W v Veolia Environmental Services (UK) Plc
| Jurisdiction | England & Wales |
| Judge | Judge Mackie QC |
| Judgment Date | 27 July 2011 |
| Neutral Citation | [2011] EWHC 2020 (QB) |
| Court | Queen's Bench Division |
| Date | 27 July 2011 |
| Docket Number | Case No: 0UA03049 |
[2011] EWHC 2020 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LONDON MERCANTILE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Mackie QC
Case No: 0UA03049
Mr Christopher Butcher QC and Mr Benjamin Williams (instructed by PCJ Solicitors) for the Claimant
Mr Andrew Prynne QC and Stephen Cottrell (instructed by Weightmans) for the Defendant
Hearing dates: 22, 23 and 24 May 2011
This is another round in the continuing contest between the providers of credit hire vehicles and the insurers of defendants in motor accident claims. Two issues arise. First the defendant says that the credit hire charges are irrecoverable because of the effect of The Cancellation of Contracts Made in a Consumer's Home or Place of Work etc. Regulations 2008 ("the Regulations"). The claimant disputes this and raises the second issue which is a claim that since the hire charges in this case have already been paid questions of unenforceability under the Regulations are irrelevant and the only question is whether the payment amounted to a failure to mitigate.
The Background
This action was brought in the Central London County Court but transferred to the Mercantile Court for trial. The most surprising aspect of this case, that hire charges of over £138,000 were incurred to provide a vehicle while the claimant's car, worth about £16,000, was being repaired is not part of the dispute. There is only limited disagreement about the facts and this turns on the evidence of the claimant W who provided three witness statements and was the only live witness. As this case is in substance a dispute between insurers but involves the Claimant's financial affairs I have agreed to an unopposed request that he be referred to in this Judgment simply as 'W'. The bundles of authorities contain 58 items. I shall refer only to those cases which seem relevant.
Facts Agreed or Not Much in Dispute
The claimant is an actuary who was born in August 1942. He lives in Ennismore Gardens, London and owns a four door Bentley which is now 21 years old with a value of some £16,000. The car was involved in an accident that was not the claimant's fault in July 2008 and he had the use of an alternative car provided by Accident Exchange while it was off the road. On 12 December 2008 a refuse truck owned by the defendant struck the claimant's car while it was parked outside his home. The claimant was able to drive the car to Jack Barclay the nearest Bentley repairer. He was told that the car was not roadworthy and Jack Barclay later that day arranged for Accident Exchange to provide a replacement vehicle while the claimant's car was being repaired. The claimant said that he needed a prestige vehicle to project a "successful and professional image" in his business and when he went to the golf club. The claimant asserts that he did not have any realisable assets that would have covered the cost of hire and had significant financial commitments, matters to which I will turn shortly. Accident Exchange provided a modern two door Bentley Continental GT Coupe at a cost of £863.68 per day. The car was brought to his home where he signed a hire contract and an insurance application provided by the driver. The hire was limited to a term of 85 days. He was therefore sent a second agreement covering the period from 13 March 2009 to, as it turned out, 25 April 2009 which he signed and returned.
Despite the absence of serious damage it took 135 days for the car to be repaired. The defendant contends that the claimant failed to mitigate his damage by not pursuing repairs more vigorously. A statement from Mr Ian Bradshaw of Accident Exchange exhibits the case management notes relating to the repair. While it may be true that if W had been paying more than £800 per day from his own funds to hire a replacement he would have pursued more aggressively what was happening with the repairs to his car, the defendant's representatives were fully aware of the explanations being given and why the process was taking so long. They were paying for it but neither complained nor did anything about the delay.
The parties are agreed, see the Order of 8 February 2011, that if the claimant had hired on non-credit terms the reasonable cost of hire would have been £485 per day.
This action was brought on 15 February 2010 and when the defendant raised the issue of the Regulations. Insurers responded, in what is accepted to have been a litigation tactic initiated by Accident Exchange, by paying the claim of £138,308.43 notwithstanding that the limit of indemnity was £100,000. An accounting entry and a receipt show that sum being transferred from "Accident Exchange Limited (in its capacity as Claims Agent for Amtrust Europe Limited)" to Accident Exchange Limited. A letter to W from Accident Exchange confirms this transaction and reiterates his obligation to cooperate.
Evidence of the Claimant
W works from his home as an actuary but his earnings at the time of the accident were apparently only enough to cover the running costs of the business. He had not taken a salary for 5 years and had been under financial pressures following a divorce and other family issues. He had an overdraft limit of £30,000 and was overdrawn before the accident and afterwards. The limits on his credit cards had been reduced. He has savings which it seems are between £50,000 to £100,000. He has a state pension and a private pension bringing in some £20,000 pa in all. W owns his flat and it seems may still have some interest in a house. W's evidence about public school fee commitments in his witness statement was not accurate and he was surprisingly vague about his finances given his professional background. W is clearly a truthful person and it seemed to me that his vagueness was due to two causes. First he did not see himself as directly involved in this litigation and was not as well prepared as he otherwise might have been. Secondly I accept his evidence that while meticulous in his professional affairs his private ones are disorganised. It is the experience of the court that this is quite often the case with professional people. It is not necessary, or possible on the material available, for me to make precise findings about W's financial position. He is however far from the image conjured up when one thinks of a Bentley driver living in Ennismore Gardens. His credit cards would be unlikely to have been able to meet £485 per day. He has some capital available which could have been used to fund this hire. However, on the evidence before me that is capital which he reasonably needs to deal with possible future family commitments and to help provide for himself given that he cannot be expected to work at his profession for many more years.
W was cross examined about the circumstances in which he came to sign the hire agreement. I accept his evidence that both the hire and the insurance which came with it were obtained at the suggestion of Jack Barclay informed by W's own experience over the previous accident and because he wanted both. I also accept that the second hire agreement was made entirely by correspondence and without a visit from Accident Exchange.
The Hire Agreements
The structure of the two hire agreements is conventional. The customer assumes liability for the contractual rate of hire. That liability is deferred while a claim for the hire costs is pursued against the defendant. The charges and any resulting legal expense are insured in case they are not recovered within the deferment period. By Clause 5 Accident Exchange is given the exclusive right to pursue any claim and W is to cooperate in various ways including paying over any cheque he receives in payment of the claim. Clause 7.8 makes the Agreement the entire agreement and understanding between the parties, revokes any prior agreement and excludes reliance on representations and warranties.
The Accident Exchange policy of insurance for motorist legal expenses and replacement vehicle charges is underwritten by IGI Insurance Co Limited (now AmTrust Europe Limited) an independent onshore UK insurer. Accident Exchange was the appointed claims agent. The defendant contended in its skeleton argument, but with less emphasis at trial, that the claimant could not prove on balance that there was a relevant policy of indemnity insurance in place. There is a skilful and detailed analysis of the documents relied upon in the defendant's skeleton argument. However the structure of the insurance is no more informal than in many of the policies that come before this court and I have no reason to doubt the truth and accuracy of arrangements put in place between two regulated and reputable companies.
The policy must be read as a whole and in context but the following provisions are particularly relevant to the points in dispute:—
1. Definitions
Accident Exchange's Charges – the amounts incurred by the Insured in connection with Accident Exchange Limited's credit services (including vehicle hire charges owed to Accident Exchange Limited and any repair costs paid for on behalf of the Insured by Accident Exchange Limited) following an Insured Incident.
Limit of Indemnity – is the maximum sum that the Underwriters will pay in aggregate in respect of all Legal Costs and Expenses and Accident Exchange's Charges, being the sum of £100,000.
Period of insurance – the period which commences on the date of Issue of this Policy as shown on the accompanying schedule of cover and ends on the earliest of the following occurrences:
(a) when the legal proceedings in respect of the Claim are concluded in a court of first instance;
(b) when the Claim is concluded by negotiation by the Solicitor;
(c) when You or the Solicitor give Us notice that the Claim...
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