Legal Update by Emily Slocombe (Pupil).
On the 6th April 2020, the updated Civil Procedure Rules will come into force. Amongst the updates is a change to the rules for car hire cases. This update comes following the Spring 2017 consultation on Credit hire claims.
The updated rules create mandatory requirements for Claimant’s pleadings in these claims.
Practice Direction 16, paragraph 6.3 and 6.4 will read:
Hire of replacement motor vehicle following a road traffic accident
6.3 Where the claim includes the cost of hire of a replacement motor vehicle following a road traffic accident, the claimant must state in the particulars of claim:
(1) the need for the replacement vehicle at the relevant time;
(2) the period of hire claimed (providing and start and end of the period);
(3) the rate of hire claimed;
(4) the reasonableness of the period and rate of hire; and
(5) impecuniosity (if the claim relates to credit hire).
6.4 In paragraph 6.3 –
(1) “relevant time” means at the start of the hire and throughout the period of hire;
(2) the obligation to state the matters there set out includes an obligation to state relevant facts.
Paragraph 8.2(8) substitutes “mitigation of loss or damage” for “a claim for mitigation expenditure”.
The intention of this update is to encourage negotiations to start earlier, so these cases use fewer court resources.
Previously Particulars of Claim in car hire cases were potentially lacking in detail over key issues. This update should provide additional information for the Defendants to assess the merits of the case and settle where appropriate.
However, the updated rules still do not require early disclosure of documents. This missing requirement could leave Defendants waiting for disclosure which might impede settlement in some instances.
Furthermore, the updated rule does not provide a specified sanction for non-compliance. The result of a Defendant challenging a Claimant’s failure to comply with the rule is currently unknown. It may be, for example, that an application to strike out for non-compliance would be opposed as too draconian.
The change to the wording in paragraph 8.2(8) reflects comments made by the Court of Appeal in Zurich Insurance Plc v Umerji  EWCA Civ 357. At paragraph 37, Underhill LJ said ‘A claim for the cost of hire of a replacement vehicle is, strictly, a claim for expenditure incurred in mitigation of the primary loss, namely the loss of the use of the damaged vehicle... The burden is thus on the claimant to prove (and therefore plead) that such expenditure was reasonably incurred’. This update brings the wording of Practice Direction 16 in line with Underhill LJ’s observations.
The consultation which led to these changes called for standard directions on rates evidence and early disclosure of all evidence in credit hire claims.
Neither of these changes have been made it. It remains to be seen whether there is more change to come for credit hire.