“Don’t nit-pick” – basic hire rates evidence in credit hire cases; Bunting v Zurich Insurance Plc [2020] EWHC 1807 (QB).

The credit hire proxy war continues apace. Bunting v Zurich Insurance Plc is the latest skirmish between credit hire companies and insurers; the case deals with the correct approach to “imperfect” basic hire rates evidence. Although Pepperall J stated that the appeal raised “no new issues of law”, the case will inevitably be regarded as useful guidance on the practical issues which frequently arise in the many thousands of credit hire cases heard by the courts.Steven Turner appeared on behalf of the Defendants.FactsThe appellant was the non-fault party in a road traffic accident in 2015. While his vehicle (a Lotus Exige Coupe) was being repaired for several weeks, he hired a Mercedes C220 Sport on credit hire terms. The total cost of hire was £28,551.84.It is apparent from Pepperall J’s judgment that, at trial, the usual issues of need, enforceability, period and vehicle type were canvassed. Need and period were conceded, and the Defendant’s arguments on enforceability and vehicle type were dismissed. The appellant was pecunious. The real issue in the case was therefore narrowed down – in a way that will be instantly familiar to credit hire practitioners – to two points: had the Defendant proved that there was a difference between the credit hire rate and the basic hire rate (“BHR”); and if so, what was it?Unusually, the Claimant called the author of the Defendant’s BHR report (Mr Rose) to give evidence. He was asked about his witness statement which, it would appear, was in the usual form. Mr Rose had not personally compiled the database of comparable basic hire rates, but had searched it and exhibited the results. He explained that he would assume that a vehicle was available unless the relevant web entry showed otherwise. If the hire period exceeded the maximum hire period in the BHR provider’s terms and conditions (as it did here), the hirer would simply have to be in touch with the company to seek another period of hire. It was his experience as a BHR surveyor that the hirer would be able to do so, at a similar rate. The hire period was 11 weeks and a day, and Mr Rose had valued the final day at one-seventh of the weekly rate. He cited his experience as the basis for that conclusion.The trial judge accepted the BHR evidence, and awarded a sum for hire based on Thrifty’s seven day rate. The total judgment sum was a small fraction of what had been claimed. The arguments on appealThe Claimant appealed. The arguments raised on appeal will be recognisable to practitioners; they are the sorts of issues that judges at County Court level are frequently asked to address.

1. Although no objection was taken to the admissibility of Mr Rose’s evidence at trial, the appellant argued that the trial judge was wrong to have accepted it, given the alleged non-compliance with the court’s directions order.
2. It was said that the judge was wrong to have applied the Thrifty rate, given their 30-day time limit for hire periods.
3. The appellant argued that the judge was wrong to have addressed the issues with the rates evidence by “rounding up” the cost of hire.
4. It was said that the judge had been wrong to find that the lack of evidence of availability (of a hire vehicle at the time of hire) was not in breach of the directions order.
5. The appellant further contended that, in any event, the judge was wrong to find that a car would in fact have been available.
6. Finally, it was said, the judge was wrong to have calculated the cost of the final day’s hire by allowing one seventh of the weekly rate.

The Defendant was represented on appeal by Steven Turner of Parklane Plowden Chambers. The Defendant’s case was that the judgment was “an impeccable application of the structured approach advocated by Aikens LJ in Pattni v First Leicester Buses Ltd [2011] EWCA Civ 1384 at paragraph 73”. That approach, it will be remembered, consists of five questions: did the Claimant need a replacement car at all; if so, was it reasonable to hire the particular type of car hired at the rate agreed; if it was, was the Claimant impecunious; if not, had the Defendant proved a difference between the credit hire rate and what, in the same broad geographical area, would have been the BHR for the model of car actually hired; and if so, what is the difference between the credit hire rate and the BHR? The decisionIt was agreed that the case fell to be decided – as cases of this sort usually do – on the basis of the fourth and fifth Pattni questions.The appeal was dismissed in its entirety. The judge had properly structured his decision in accordance with the guidance given in Pattni. Pepperall J noted that the issue of imperfect BHR evidence is “not a new problem”. His Lordship cited the line of authorities which establish that County Court judges should do their best with imperfect evidence. In the case of hire, in particular, Bent v Highways & Utilities Construction Ltd [2010] EWCA Civ 292 made it clear that appropriate adjustments were required, and that precision as to the time of hire, or the type of vehicle hired, was not required.The judge had been entitled to rely on Mr Rose’s evidence, and was entitled to find that: the hire rate was indicative of the likely hire rate throughout the period of hire; that a comparable car would have been available at the time at broadly similar cost; and that the final day would have been charged at one seventh of the weekly rate. Further, the judge’s “rough and ready” adjustments to the BHR evidence were precisely the sort of tools available to first instance judges.The appeal dealt with another important point which is frequently raised in the County Court; it was irrelevant whether or not the BHR provider required customers to pay deposits, in cases where the Claimant is pecunious.Ultimately, it was said that the appeal disclosed no error of law. The arguments raised by the appellant were characterised as attacks on the judge’s findings of fact. Indeed, they were said to amount to “nit picking”. Points for practitionersThe judgment does not, on its face, establish any ground-breaking proposition of law, and the decisions of the trial judge which were appealed were said to be decisions of fact. But the reality is that they are the same issues that determine the outcome of dozens of small claims and fast track trials in the County Court every day. The decision is binding in those courts, and it is likely that courts will start to take a more robust approach to attempts to exclude BHR evidence by “nit picking”.The case was unusual in that the author of the BHR report gave oral evidence (and yet more unusual in that that was at the behest of the Claimant). It was on the basis of Mr Rose’s evidence, both written and oral, that the trial judge reached his decisions. It is open to Claimants to argue that the same conclusions would not necessarily be inevitable in future cases, because those cases will have different evidential considerations, and the judges in those cases will be entitled to form their own opinions on questions of fact. Nevertheless, Bunting gives judges in those cases a very strong steer; the evidence may be imperfect and there may be gaps, but they are permitted (indeed, required) to do their best to reach a fair and sensible result.Finally, the appeal undoubtedly does dispose of one common argument, in relation to deposits. It is frequently argued by Claimants that basic hire rates cannot properly be compared with the credit hire service provided to a Claimant, because BHR providers require customers to pay deposits before they can hire. That argument is wrong as a matter of law; it is, in effect, an attempt to raise impecuniosity by the back door. Where a Claimant is (or is deemed to be) pecunious, his ability to pay for the BHR vehicle is assumed, and that assumption is the same whether the payment being referred to is the deposit or the hire rate itself. Paragraph 18 of the judgment has now put this point beyond doubt. A copy of the judgment can be viewed here.