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Arthur Clelland v. Quinn Direct, Sheriff C.N.R. Stein, Arbroath Sheriff Court, 22 October 2010


On 27th September 2007, the pursuer's TVR Tuscan Mark 1 fibre-glass motor vehicle was parked and unattended, when the defender's insured collided with it while attempting to reverse park. The collision caused damage to the pursuer's vehicle, specifically its paint and bodywork. At the time of the accident, the pursuer's vehicle was worth £18,000.

Reluctant to involve his own insurers because of the possibility of increased premiums, the pursuer agreed to engage the services of Accident Exchange Limited, and entered into a Vehicle Rental Agreement with them on 17th October 2007. Accident Exchange Limited was a company who specialized in handling non-fault claims for owners whose vehicles had been damaged through the negligence of others, who preferred not to involve their own insurers. Their charges were agreed in court to be very significantly in excess of conventional claims.

At the expiry of the rental agreement, the pursuer was bound to pay the hire charges in full, together with interest during the period that the charges remained outstanding. These were unpaid, and the pursuer sought the defender to make payment, along with damages in respect of the loss he suffered as a result of the accident.

The defenders disputed quantum, arguing that the pursuer had hired a replacement vehicle on credit from a company which charged far in excess of hiring on spot market value. It was submitted that therefore the whole costs of this hire agreement were not recoverable. Moreover, the vehicle was provided with an entire re-paint job, rather than re-painting in only the damaged areas, therefore there had been some betterment of the vehicle which the defenders were not liable to pay for.

On behalf of the pursuer, it was submitted that he was “impecunious” in the sense explained in Lagden v O'Connor 2004 1 AC 1067, namely that he would not be able to afford to pay hire charged quoted by local hire companies at a spot rate, without incurring “unreasonable financial sacrifice”. Therefore, it was necessary to hire a vehicle on credit. In reply, the defenders submitted that the pursuer was a company director, with a combined family income in excess of £100,000, and therefore he could hardly be characterized as the type of “impecunious” individual for whom it would be an unreasonable financial burden to meet spot-hire rates.

After hearing evidence, the Sheriff noted that hiring a vehicle from Accident Exchange Limited was not the pursuer's last resort, and found he clearly had a choice. The court found that the pursuer was clearly in a position to hire a vehicle on the spot market, through his credit card. The court found that the pursuer had failed to mitigate his losses in this regard. However, in granting decree of the remaining damages sought, the court noted that it was reasonable for the pursuer to hire a replacement vehicle, and moreover for his entire car to be re-painted in full, following evidence led from the professional painters. While the court acknowledged that the re-painting had given rise to some degree of betterment of the vehicle, the court deemed this benefit to be incidental and unavoidable.

Accordingly, the Sheriff granted decree to the pursuer of the sum of £11,684.50.