Alex Lunnon considers the requirements for effective intervention letters in credit hire claims, and how intervention letters often still fall short of the court’s expectations.
The well-established case of Copley v Lawn & Ors [2009] EWCA Civ 580 is key in many credit hire disputes. The case outlines the necessary requirements for a court to rely on intervention letters in credit hire RTA cases, which offer a replacement vehicle while the claimant’s vehicle is being repaired. Despite the Court of Appeal’s decision being handed down in June of 2009, judges are often still choosing not to rely on intervention letters, due to determining a lack of compliance with Copley. This is interesting as defendant insurers and their car hire provider partners have had almost 17 years to develop the necessary pro forma letter to reduce the recoverable damages. Despite this, many claims fall short of Copley compliance and judges routinely reject intervention letters when giving their judgment.
Intervention letters are provided by defendant insurers to claimants when road traffic accidents occur at the fault of the defendant’s insured driver. An intervention letter will offer to provide a hire vehicle while the claimant’s vehicle is being repaired. The aim of this is to mitigate costs by the defendant incurring the cost/ loss of providing hire themselves, seeking to prevent future recoverability by the claimant from utilising the services of third-party hire companies.
It is very often the case that the offered replacement vehicles are at a lower cost than those available by a mainstream providers. A recent basic hire rate example I have come across was the offer of a replacement Vauxhall Insignia for £21 per day, when the cost incurred by the claimant in using a hire provider of their choice was £53 per day. In matters where credit hire is used, the daily rate can amount to several times more than the offered car per day.
The key points raised in Copley are:
- [9] It [the intervention letter] has an unpleasant threatening tone to it and does not even suggest that the recipient should pass it to his insurer or solicitor for advice as to its contents.
- [17] …‘any offer made by the defendant’s insurers must contain all such information as will be relevant for the claimants and their advisers or representatives to make a reasonable response… One piece of information missing from KGM’s letter was the cost to KGM of hiring the cars… if KGM could genuinely obtain hire cars more cheaply than the claimants could, it might be unreasonable to use the services of Helphire and a mitigation argument might get off the ground.
- [18] if a defendant or his insurers does make an offer of a replacement car to an innocent claimant and he makes clear that he is going to pay less for such a car than the claimant is intending to pay (or is paying) for a car from a company such as Helphire, then (other things being equal) it may well be the case that a claimant should accept that lower cost replacement.
- [32] …it is not unreasonable for a claimant to reject or ignore an offer from a defendant (or his insurers) which does not make clear the cost of hire to the defendant for the purpose of enabling the claimant to make a realistic comparison…
Judges will therefore expect intervention communication:
- To not have an ‘unpleasant threatening tone’.
- To advise the information is passed onto their insurer/ solicitors.
- To contain all the relevant information, including the cost to the defendant in hiring the car.
Judges will also take into consideration:
- Whether the hire car offered would have cost less than the car hired.
- That where it is made clear the offered hire car would cost less, it may be the case the offer should have been accepted, as not doing so would not be mitigating losses and could be seen as unreasonable.
The following are some ways in which intervention letters can still fall short of Copley, despite letters being largely compliant:
- When offering to conduct repairs in tandem with providing a hire car, it does not indicate how long the repairs will take, the location of the garage, whether collection and delivery of the claimant’s car would be provided etc.
- Not providing details as to the condition, age, milage, etc. of the hire cars offered.
- Not providing details as to the location of the hire car, when the hire car would be available, and whether delivery and collection would be provided.
- Not detailing the necessity of mitigating losses, and the consequences of failure to mitigate losses.
- Not informing as to whether the offered hire car will cost less than other providers.
Members of Becket Chambers can assist in proceedings relating to credit hire; please contact the clerks via clerks@becket-chambers.co.uk for more information.
