Solicitors Review Recent County Court Decision Around Credit Hire Claims

HHJ Gosnell (sitting on appeal in the Leeds County Court) has recently held that a Claimant’s credit hire agreement was enforceable despite arguments from the Defendant to the contrary. In one of the first decisions since Irving v Morgan Sindall [2018] EWHC 1147 (QB), Head of Litigation Adam Thorpe and Solicitor Lee Kipling review the outcome.

In one of the first appeals since Irving v Morgan Sindall [2018] EWHC 1147 (QB), HHJ Gosnell sends a strong message to Defendants that arguments of credit hire enforceability are doomed to fail.

On 23rd July 2018, in the Leeds County Court, HHJ Gosnell heard an appeal brought by Mr. Morris against the dismissal of his hire credit hire claim on the grounds of enforceability.

In the hearing below, DJ Ellington had held that “The nub of his case is as to whether the claimant entered into an agreement with those who provided the car that, although he did not have to pay anything up front, he would ultimately be liable for the full cost of this hire if the court, for some reason, did not award him those damages.  Having reviewed the documents on which the claimant relies, and having heard the evidence he has given, I am quite satisfied that there is no enforceable contract between himself and anyone else connected to this case which would or could require him to pay £21,000 in hire charges or in any other sum.”  

Allowing the appeal, and substituting DJ Ellington’s order with a judgment for the full hire charges, HHJ Gosnell held that there was “clear evidence of a claimant having signed a credit hire agreement knowing what he was signing and accepting that there might be a residual obligation to pay the hire costs if there wasn't successful recovery from the third party”

HHJ Gosnell also held that even if the Claimant was given an unguarded assurance about their liability to pay the hire charges, that would amount to no more than a collateral warranty.

Finally, HHJ Gosnell accepted the Claimant’s argument that Bee v Jenson [2007] EWCA Civ 923 would apply in any event. Even if the Claimant had by virtue of the agreement being held unenforceable, been given a free car, that would not prevent recovery of the costs of hire.

This decision is a further blow to the Defendant’s challenges to credit hire claims.

Interestingly, in the recent case of Dix v Zurich Insurance heard on 18th July 2018, HHJ Saffman (his decision was the one which was overturned by Turner J in Irving), was once again asked to consider the enforceability of a Claimant’s credit hire agreement. Dismissing the point, HHJ Saffman stated “Enforceability is not really an issue in light of Irving v. Morgan Sindall. Enforceability arguments may have had their day in light of Irving.”

The decisions in Irving, Morris and Dix show that issues of credit hire enforceability are now given short thrift by the Courts, and Defendants should be encouraged to put the point to bed once and for all.

Article written by Adam Thorpe (Head of Litigation) and Lee Kipling (Solicitor) at Winn Solicitors.

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