Irving v Sindall: Why oral assurances to a claimant provide no comfort to a defendant
17 May 2018
As Giles v Thompson  1 AC 142 reaches its twenty-five year anniversary, credit hire has again made it to appellate level, this time before Mr Justice Turner in Katherine Ann Irving v Morgan Sindall PLC  EWHC 1147 (QB).
In a judgment handed down on 15 May 2018 Turner J has considered whether or not oral assurances to a Claimant, that he or she will not be required to pay the credit hire charges if the case is lost, serve as a bar to recovery from the Defendant. At first instance, cross-examination and subsequent questioning from HHJ Saffman led to concessions from the Claimant that a) she thought the charges would be recovered from the third party insurer; b) she would not have been able to pay the charges; and c) she was told that if she lost, “there’d be no fees at all like, nothing to pay”.
In light of the Claimant’s oral evidence, HHJ Saffman held that she was not obliged to pay the hire charges and dismissed that element of the Claimant’s claim. Turner J disagreed, following consideration of a number of authorities including Harlow & Jones Ltd v Panex (International) Ltd  2 Lloyd’s Rep 509. Turner J noted the comment in Giles v Thompson that “it does not relieve the defendant of liability if the plaintiff’s liability to pay charges to a third party is contingent on his recovery against the defendant”. This issue of contingent liability can be tested by asking whether, if hire charges are recovered, the Claimant would be over-compensated. In this case, Ms Irving would not have been and HHJ Saffman was wrong to conclude that “the assurances given to the Claimant, even taken at their highest, were such as to compromise her claim for credit hire charges against the defendant”.
Finally, Turner J also considered the issue of impecuniosity. The Claimant had a basic wage of £472 per month, which rose to approximately £700 per month with (fluctuating) overtime. She had savings of £250 and a credit card limit of £500. HHJ Saffman found that she could have raised approximately £900 and paid the pre-accident value of £775. Turner J overturned this decision; there had been a failure to consider that a) in the time taken to obtain a new vehicle, the Claimant would have been entitled to hire a car at the basic rate and thus both the capital PAV cost and the hire charges must be taken into account; and b) by reducing her capital to the bare minimum, the Claimant would have exposed herself to serious financial challenge, even in the event of a modest unexpected incident. Turner J relied upon the test of ‘unreasonable sacrifices’ as per Lagden v O’Connor  1 AC 1067.
This case should finally put an end to the question of whether such oral assurances, amounting to a requirement to pay contingent upon recovery from the Defendant, override the written hire agreements. With many such cases having been dismissed on these grounds, claimant representatives will rightly arm themselves with this judgment and defendants should no longer expect such concessions to lead to victories at trial.
The Defendant was represented by Steven Turner of Parklane Plowden Chambers