William James King v Andrew Daltray
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SEDLEY,LORD JUSTICE BROOKE |
| Judgment Date | 04 June 2003 |
| Neutral Citation | [2003] EWCA Civ 808 |
| Date | 04 June 2003 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B2/02/2074A |
[2003] EWCA Civ 808
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LIVERPOOL COUNTY COURT
(HIS HONOUR JUDGE MARSHALL EVANS)
Lord Justice Brooke
Lord Justice Sedley
B2/02/2074A
MR J STUART SMITH QC and MR J HAYES (instructed by Messrs Weightman Vizards, Liverpool) appeared on behalf of the Appellant/Defendant
MR M WILLEMS and MR M JONES (instructed by Messrs Clement Jones, Liverpool) appeared on behalf of the Respondent/Claimant.
When he gave judgment in the Liverpool County Court in Mr King's favour for £868,54, with interest at 7 per cent, giving a total award of £1,067.51, His Honour Judge David Marshall Evans QC gave the defendant permission to appeal on condition that he paid all Mr King's standard costs in this court, win or lose. The defendant, represented by Mr Jeremy Stuart Smith QC, has sought permission to appeal against the condition, and Tuckey LJ has directed that the application be heard in advance of the substantive appeal, with the appeal against the condition to follow if permission be granted.
Although the imposition of the condition that I have mentioned is not nearly as remarkable as the bare facts I have so far recited might suggest, the issue without doubt merits the court's attention. We have accordingly granted Mr Stuart Smith permission to appeal the condition. What follows is therefore a judgment on that appeal.
There are technical complications lurking in this. For reasons to which I will come, the judge was prepared to grant permission to appeal only if the respondent claimant was spared all risk on costs. If the condition goes, the respondent submits, so does the permission. Mr Stuart Smith submits that it is clear from what the judge said that he thought that this was a proper case for appeal regardless. I am not certain that that is right. It seems to me, on balance, that the judge was saying that it was a proper case for appeal only if Mr King was protected on costs. It may be, therefore, that the right view is that, if the condition is struck out or modified, the original grant of permission goes, but in that event Mr Stuart Smith has asked afresh for permission. I see no reason why, in such an event, that application should not be entertained.
In short, the reason why the judge imposed the costs condition was that Mr King's case was one of a batch of test cases constituting yet another battle in a protracted war between the motor insurance industry and the businesses which some years ago began offering innocent parties replacement hire cars to be paid for out of the eventual damages. It is relevant to the issue before us that Judge Marshall Evans knew a great deal from his own judicial experience about this warfare and about its impact on civil procedure.
The following paragraphs come from the opening section of a full and careful judgment delivered by him on 11th September 2002 in the six cases that he had tried over a period of six days earlier in the year.
"1. This trial represents another stage in the long and bitter struggle between the Motor Insurers who provide the (compulsorily required) third party liability cover to motorists, and the businesses which developed to provide replacement transport to innocent victims of motor accidents without requiring up-front payment for the service.
2. It has been accepted in both the House of Lords and the Court of Appeal that such businesses fulfil a real need for motorists of modest means, just as the Liesbosch doctrine was long ago modified to recognise that such persons —or even persons of substantial means with expensive motor cars —were not normally in a position to purchase a replacement car immediately but were compelled to wait until they were paid the value of their destroyed vehicle by the relevant insurers.
3. It has long been trite law that when your chattel has been damaged by a tortfeasor you are entitled to damages for loss of use, which are to be measured when a temporary replacement is required while repairs are carried out or until permanent replacement by the cost of hire. But car hire charges are substantial and are normally required up front. In consequence many motorists —probably the majority —whose budgets are tight were in practice unable to afford to hire a replacement vehicle, even when the circumstances of the accident were such as effectively to guarantee ultimate recovery from the insurers of the tortfeasor. In consequence the motor insurers must for many years have been called on to meet only a small proportion of car hire claims —and very few for long periods of hire when they were dilatory in paying out the value of the destroyed car, since the sums involved became too frightening for all but the most financially brave and secure.
4. Bearing in mind that there is a high proportion of accidents where the total liability of the guilty party is obvious and that our legal system provides for the recovery of the successful claimant's costs, schemes developed under which vehicle providers effectively took the risk of inability to recover the cost of temporary replacement vehicles from the tortfeasor while providing transport at no up-front cost to the victim. These may, as in the majority of cases with which I am concerned, have been connected with or part of 'before the event' (BTE) legal expenses and other insurance cover, or have been a form of (whether expressly or not) 'after the event' (ATE) cover —now expressly given statutory authority in respect of legal costs.
5. The inevitable result of such schemes was to multiply the number of substantial claims, or claims at all, for replacement vehicles. In fairness to the motor insurers such claims had not been part of their past claims experience factored into their premiums. Regrettably hostility was increased because some schemes were undoubtedly exploitative, displaying greed on the part of the vehicle providers at the anticipated expense of the motor insurers by supplying poor vehicles at inappropriately high charges.
6. Battle on the schemes was therefore joined. The failure of the insurers on champerty and their success on the Consumer Credit Act in Dimond v Lovell (2000) 2 WLR 1121 have been described by the Court of Appeal in Clark v Ardington, paragraph 1, where it was pointed out that Lord Hoffmann described it as 'a technical defect which more sophisticated drafting can easily correct'. But the principal feature of these cases before me is that Mr Stuart Smith for the motor insurers sets out to prove Lord Hoffmann wrong.
7. However that may be, the reality so far is that Dimond v Lovell has proved the high water mark of the motor insurers' success against the vehicle providers since when the motor insurers' fortunes have been in retreat — Seddon v Tekin (2001) GCRR 2865 and now Clark v Ardington where there was a major defeat on the arguments of sham or pretence, credit repair, delay by repairers, calculation of rates, mitigation, a small point on prescribed terms and some other matters, although the motor insurers succeeded on certain other matters.
8. As has been pointed out in Clark there are still thousands of county court cases awaiting decision on a variety of arguments, and in this context the Woolf reforms have been frustrated in relation to these largely small claims track cases by the uncertainty of the law and the complexity of what should at most have been disposals conducted on paper after interlocutory judgment on liability. As it is there remain large practical problems which from one point of view at least are exacerbated by the restricted costs regime in the SCT. In common no doubt with His Honour Judge Charles Harris QC who as designated civil judge heard the previous test cases of Seddon and Clark I am reasonably well informed about the extent to which these problems have hampered work in the Liverpool group, where Birkenhead in particular has a large volume of these cases. I have accordingly dealt with many of the arguments on appeals from district judges.
9. The purpose of this test litigation before me was clearly set out pursuant to the submissions of counsel in my order of 18 October 2001 which states:
A.
It is the court's intention to create a framework for the resolution of the major issues which arise between accident hire companies, in particular, but not exclusively, those colloquially known as the 'Hamco' companies and insurers indemnifying defendants in road traffic accident cases.
[For the better identification of the organisations in reality concerned in and affected by the decision in this test litigation there are annexed hereto two appendices. Appendix 1 is a list of Hamco 'Associated' Hire Companies. Appendix 2 is a bundle of documents comprising a list of signatory insurers to the Morgan Cole initiative and a list of those insurers who have given an undertaking to the Court of Appeal to be bound by the outcome of test case litigation in the credit hire initiative.]
B.
The court has identified various issues which arise or may arise in such cases, including:
(a) whether credit is advanced.
(b) prescribed terms;
(c) rates of hire;
(d) interest.
10. It is important to note that this formulation —advanced by counsel —emphasises the reality that their chosen cases are in fact the battleground between major commercial interests. I have been told that substantial seven figure sums depend on the outcome of these —and other —issues, effectively in relation to Hamco alone."
13. Let me say at once that King is a completely different case from the others. It is an...
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