely to result in more applications for appropriate pre action disclosure in credit hire cases, although there will be a need to consider the tactical steps leading to the application and the identity of the respondent to the application to achieve success.
Rogers & Norton’s motor credit hire team regularly advise self-insured Defendants operating in the automotive sector who will regularly be involved in road traffic accidents and often carry significant insurance excesses, and their insurers on their potential exposure to credit hire claims. They regularly achieve significant savings and provide a cost-effective service to their clients. The decision in Holt v Allianz (2023) will further assist the expert representation of their client’s interests and help save their client’s money when faced with often large credit hire claims…
The Credit hire team can be contacted on:
Mark Hambling, Director: mark.hambling@rogers-norton.co.uk 01603 675637
Hannah Rudling, Associate: Hannah.rudling@rogers-norton.co.uk 01603 675621