09 Motor Claims Rodney Wilson Andrew Hibbert · Rodney Wilson Partner, BLM Liverpool 20 November...

Motor focus

Presented by

Rodney WilsonPartner, BLM Liverpool

20 November 2008

Andrew HibbertPartner, BLM Southampton

27 November 2008

Motor claims update_MGB, PNG, PEN_(RAW, ACH) 11/08 1

Pedestrian claims

1 Introduction

a. Vulnerability

Pedestrians are the most vulnerable of all road users. This is because:

§ When crossing a road, they are at risk from contact with a moving vehicle

§ They often find it difficult to anticipate the speed of oncoming traffic

§ They lack the speed that may enable them to take evasive action

§ Apart from those at work, they seldom wear clothing or carry equipment that enhances their visibility

§ If a moving vehicle strikes them, they have no external protection and may suffer serious injuries

§ Children, the elderly and disabled persons are particularly at risk

b. Accident statistics

The table below summarises reported pedestrian casualties in Great Britain for the five-year period from 2002 to 2006. [Source: Department for Transport: Road Accidents Great Britain 2007.]

Year Killed Killed or seriously Injured All severities2002 767 8472 37,4892003 769 7803 35,0752004 666 7344 33,6382005 667 6981 31,9752006 673 6872 29,905

2 The driver’s duty of care

a. General duty of care

The driver of a motor vehicle owes a duty to use reasonable care and skill towards other road users whom he could reasonably foresee as likely to be affected by his actions. This is derived from the judgment of Atkin LJ in the landmark case of Donoghue v Stevenson [1932] AC 562, who said: ‘You must take reasonable care to avoid acts or omissions which you can reasonablyforesee would be likely to injure your neighbour.’ He defined ‘neighbour’ as: ‘. . . persons who are so closely and directly affected by my act that I ought to reasonably have them in contemplation when I am directing my mind to the acts or omissions which are called into question.’


Although this case was concerned with product liability it has application to all cases based on negligence. The primary requirements are:

§ A duty of care owed between the parties;

§ A breach of that duty; and

§ A foreseeability of damage (including injury) arising from the breach

b. Status of the Highway Code

The Highway Code is a useful guide to the conduct of a reasonable road user (driver or pedestrian). Section 38(7) of the Road Traffic Act 1988 states: ‘A failure on the part of a person to observe a provision of the Highway Code shall not of itself render that person liable to criminal proceedings of any kind but any such failure may in any proceedings (whether civil or criminal…) be relied upon by any party to the proceedings as tending to establish or negative any liability which is in question in those proceedings.’

In Wakeling v McDonagh [2007] EWHC 1201(QB), Mackie J said (relying on Powell v Phillips[1972] 3 All ER 864) that a breach of the Highway Code, if established, did not create a presumption of negligence but was merely a factor to be taken into account when considering the issue.

c. Pedestrian crossings

In addition to rules in the Highway Code, there are also certain statutory requirements for drivers approaching pedestrian crossings. Failure to comply with the statute is a criminal offence. These include:

§ Drivers must give way when someone has moved onto a zebra crossing. [Reg. 25, Zebra, Pelican and Puffin Pedestrian Crossings Regulations and General Directions 1997 (SI 1997/2400)]

§ Drivers must stop when the red light shows on a Pelican crossing and must give way to pedestrians on the crossing if the amber light is flashing. [Regs. 23 and 26]

3 Res ipsa loquitor

a. The legal maxim

Literally translated, res ipsa loquitor means ‘the situation speaks for itself’. There are three criteria involved (see Scott v London and St Katherine’s Docks (1865), a case where some bags of flour fell out of an upper window and injured the claimant):

§ The happening of an occurrence which cannot easily be explained and the cause of it is unknown;

§ The occurrence would not have happened had it not been for the lack of proper care;

§ The defendant must have been in control of the situation


In Ratcliffe v Plymouth and Torbay HA [1998] Lloyd’s Rep Med 162, Hobhouse LJ said: ‘Res ipsa loquitor is not a principle of law; it does not relate to or raise any presumption. It is merely a guide to help identify when a prima facie case is being made out.’

b. The effect of the maxim

It is sometimes claimed that res ipsa loquitor effectively reverses the burden of proof but this view is now questioned. It is perhaps more correct to say that it raises an inference that the defendant may have been negligent and that he should provide an explanation as to exactly what happened. An example of this is in Ward v Tesco Stores [1976] 1 WLR 810, where a customer slipped on spilled yoghurt on the supermarket floor. Tesco were unable to explain how long the yoghurt had been on the floor.

A motor case in a similar situation was In Widdowson v Newgate Meat Corporation (1997), The Times, 4 December 1997, PIQR P138. The claimant was walking along a dual carriageway when he was knocked down by the defendant’s van. The Court of Appeal held that the defendant had failed to explain away the prima facie inference of negligence. They found for the claimant but subject to 50% contributory negligence.

4 Contributory negligence

a. The Law Reform (Contributory Negligence) Act 1945

Section 1(1) of the Act says: ‘Where any person suffers damage as the result of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.’

In Davies v Swan Motor Co Ltd [1949] CA, 1 All ER 620, Lord Denning said there are two aspects of apportioning responsibility between the claimant and defendant:

§ The respective causative potency of what they have done; and

§ Their respective blameworthiness

In Pitts v Hunt [1990] 3 All ER 344, the Court of Appeal held that a finding of 100% contributory negligence is logically unsupportable. The 1945 Act operates on the premise that there is fault on both parties, therefore responsibility should be shared.

b. Pedestrian’s duty to take care

In Davies v Swan (see 4.1) Lord Denning said that in considering contributory negligence on the part of a pedestrian, the appropriate test was said to be: ‘When a man steps into the road he owes a duty to himself to take care for his own safety…’


c. Apportioning blame

In Baker v Willoughby [1969] 3 All ER 1528, the claimant pedestrian saw a car approaching 100 yards away from his right and thought he had time to cross. He walked to centre of road and paused to look left when he was hit by defendant’s car travelling from his right. The Court of Appeal apportioned liability 50/50 on the basis that each party should have seen the other, but the House of Lords allowed the claimant’s appeal and changed the apportionment to 75/25 in favour of the claimant.

This was on the basis that a pedestrian was rarely a danger to anyone else and that he had to look to both sides as well as forwards. A motorist did not have to look sideways and if he failed to keep a look out the consequences could be disastrous. It was quite possible therefore for a motorist to be much more to blame than the pedestrian.

In Eagle v Chambers [2003] EWCA Civ 1107, Hale LJ said:

§ ‘A car can do so much more damage to a person than a person can usually do to a car’

§ ‘The potential ‘destructive disparity’ between the parties can be readily taken into account as an aspect of blameworthiness’

§ ‘It is rare indeed for a pedestrian to be found more responsible than a driver unless the pedestrian has moved suddenly into the path of an oncoming vehicle’

In Lunt v Khelifa [2002] EWCA Civ 801, Latham LJ said: ‘The court has consistently imposed upon the drivers of cars a high burden to reflect the fact that the car is potentially a dangerous weapon.’

d. Reaction time

When assessing the respective blameworthiness of the parties it is often relevant to consider how much time the driver had to react to the presence of the pedestrian. The normal thinking and stopping distances are shown in the table below [source: Highway Code, rule 126].

Vehicle speed(mph/kph)

Thinking and braking distance(feet/metres)

No. of car lengths

20/32 40/12 330/48 75/23 640/64 118/36 950/80 175/53 1360/96 240/73 1870/112 315/96 24

These distances should be increased in adverse weather conditions. The vehicle figures should be compared to a normal walking speed which is about 1.5 metres per second. Where this may be a crucial factor on liability, a defendant may wish to instruct an accident reconstruction expert to make the necessary calculations.

In Ehrari v Curry Moses J said that the judge was entitled to rely on the Highway Code but if defendants wished to challenge the thinking and braking distance, they should introduce expert evidence to prove that the Code was in error.


Reaction times may be relevant in the following circumstances:

§ A defendant might not be liable if he can show that there was insufficient reaction time from the moment when he should have first been aware of the pedestrian

§ Even if the defendant’s speed was excessive, he might be able to argue that the accident would still have occurred at a lower speed

§ A defendant is likely to be found liable if he was not keeping a proper lookout for pedestrians

§ A driver should be aware of children hovering by the side of the road

§ If a driver is in collision with someone on a pedestrian crossing, he may still be liable even if there was no opportunity to avoid a collision

§ A defendant may still be liable if his speed was less than the maximum limit

e. Negligence of children

Contributory negligence by children is a difficult area. Children are not expected to be as careful as adults and the consequential standard of care to be expected of them may not be as high. The age of the child is obviously an important factor but no clear line is drawn. As Butler-Sloss LJ remarked in Mullin v Richards [1998] 1 All ER 920: ‘The law does not arbitrarily fix upon any particular age for this purpose and tribunals of fact may well give effect to different views as to the age at which normal adult foresight and prudence are reasonably to be expected in relation to any particular sets of circumstances.’

The test of foreseeability of damage is an important consideration. In Mullin, two schoolgirls were involved in a play sword fight with plastic rulers, one of which broke and damaged the sight of the claimant. The Court of Appeal considered an Australian case: McHale v Watson(1996), where it was stated:

‘. . . the standard by which his conduct is to be measured is not that of a reasonable adult but of a child of the same age, intelligence and experience.’

The court also considered the words of Salmon LJ in Gough v Thorne [1996] 1 WLR 1387: ‘The question of whether the [claimant] can be said to have been guilty of contributory negligence depends on whether any ordinary child of 13 can be expected to have done any more than this child did. I say ‘ordinary child’. I do not mean a paragon of prudence; nor do I mean a scatter-brained child; but an ordinary girl of 13.’ In Mullin, the appeal court held there was no negligence on the part of the defendant child and no contributory negligence by the claimant.

f. Road traffic cases concerning child pedestrians

In James v Fairley, EWCA Civ. 162, the claimant, who was 8 years old at the time, was attempting to cross a 3-lane A road. She had crossed the first lane safely but was hit by the defendant’s car as she attempted to cross the second one. The claimant had left a friend and her younger brother on the pavement but the Court of Appeal said that they were doing nothing that would cause a prudent driver to brake. They supported the trial judge’s finding that the defendant was not negligent in failing to see the child until she was virtually in his path. The trial judge had said that if he had found for the claimant, he would have apportioned blame with 60%


contributory negligence. Ward LJ said that this assessment may be unsupportable but it by no means tainted the judgment as a whole. It is not clear what he had in mind when he used the word ‘unsupportable’. Did he mean that 60% was too high or that a child of eight should not be held to be negligent? Regrettably, the claimant sustained such severe injuries that she was unable to give evidence at trial about her education and experience in road safety. Although most primary schools teach the Green Cross Code, it is difficult to imagine a situation where a child of eight would be blamed.

In J (A Child) v West, CA, 12 July 1999 (judgment available on Lawtel), the claimant, aged 9 at the time, had been larking about on a narrow pavement with other children. He reacted to the possibility of being hit by one of them by jumping off the kerb into the path of a truck driven by the defendant. On appeal, the defendant accepted the trial judge’s finding that he had been driving too fast and too close to the kerb and that a reasonable motorist would have guarded against the well-known risk of children larking around. The issue before the Court of Appeal was whether there was any contributory negligence. Two of the appeal judges found that a nine-year-old should not be to blame for jumping into the road as he did. Judge LJ said that at worst it was momentary inadvertence and he did not consider that such behaviour in a boy of nine and a half should be criticised as negligent.

In a dissenting judgment, May LJ said that larking around was an obvious risk and the claimant, young though he was, should have appreciated this if he had stopped to think about it. He assessed the boy’s fault at 20%.

In Morales v Eccleston [1991] RTR 151, CA, an 11-year-old boy was playing with a football adjacent to a busy street. He lost control of the ball and followed it into the street without looking in either direction. The defendant was driving at 20 mph on the opposite side of the road to which claimant was walking. The trial judge had found the defendant 80% to blame for failing to keep a proper lookout and the child 20%. But the Court of Appeal said that this apportionment was wholly and substantially wrong. McCowan LJ said that the claimant’s actions showed a reckless disregard for his own safety and his blameworthiness, even taking account of his age, was considerably greater than that of the defendant. The apportionment was changed to 25/75 in favour of the defendant driver.

In Armstrong v Cottrell [1993] PIQR 109, the claimant, a 12-year-old girl attempted to cross a busy main road. She hesitated in middle of road before suddenly darting into path of defendant’s vehicle. The trial judge had found the claimant totally to blame but this was challenged on appeal. Russell LJ said that the defendant had already seen the claimant and her friends hovering at the side of the road, obviously intent on crossing about 400 yards before the collision took place. This was a situation fraught with danger and she could have sounded her horn, slowed down and applied the brakes moderately. He would bear in mind the age of the claimant but assumed she would be familiar with at least the basic elements of the Highway Code. (She was not able to give evidence because of her severe injuries). But the culpability of the claimant is not realistically compared with that of the defendant. The claimant’s contribution was assessed at one third.

In Melleney v Wainwright [1997] EWCA Civ 2884, the claimant, aged 11, had attempted to cross a main road with two friends. The two friends ran across the road whilst he stayed on the kerb. Then suddenly, he dashed out in front of the defendant, as he was about to drive past. The driver was doing 30 mph. in a 60 mph. zone. The Court of Appeal held that a very high standard of care is needed when motorists drive by young children, as there is a risk of them doing something silly. They supported the trial judge’s decision in finding for the claimant, subject to a deduction of one third for contributory negligence, having regard to the decision in Armstrong.


In Honnor v Lewis [2005] EWHC 747 (QB), the claimant was an 11-year-old boy who was seriously injured when crossing a road. Silber J held that the car driver was negligent for failing to see the boy standing on the pavement and then starting to cross the road when he had a clear view. He should have slowed down and sounded his horn. But the claimant was also negligent for failing to see the approaching car. A child of his age should have realised the need to keep a careful lookout and/or misjudging the distance. Armstrong and Melleney were considered. The claimant was found to be 20% to blame.

In Britland v East Midland Motor Services Ltd [1998] EWCA Civ 590, the claimant, a 12-year-oldboy ran along pavement for between 10-12 yards before veering right through parked cars to run across road. He would have been well aware that there were a number of children around at the time. The claimant was reckless but the defendant driver of a school bus ought to have noticed the claimant running on the pavement and slowed accordingly. The appeal court did not interfere with the trial judge’s finding that the defendant was 25% to blame.

In Rooke v Liston, [1999] EWCA Civ 749, a 16-year-old boy was seriously injured when attempting to cross the main A2 road in Kent. The defendant car driver had admitted that he had not seen the claimant until his car hit him. Witnesses said that he had not braked until after the collision. The Court of Appeal held that the defendant should have seen the claimant well within the time needed to brake and stop and held the driver primarily to blame. But the claimant was neglectful of his own safety in going on to the roadway when he knew that he could not get off it and he was found to be one-third to blame.

In Ehrari v Curry [2007] EWCA Civ 120, the claimant, a 13-year-old girl, stepped out from between parked cars in a busy street and was in collision with a lorry. The Court of Appeal upheld the trial judge’s finding of 70% contributory negligence on the part of the pedestrian. Although the lorry driver was faced with an emergency, it was held that as other children were present on the pavement, he should have kept a careful lookout and could have swerved to avoid or lessen the impact.

g. Adult pedestrians

In Kozimor v Adey [1962] 106 Sol Jo 431, the claimant ran on to an uncontrolled crossing in front of vehicle travelling at about 25mph and about 15 yards away. The defendant braked but could not avoid the claimant. The defendant should have anticipated such an occurrence but the claimant was found 75% to blame.

In Jamnezhad v Smith, CA, 30 November 1998 (judgment available on Lawtel), the defendant motor cyclist was making a left turn out of Kensington High Street as the claimant was attempting to cross the main road from the defendant’s offside. There was a pedestrian crossing nearby and the Court of Appeal thought that he should have used it. He should also have kept a proper look out. The trial judge’s assessment of contributory negligence (15%) was increased to 40%.

In Spiller v Brown [1999] EWCA Civ 1890, the claimant attempted to cross a road directly in front of stationary bus and had not waited until the bus moved off. The defendant was driving in the same direction as the bus and overtook whilst it was stationary at bus stop. The defendant had failed to keep a proper look out but the claimant had not heeded the Highway Code, which warns against crossing behind or in front of a bus. The Court of Appeal held that both parties were equally to blame.

In Ingram v Woodhouse [2001] EWCA Civ 1057, the claimant was walking along the grass verge of an A road and, when the verge ended, she attempted to cross the road. As she did so,


she saw the defendant’s car approaching round the bend. She paused but then continued to cross. The defendant driver saw the claimant and, instead of taking emergency braking action, tried to steer around the claimant but collided with her in the middle of the road. The Court of Appeal considered that the defendant was primarily to blame as her reaction was not that of a reasonably competent driver. The claimant was found 30% to blame.

In White v Chapman, QBD, 15 May 2001 (judgment on Lawtel), the defendant was primarily liable but the High Court judge found that the claimant was 20% to blame for the manner in which she crossed the road. It appeared that she attempted to do so in stages. Whilst she was not negligent for failing to use a crossing, she was negligent for crossing the road where there was no central island or marked neutral zone, without ensuring that she could cross without pausing in the middle of the road (where her safety depended wholly on the skill of approaching drivers).

In Goddard & Walker v Greenwood [2002] EWCA Civ 1590, the two claimants were jogging on the A20 in Dover. They were crossing the road at a light-controlled crossing (not a pelican crossing with a flashing amber sequence). The lights changed to green in favour of the defendant’s vehicle, but his view to the nearside was restricted by a lorry on the inside lane. As he passed the lorry, its driver sounded his horn and at that point, he saw the two pedestrians, but was too late to avoid hitting them. The Court of Appeal held that the fact that the lights were on green did not exonerate the defendant, especially as the lights had just changed and the lorry had not moved. A reasonably careful driver would have anticipated that there may have been a pedestrian on the crossing in these circumstances. The defendant was at fault but thecontributory negligence of the claimants, who had crossed against the lights, was of a very high order and they were held to be 80% to blame.

In Wells v Trinder [2002] EWCA Civ 1030, the claimant was struck by the defendant’s car whilst crossing a road in the dark. The defendant was primarily liable as he was travelling too fast and should have been using full beam headlights at the time. He also failed to see the claimant until he was about 10m. away from her. However the claimant was also criticised for failing to see the vehicle when she crossed. The Court of Appeal apportioned liability on a 75/25 basis in favour of the claimant on the ‘lethal machinery’ principle in Baker v Willoughby

In Adjei v King [2003] EWCA Civ 414, the deceased was killed when in collision with a coach as he attempted to cross the A5 in London. Although the coach was not being driven too fast (about 25 mph), a motorist travelling in the same direction had seen the deceased in the road and the coach driver should have slowed down or given some warning. But the Court of Appeal said that the deceased’s manner of crossing the road was inconsistent with a reasonable regard for his own safety. Contributory negligence was assessed at 40%.

In Rose v South East London and Kent Bus Co Ltd [2004] EWHC 1106 (QB), the claimant was attempting to cross a busy main road divided by a traffic island. There was a pelican crossing nearby but the claimant chose to cross elsewhere. When she reached the traffic island she found it was railed off except for the gap at the pelican crossing, so she decided to walk along a narrow raised strip to reach the gap. The bus driver, who was in a queue of heavy traffic noticed her doing this and as she reached the gap, she slipped into the roadway and was struck by the bus. The Deputy High Court Judge said that the driver should have checked to see if she had moved out of the roadway before moving forward. But the claimant was also blamed for putting herself at risk in this way. Liability was apportioned on a 50/50 basis.


h. Drunken pedestrians

The vulnerability of pedestrians is heightened when they are affected by too much alcohol. The problem is that in their drunken state they probably think that they are invulnerable and take little heed of normal road safety precautions. Unfortunately for the driver, they are just one more hazard to be aware of, perhaps regarding them in the same light as young children. Furthermore, the courts seem unwilling to place all the blame on the pedestrian, even in cases of extreme drunkenness. The following cases are examples of the attitude taken by the courts in these situations.

Green v Bannister [2003] EWCA Civ 1819 is probably the most extreme example. The defendant had reversed at night from a parking spot outside her home in a cul-de-sac. The road was lit by a single sodium street lamp and as she reversed for about 35 yards, she was looking over her right shoulder (i.e. on the offside) to avoid parked cars. As she did so, she reversed over the claimant, who was lying in the road way in a drunken stupor. The defendant was criticised for not paying particular attention to what might have been in the car’s path. She ought also to have checked her nearside mirror and looked over her left shoulder. However the claimant was the more blameworthy of the two and the court made a 60/40 apportionment in the defendant’s favour.

Parkinson v Dyfed Powys Police [2004] EWCA Civ 802 was an application by the Chief Constable to appeal against the trial judge’s apportionment of liability. The claimant walked out past a parked taxi into the path of a car driven by a police officer. The claimant was under the influence of alcohol and stepped out when he could and should have been aware of the vehicle. On the other hand, the police officer was driving at 40 mph late at night past a parked car in a built-up area and should have anticipated that there may have been pedestrians about in this condition. The trial judge apportioned responsibility at 65/35 in favour of the claimant. The judge had said that in terms of relative causative potency, the police officer’s fault was significantly greater. Without fault on the claimant’s part there would have been no accident but the more serious injuries would have been avoided altogether if the police car had been driven at an appropriate speed. The Court of Appeal said that the trial judge had not erred and permission to appeal was refused.

In Eagle v Chambers, the claimant, a drunk and emotional 17-year-old girl, was weaving along the side of the road. Other drivers had seen her and had urged her to stop. The defendant, who was just on the drink driving limit, collided with her. The Court of Appeal changed a contributory negligence assessment of 60% down to 40%.

In Lunt v Khelifa the claimant stepped out into the road when the defendant’s car was about 20 to 25 yards away. The police evidence showed that the claimant had a blood-alcohol level that was about 3 times the permitted limit for drivers. The trial judge found that the claimant was one-third to blame and the Court of Appeal declined to interfere with this apportionment.

In Cook v Thorne and Parkinson [2001] EWCA Civ 81, the claimant got out of the second defendant’s car to be sick due to excess alcohol. It was dark and the road was straight and unlit. The driver also got out of the car but left his headlights on full beam and did not switch on his hazard lights. The claimant, who was in the roadway, was struck by a car coming in the opposite direction, driven by the first defendant. The Court of Appeal upheld the trial judge’s apportionment of liability. The claimant was found to be 30% to blame, and the balance of liability was shared on a 70/30 basis between the two defendants with the first defendant taking the major share.


5 ‘All or nothing’ cases

This chapter reviews case law involving injury to pedestrians where the driver was not found to be at fault or where the driver was 100% to blame (i.e. there was no contributory negligence of the part of the pedestrian).

a. Driver 100% to blame

In M v Rollinson, York County Court, 14 March 2002, the father of the claimant (who was 5 years old at the time) had taken her to buy an ice cream from a van. He had given the ice cream to her and she had run around the front of the van whilst he was paying for it. The defendant had been travelling at only 15 mph but the County Court judge felt that this was not slow enough in the circumstances.

In Thomas v Kostanjevec [2004] EWCA Civ 1782, the pedestrian, who was killed in the accident, was crossing a road near a bend when he was in collision with a motorcycle. It was agreed that this was a safe place to cross and when the claimant started off, the road was clear. The motorcyclist should have anticipated possible obstacles when negotiating the bend in the road and should have reduced his speed accordingly.

In Sang v Cornes [2005] EWHC 203 (QB), the claimant was crossing a road when she was in collision with a van driven by the defendant. He was convicted of careless driving and admitted liability but alleged contributory negligence. Dobbs J said there was no contributory negligence as she had crossed at the safest place and had exercised reasonable care.

In Dawes v Aldis [2007] EWHC 1831 (QB), the defendant, who was disqualified from driving,was in a stolen car and was trying to elude the police. He collided with the claimant when driving at 50 mph on the wrong side of the road. He alleged that the claimant was standing inthe road and he could not take evasive action, but Eady J said there was insufficient evidence to decide what happened and the court was unable to draw an inference of contributory negligence.

b. Driver not at fault

In Norris v Tennant-Smith, CA, 17 July 1998 (judgment on Lawtel), the defendant driver braked and swerved to try and avoid hitting a pedestrian who had walked out into the road in front of him. The Court of Appeal said that the driver would have had only 1 to 1.5 seconds in which to react. It was unrealistic to expect him to have sounded his horn. He had faced an emergency and had done what any prudent motorist would have done. The first instance decision to dismiss the claim was upheld.

In Ray v Adlem, QBD, 10 February 1999 (judgment on Lawtel), the claimant had stepped out into the road very quickly and had probably broken into a run just before the point of impact. Garland J said that the behavior of the claimant was the equivalent of someone emerging unexpectedly from between parked cars. There may have been a fraction of a second in which the defendant should have started braking but it was unrealistic to argue that, because she might theoretically have been able to brake earlier, she should be held partly to blame. The defendant had been travelling at a reasonable speed (about 25 mph.), had kept a proper lookout and had reacted within acceptable limits. Claim dismissed.

Re N (a Child), CA, 5 July 2000, CLW 8, 42/2000, was a case where a child was injured by a vehicle passing a stationary ice cream van. The claimant alleged that the driver failed to sound


his horn when passing. The Court of Appeal said that where the road was so narrow, sounding the horn did not place an unreasonable burden on a driver. But in this case, the child’s grandmother had already screamed a warning, which had been ignored, so the failure to sound a horn would have made no difference.

In Barlow v Smith, CA, 15 May 2000 (judgment on Lawtel), a group of adult males were larking about at the side of the road. The claimant, who was one of the group, suddenly ran out into the road as the defendant was travelling at about 25 mph. through a green light. The Court of Appeal said that it was unrealistic to expect that one of those men would run out.

In Scutts v Keyse, CA, 18 May 2001 (judgment on Lawtel), the claimant, aged 17, was crossing the road to catch a bus when a police car struck him as it accelerated through a green light. The police driver was travelling at above the speed limit. The Court of Appeal said that speed alone was not decisive of negligence. Emergency vehicles were exempt from prosecution for exceeding speed limits. A driver was entitled to expect other road users to note signs of his approach (sirens and flashing lights). Liability had not been established.

In North v TNT Express [2001] EWCA Civ 853, the claimant and a group of friends had been drinking in a nearby wine bar and were waiting by a roundabout for a taxi to pick them up. The defendant’s lorry was negotiating the roundabout when the claimant stepped into the road in front of the lorry and asked the driver for a lift. When he refused the claimant climbed onto the front bumper and grabbed hold of the windscreen wiper. The driver asked the claimant twice to get down but this was ignored so he drove off slowly and shortly afterwards the claimant fell off and was injured. The trial judge found that the driver was 25% to blame but the defendants appealed. The appeal court said that the driver was placed in a difficult dilemma by the claimant’s actions. The claimant had acted in an irresponsible way with no consideration for his own safety or for others. The driver had no alternative but to drive off and had done all that was reasonable in the circumstances. The event occurred as a result of the claimant’s stupid act and the defendants were not liable.

In Sparrow v Mark [2002] EWHC 23 (QB), Owen J held that, although the defendant had been driving too fast for the conditions, the cause of the accident had been the claimant’s failure to look to his left before he started to cross the road. The driver had no chance of avoiding him and he would have hit the claimant even if he had been driving at a safe speed.

Sharpe v Addison, QBD (Newcastle), 25 November 2002, was a professional negligence claim against former solicitors for their conduct of the personal injury action. The claimant had started to cross the road at the rear of a bus as it pulled away from a stop. A taxi travelling in the opposite direction struck him. The taxi was travelling within the speed limit and the claimant was hidden from the driver’s view as the bus pulled away. The defendant only saw the claimant when he was well out onto the taxi’s side of the road. Judge Langan QC concluded that there was no prospect of the original action succeeding. It was not incumbent on the driver to slow down or sound his horn when approaching a bus where there was no suggestion that anyone had got off.

In Goundry v Hepworth [2005] EWCA Civ 1738, the four-year-old claimant was one of a group of adults and children who had crossed to the middle of a road and who were waiting for oncoming cars to pass. One car passed by but as the defendant’s car approached, the claimant ran into the road and was hit by the car. The appeal court said that the defendant was faced with an orderly group apparently waiting for her to pass and she had not been negligent for failing to stop in these circumstances, although some motorists might have done so.

Miller v C & G Coach Services Ltd [2003] EWCA Civ 442 was a case initially heard in the High Court in 2002 in respect of an accident that took place in 1988. At the time of the accident, the claimant was aged 15 and had alighted from a school bus and passed behind it to cross the


road when she was struck by the defendant’s coach. As a result she sustained severe brain injury. The trial judge came to the conclusion that there was no proof, after so many years had passed, that the coach had been driven negligently. The driver’s speed was appropriate and he was keeping a proper lookout. This was an accident for which no one could be blamed. The Court of Appeal agreed with this decision.

In Maranovska v Richardson [2007] EWHC 1264 (QB), the claimant was seriously injured when in collision with a bus whilst using a pedestrian crossing. The claimant’s case was that she had used the light-controlled crossing with the lights in her favour but the court accepted that the crossing was split into two separate parts and she was using the second part when the lights were in favour of the bus. Several witnesses confirmed that she stepped into the bus lane without attempting to see if it was safe to do so. The bus was travelling at no more than about 10 mph at the time and no blame could be attached to the driver.

Another case alleging negligence of a bus driver was Ahanonu v South East London and Kent Bus Co Ltd [2008] Civ 274. The bus was making a sharp turn out of a bus station when the claimant had walked up behind it and he was squashed between the rear end of the bus and a bollard. The carriageway was enclosed by railings and there was a pedestrian crossing nearby but the claimant had deviated from this. The trial judge found that the parties were equally liable and that the driver should have checked in his rear view mirror. But the Court of Appeal said that there was no reason for the driver to expect pedestrians to take the dangerous path taken by the claimant and for a driver to keep looking in his rear view mirror was a counsel of perfection and ignored reality. The judge’s finding of negligence by the driver was flawed.

6 Other parties to blame

a. Other drivers

Where a pedestrian is injured following a collision between two or more vehicles, or where the vehicle colliding with a pedestrian has swerved due to the negligence of another driver, consideration may be given to joining the other driver(s) in the action if there is supporting evidence. It should be noted that if damage is caused concurrently (as is often the case in road traffic accidents), each tortfeasor is jointly and severally liable (see Associated Newspapers v Dingle [1961] 1 All ER 897). The effect of this is that each defendant is liable to settle the claim in full unless they can agree an apportionment or if the court decides this issue. A defendant may blame others who are not sued in his defence, perhaps hoping that the claimant will join them, but the claimant may not do so and may leave it to the defendant to join others in the action.

This joint tortfeasor situation is also of importance where the MIB Uninsured Drivers Agreement operates. The MIB considers that it is a body of last resort and will not make any contribution to a claim against an uninsured driver if there is also an insured driver who is liable to satisfy a judgment. If the insured driver is not currently a party to the action, the Bureau may use its powers under clause 14.1 of the 1999 Uninsured Drivers Agreement to require the claimant to join others who are responsible.


b. Highway authorities

It may be possible to argue that a highway authority was wholly or partly to blame for an accident (eg. if a pothole has caused a driver to swerve or lose control). The authority has a strict statutory duty to maintain the public highway under s. 41(1) of the Highways Act 1980. However in relation to snow and ice, section 41(1A) provides that the duty is qualified by the words ‘so far as is reasonably practicable’.

c. Street lighting

The absence of adequate street lighting may be a factor in pedestrian accidents. Local authorities have powers to provide street lighting but have no duty to do so. In Sheppard v Glossop Corporation [1921] 3 KB 132 (CA), the local authority decided to extinguish its street lights at 9pm. The Court of Appeal held that the authority, having begun to light the road, was under no obligation to continue to light it, having done nothing to make the road dangerous. However, where the absence of lighting constitutes a danger, the authority may be found liable for failure to warn [Whiting v Middlesex CC [1948] 1 KB 162 (QBD)].

d. Persons in charge of young children

Having regard to rules 4 and 7 of the Highway Code (see 4 b of these notes), there may be a possibility of blaming a person in charge of a child if:

§ The child is very young (say under 5) and is not restrained in some way; or

§ The child is allowed out alone but has not yet mastered the Green Cross Code (this may be difficult to prove).

The negligent adult may also be the child’s litigation friend. If so one should consider whether the cost involved in the adult having to be separately represented and another litigation friend appointed is justified. One should also consider whether the adult has either the means or insurance (consider household policy, credit card insurance, and trade union membership) to satisfy a judgment.


Passenger claims and seat belts

1 Introduction

a. Vulnerability

Unlike pedestrians, vehicle passengers, with the exception of motorcycle pillion riders, are generally much less vulnerable in a road accident. This is because, to a large extent, they are protected inside a metal structure and in cars, they will usually have the added protection of seat belts, head restraints and airbags.

b. Casualty statistics

The table below shows the casualty figures for passengers in cars, goods vehicles and buses and coaches (motor cycle passengers are omitted) from 2002 to 2006 [Source: Department for Transport – Road Accidents Great Britain 2007.]

Year Killed Killed or seriously injured All severities2002 347 3550 31,4992003 373 3344 30,1672004 348 3138 28,8952005 337 2655 27,3232006 321 2700 26,464

c. Seat belt statistics

Statistics about whether or not a casualty was wearing a seat belt at the time of an accident are no longer collected by the Department for Transport. The current form used by the police for compiling accident statistics about casualties [MG NSRF/C] indicates where a casualty was sitting but there is no provision on this form for seat belt information, although the police officer might comment in other parts of the road accident report.

It is understood that these statistics were not regarded as reliable. The first thing that happens after a crash is that occupants undo their seat belts and try to get out of the vehicle. By the time the emergency services arrive, casualties may not remember anything or if they do, they are unlikely to admit not wearing a seat belt.

2 The driver’s duty of care

a. The general duty of care

Basically, there is no difference between the duty of care owed to passengers from that owed to pedestrians. The ‘neighbour’ principle applies equally to all road users.

b. The Highway Code

There are some additional rules for drivers in respect of child passengers:


§ The driver must ensure that all children under 14 in cars, vans and other goods vehicles wear seat belts or sit in approved seat restraints [100]

§ Drivers carrying children in the above vehicles must ensure that [102]:

- children should get into the vehicle at the door nearest the kerb;

- child restraints are properly fitted;

- children do not sit behind the rear seats in an estate car or hatchback unless a special child seat is fitted;

- child safety locks are used when children are in the vehicle; and

- children are kept under control

c. Drunken passengers

In Griffiths v Brown (1998), The Times, 23 October, the claimant, who was inebriated, was hit by another car when crossing the road after alighting from a taxi. The High Court judge said that once the passenger has alighted, the contract was at an end and the taxi driver was under no obligation. There was no duty on a taxi driver to assess the sobriety of a passenger before setting him down.

d. Ex turpi causa non oritur actio

This maxim, literally translated, means that no action can be brought where the parties are guilty of illegal or immoral conduct. In Thackwell v Barclays Bank plc [1986] 1 All ER 676, it was said that the test involves two questions:

§ Whether there has been illegality of which the court should take notice; and

§ Whether it would be an affront to public conscience if the court was seen to be assisting or encouraging the claimant in his criminal act.

The application of this maxim arose in Pitts v Hunt [1990] 3 All ER 344, where the claimant pillion passenger encouraged the rider to drive in a reckless and dangerous manner after they had been drinking together. The Court of Appeal upheld the trial judge’s decision that the motor cycle rider owed no duty of care to the claimant, since both were jointly engaged in committing a criminal offence. A similar view was taken in Ashton v Turner [1980] 3 All ER 870, where the injured person was escaping after committing a crime.

It should be stressed that courts may be reluctant to deprive a claimant of damages in this way unless both driver and passenger were jointly engaged in a criminal act of a serious nature. The maxim is unlikely to be of assistance where, for example, a passenger condones the driver exceeding the speed limit. However, there may be contributory negligence where a passenger knowingly consents to travel with a drunken driver.


3 The law on seat belts and child restraints

a. ‘Wearing a seat belt saves lives’

This is the message from the Department for Transport (www.dft.gov.uk/think). The supporting information for this message is (www.roadsafe.com):

§ Seatbelts have prevented an estimated 60,000 deaths and 670,000 serious injuries since they were made mandatory for front seat occupants in 1983

§ 9 out of 10 people agree it is dangerous to travel in the back of car without a seat belt but only 7 in 10 adults actually wear them

§ Young men, rear seat passengers, company drivers and goods vehicle drivers have low seat belt wearing rates

§ 75% of passengers thrown from a car die and unbelted occupants are 30 times more likely to be thrown from a car

§ In a crash at 30 mph, if unrestrained, an occupant will be thrown forward with a force of up to 60 times their own bodyweight

The Department for Transport (DfT) has provided some statistics taken from observational surveys of seat belt use. The figures for October 2006 are:

Type of occupant Seat belt wearing rate (%)Car drivers 93Front seat car passengers 95Rear seat car adults (14+) 65Rear seat car children 94Van drivers 69Van front seat passengers 58

A survey by TRL Ltd for Transport for London on seat belt usage in (March 2006) showed the same general pattern but overall usage rates in the London Boroughs were considerably lower than the DfT surveys.

b. The law on seat belts and child restraints

The first mandatory wearing of seat belts was by s.27 of the Transport Act 1981, which inserted a new s.33A into the Road Traffic Act 1972, making it an offence to drive a motor vehicle without wearing one. Section 28 of the 1981 Act inserted a new s.33B, making it an offence to drive the vehicle where a child under 14 was in the front seat and not wearing a belt.

These provisions came into force on 1 January 1983. These measures in the 1972 Act have now been incorporated as ss. 14 and 15 in the Road Traffic Act 1988.


The main current legal requirements in respect of cars, vans and other goods vehicles are summarized in the following table:

Vehicle occupant Front seat Rear seat Who is responsible?

Driver Seat belt must be worn if fitted.

N/A Driver

Child under 3 Correct child restraint must be used.

Correct child restraint must be used. If not available in a taxi, may travel unrestrained.

Driver

Child 3 and over up to 1.35m (approx. 4ft 5 ins) in height or up to 12 years, whichever is first.

Correct child restraint must be used.

Correct child restraint must be used where seat belts fitted. Must use adult belt if child restraint not available in taxi or for certain specified reasons.

Driver

Child over 1.35m in height or 12 or 13 years.

Adult seat belt must be worn if available.

Adult seat belt must be worn if available.

Driver

Adult passengers (aged 14 and over).

Seat belt must be worn if available.

Seat belt must be worn if available.

Passenger

These requirements are contained in various regulations made under the 1988 Act and, where applicable, to implement the requirements of EU Directive 2003/20/EC (OJ No. L115). The relevant regulations are:

§ The Motor Vehicles (Wearing of Seat Belts) Regulations 1993 [SI 1993/176];

§ The Motor Vehicles (Wearing of Seat Belts by Children in Front Seats) Regulations 1993 [SI 1993/31]; and

§ The Motor Vehicles (Wearing of Seat Belts)(Amendment) Regulations 2006 [SI 2006/1892]

It should be noted that for children under 14, it is the statutory responsibility of the driver to ensure that the seat belt worn or the child restraint is used. It is only from age 14 upwards that this responsibility passes to the passenger.

c. Increased fixed penalties?

The Home Office has recently published a consultation document (www.homeoffice.gov.uk) about its proposals to increase the fixed penalty for failing to comply with ss.14 and 15 of the 1988 Act from the present £30 to £60. This is not an endorseable offence and the Government considers the present penalty to be inadequate.


4 Seat belts and contributory negligence

a. General principles of contributory negligence

The text of s.1(1) of the Law Reform(Contributory Negligence) Act 1945 is quoted in 4 a. of these notes. It is important to appreciate that damages may be reduced having regard to the claimant’s share of blame for the damage.

As Lord Denning so succinctly observed in Froom v Butcher [1976] 3 Al ER 520:

‘Negligence depends on a breach of duty, whereas contributory negligence does not. Negligence is a man’s carelessness in breach of duty to others. Contributory negligence is a man’s carelessness in looking after his own safety. He is guilty of contributory negligence if he ought reasonably to have foreseen that, if he did not act as a reasonably prudent man, he might hurt himself . . .’

b. The decision in Froom v Butcher

In this case, the claimant was driving his car when it collided with the defendant’s vehicle. The defendant was wholly responsible for the accident. The claimant was not wearing his seat belt and the injuries to his head and chest would have been avoided had he done so. He also suffered a broken finger, which would not have been avoided. The appeal was concerned solely with the issue of contributory negligence.

Until the Court of Appeal heard this case in July 1975, there had been conflicting decisions in the lower courts as to whether the failure to wear a seat belt was tantamount to contributory negligence. One view was that insurers should not be relieved of paying proper compensation where a driver has been negligent. But Lord Denning said that this was not the correct approach. He said:

‘The accident is caused by bad driving. The damage is caused in part by bad driving of the defendant, and in part by the failure of the claimant to wear a seat belt.’

At that time it was compulsory for seat belts to be fitted to all cars first registered since 1965, but it was not compulsory to wear them. However, the Highway Code had, since 1968, advised motorists to make sure seat belts were used and the claimant should have known this. The Government had also spent £2.5m in advertising telling people to wear them. The Government had also introduced a Bill into Parliament to make wearing of seat belts compulsory, but it had been delayed.

Lord Denning said that meanwhile judges should say plainly that it is the sensible practice for all front seat occupants to wear seat belt at all times. He said this about the situation at the time:

‘Seeing that it is compulsory to fit seat belts, Parliament must have thought it sensible to wear them. But it did not make it compulsory for anyone to wear a seat belt. Everyone is free to wear it as he pleases. Free in the sense that if he does not wear it, he is free from any penalty from the magistrates. Free in the sense that everyone is free to run his head against a brick wall if he pleases. He can do it if he likes without being punished by the law. But it is not a sensible thing to do. If he does it, it is his own fault; and he has only himself to thank for the consequences.’


As to the share of responsibility, Lord Denning repeated his comments made in Davies v Swan Motor Co and added:

‘This question should not be prolonged by an expensive enquiry into the degree of blameworthiness on either side, which would be hotly disputed. Suffice it to assess a share of responsibility which will be just and equitable in the great majority of cases.’

‘Sometimes the evidence will show that the failure made no difference. The damage would have been the same, even if the seat belt had been worn. In such cases, the damages should not be reduced at all.’

‘At other times the evidence will show that the failure made all the difference. In such cases I would suggest that the damages should be reduced by 25%.’

‘But often enough the evidence will only show that the failure made a considerable difference. Some injuries to the head, for instance, would have been a good deal less severe if a seat belt had been worn, but there would have still been some injury to the head. I would suggest that the damages attributable to the failure to wear a seat belt should be reduced by 15%.’

The trial judge in this case had made a 20% reduction and, bearing in mind that the finger would have been broken anyway, the Court of Appeal decided not to interfere with this.

c. Discussion

It is now more than 30 years since the judgment in Froom v Butcher and it is understood that no court has so far gone through the ‘glass ceiling’ of 25% in seat belt cases. The lower courts seem to have interpreted Lord Denning’s words as a binding authority. But are they? The use of the words ‘I suggest’ in relation to the 15% and 25% reduction seems to infer guidance, rather than strict compliance. In the preceding paragraph, a reference to ‘the great majority of cases’ may infer that some departure from the norm may be justified in order to ensure a ‘just and equitable share of responsibility’ (as required by s.1(1) of the 1945 Act).

Notwithstanding these question marks, the glass ceiling seems to be impervious to several attempts to breach it by insurers who are keen to reduce their share of damages, especially in multi-million pound compensation cases. Some of the more notable challenges are discussed below.

d. Subsequent challenges

In Eastman v South West Thames Regional Health Authority, CA, [1991] RTR 389, the claimant was travelling in an ambulance with her mother-in-law, a patient. She was sitting on a crew seat which was not equipped with a seat belt, although other seats were equipped and a notice in the ambulance advised passengers to wear the belts provided. The attendant, who was also in the back of the ambulance, neither suggested that she should wear a seat belt nor drew attention to the notice. The ambulance driver had to brake suddenly due to an incident that was not his fault, and the claimant was thrown from her seat and suffered serious injury.

The Court of Appeal said that the defendants had provided seats with belts and she chose not to use them. There was no general duty of exhortation in regard to the wearing of seat belts and the defendants were not liable.


In J (a child) v Wilkins [2001] PIQR P12, the claimant was a very young child, under three years of age, travelling on her mother’s knee in the front passenger seat. The lap belt was secured around the mother and child but the diagonal strap passed across the mother only. A single joint expert concluded that if the claimant had been wearing an approved seat restraint (as required by the 1993 regulations), the risk of serious injury would have been almost entirely eliminated. The car was in a head-on collision and the child suffered catastrophic injuries. The defendant in the other vehicle admitted negligence but alleged negligence by the mother and her aunt (who was driving the car) for failing to secure the child in a suitable seat restraint. The child’s mother and aunt were joined by the defendant in Part 20 proceedings, seeking a contribution from them.

In the Court of Appeal, Keene LJ said that the same approach was appropriate between Part 20 defendants as between claimant and defendant. He also said that at the time of Froom v Butcher, it was not compulsory to wear seat belts but the court was aware of the contemplated legislation. He said that a reading of the judgment shows that the 25% was not put forward as an absolute and immutable ceiling in every case, but the court clearly wished to give guidance for the vast majority of cases. It follows that there could be exceptional cases but one would expect them to be rare.

An exceptional situation might exist where a contribution claim is made because an adult deliberately carried someone on their lap with no seat belt or other restraint applied. In this case, the mother did not leave the child wholly unrestrained. In fact what she had done actually made the situation worse, but neither the mother nor the aunt was aware of this. The blame attached to them must be limited by their lack of understanding of the risk – a lack they shared with much of the public. In the circumstances the appeal court upheld the trial judge’s apportionment of 75% to the defendant driver of the oncoming car and 25% to the Part 20 defendants.

Hitchens v Berkshire County Council, 13 October 1999, QBD (Winchester) (judgment available on Lawtel) was a Fatal Accidents Act claim where the deceased, a taxi driver, was killed in an accident on the A4. There were no other vehicles involved and it seems that he lost control of the car, which hit a tree. He was not wearing a seat belt and was thrown out of the car. This section of the road was icy and had not been adequately gritted by the defendant authority, nor had any warning about the slippery surface been given. The agreed expert evidence was that if the deceased had been restrained, he would have suffered only minor injuries. There was no suggestion that the deceased had been negligent in any respect other than his failure to wear a seat belt.

In his judgment, HH Anthony Thompson QC held that the defendants were liable for failing to properly carry out their winter maintenance plan. At that time, taxi drivers were allowed certain dispensations from having to wear a seat belt when on business, but the deceased had been returning home from work so he should have been wearing his seat belt. The judge said that if he had been free to approach this case without regard to the authority in Froom v Butcher, he would have applied a very substantial discount for contributory negligence, certainly no less than 50%. But he was bound by the authority and reduced the damages by 15%. The judge suggested that perhaps it was time for the Court of Appeal to look afresh at this issue as times had changed: failing to wear a seat belt was now a criminal offence and attitudes had changed towards the wearing of them.

Leave to appeal was granted but the parties agreed a settlement on terms which amounted to a50% reduction for contributory negligence. (See further comments on this settlement in Gawler below.)

The latest attempted challenge was in Gawler v Raettig [2007] EWHC 373 (QB), 1 March 2007, Mr Justice Gray. The 24-year-old claimant was a front seat passenger in a car driven by the


defendant, which ran off the road. Primary liability was admitted and the sole issue was the claimant’s share of responsibility. The claimant was not wearing his seat belt and was thrown out of the car, sustaining catastrophic injuries. The experts agreed that had he been wearing his seat belt, he would have emerged from the accident with, at most, minor and easily reversible injuries.

The defendants claimed a 50% reduction, arguing that this was a rare and exceptional case because:

§ The claimant was older and a more experienced driver than his friend who was driving;

§ The claimant had deliberately left off his seat belt, probably for some time;

§ The driving of the defendant was no worse than careless and this was a case of momentary inattention; and

§ The claimant would have sustained little or no injuries if he had worn his seat belt

[Counsel for the defendant, William Norris QC, was also involved in Hitchens and it was accepted that the agreed 50% settlement was not binding and was probably influenced by (undisclosed) extraneous considerations.]

The trial judge did not accept that the factors put forward by Mr Norris brought the case into the exceptional or rare category. There was no clear evidence that the claimant had deliberatelyleft off his seat belt. On the other hand, the defendant had been driving much too fast, and the fact that he pleaded guilty to careless driving and was fined £450 with a 7 point endorsement suggests that the magistrates thought it a relatively serious case, not mere inattention. The judge was not persuaded that he should depart from the 25% deduction indicated in Froom.

But the defendants tried to take this further. There was a lot of money at stake. Damages on a full liability basis were agreed at £2.7m. With a 50% reduction, the insurers would pay just over £2m. With a 50% reduction it would be £1.35m. The insurance industry at large would save substantial sums if they could penetrate the glass ceiling

The defendants decided to invoke what is called a ‘leap-frog’ procedure to appeal directly to the House of Lords, by-passing the Court of Appeal [s.12 of the Administration of Justice Act 1969]. In order to succeed they have to show that:

§ A point of law of general public importance is involved; and

§ The decision is one where the judge was bound by a decision of the Court of Appeal

[For the defendants to succeed would be strange because it was their case that Lord Denning’s comments in Froom were obiter and not binding.] In June 2007, a petition was considered by the House of Lords but it was rejected because it did not raise an arguable point of law of general importance.

Despite this setback, the defendant’s next step was to come to terms with the claimant and pay him 75% of £2.7m. They agreed not to seek any further money from him if their appeal was successful and they would give the claimant an indemnity as to any further costs of an appeal. In other words, any further appeal was ‘academic’ in the sense that it would have no further effect on the parties.


In December 2007, the Court of Appeal considered an application for permission to bring the appeal to them ([2007] EWCA Civ 1560). It is clear from the judgment of Sir Anthony Clarke MR that they were not impressed by what was an academic exercise. The claimant would get his costs, win or lose, and neither of the actual parties had any real interest in the outcome. The appeal was really brought on behalf of the defendant’s liability insurers, and perhaps the interests of insurers in general. He said it would be preferable for any issues of principle to be determined between parties with a real interest in the outcome and a real interest in putting relevant evidence before the court. He concluded that:

§ There is no pressing need for an academic appeal to be heard in the absence of real parties with a real interest in the outcome; and

§ The public interest does not require permission to be granted, even if there was some potential merit in the appeal

So what will happen next? Will any insurer or corporate defendant eventually find a case that is truly so rare and exceptional that it will persuade a superior court to break through the 25% ceiling?

5 Travelling with a drunken driver

a. The general principle

In Owens v Brimmell [1977] 2 WLR 94 (QBD), the general principle was stated that:

§ A passenger may be guilty of contributory negligence if he travels in a vehicle with a driver –

- whom he knows has consumed a quantity of alcohol

- Is likely to impair his ability to drive safely

This principle follows from Lord Denning’s comments in Froom v Butcher that contributory negligence is a man’s carelessness in looking after his own safety.

The facts in this case were that the claimant and defendant went on a pub-crawl together and the defendant volunteered to drive. They each drank about nine pints of beer and on the journey home, the car left the road and hit a lamp post. The claimant was thrown out of the car and sustained extensive injuries.

Wilkins J, having stated the above principle, added:

§ A passenger may also be guilty of contributory negligence if, knowing that he is going to be driven in a car by his companion later,

§ He accompanies him on a bout of drinking

§ Which has the effect, eventually, of robbing the passenger of clear thought and perception,

§ And diminishes the driver’s capacity to drive properly and carefully


The judge said that whether this principle can be relied upon successfully is a question of fact and degree in the circumstances of each case.

As to the share of responsibility he said: ‘. . . the degree of blameworthiness is not, in my opinion, equal. The driver, who alone controls the car and has it in him, therefore, to do whilst in drink, great damage, must bear by far the greater responsibility.’ He decided that in this case, the claimant’s contribution should be 20%.

The burden of proving contributory negligence rests on the defendant (see Malone v Rowan[1984] 3 All ER 402).

b. Booth v White [2003] EWCA Civ 1708

The issue of ‘knowledge’ established in Owens v Brimmell requires some kind of assessment by the passenger of whether or not he thinks it safe to travel with the driver. What is the extent of the enquiries that are reasonably to be expected of the claimant?

The facts in Booth were that the claimant and defendant went for a lunchtime drink in a pub, where the defendant drank one pint of lager and after this he went to play football. The claimant stayed in the pub where he drank many more pints during the afternoon. At about 5pm the defendant returned to the pub and later got into his car to take the claimant home. The claimant passenger, Mr Booth, sat in the front seat with his seat belt fastened. On the way home, the defendant driver, Mr White, lost control of the car, which went off the road, seriously injuring the claimant. The defendant was found to have consumed nearly twice the legal limit for alcohol.

The defendant contended that the claimant should have known (or would have known if he had not been so drunk) that there was a significant risk that Mr White had drunk excess alcohol. He should have asked him how much he had drunk before getting into the car. The trial judge had relied on the evidence of Mrs Booth, who had been to the pub and had seen her husband in a drunken state but she said that Mr White appeared fit to drive. The defendant chose not to give evidence.

The Court of Appeal held that there was no contributory negligence on the part of the claimant. Brooke LJ said: ‘In my judgment, the law would take a wrong turning if we were to require an interrogation in this type of case of the type that [defendant’s counsel] has suggested.’


6 The tired driver who blames his employer

Eyres v Atkinsons Kitchens and Bedrooms Ltd [2007] EWCA Civ 365

The claimant had not been wearing a seatbelt (a factor which contributed substantially to his injuries) and had been driving while tired which resulted in him falling into a micro sleep. His employer was in the vehicle at the time and whose philosophy was variously ‘eating is cheating’ and ‘you can sleep when you’re dead’. Nevertheless, despite the most vigorous arguments for 75% contributory negligence, it was awarded at 33% which utilised the ‘conventional’ figure of 25% for the seatbelt and a further 8% for driving while tired.

7 Compulsory insurance restrictions

a. Road Traffic Act 1988

The liability of a defendant motorist at common law to his passengers may, in some instances, be modified by the legislation relating to compulsory motor insurance or, if the driver had no insurance, by the Motor Insurance Bureau (MIB) Uninsured Drivers Agreement 1999 (UDA).

In a situation where the defendant has third party motor insurance that was in force at the time of the accident; and covered the vehicle, the driver and the use of the vehicle at the time, the above liability restrictions do not apply. The ‘contractual insurer’ should deal with the claim under the terms of the policy. But if the insurer has issued a certificate of insurance and certain conditions have not been observed (e.g. the vehicle was being driven by someone not permitted to do so), the insurer is still obliged to satisfy a judgment under s.148 of the 1999 Act. In these circumstances, the insurer is referred to as RTA insurer and certain passenger claims are excluded.

In some limited circumstances, where a certificate of insurance has been issued but s.148 does not apply, the insurer may still be required to satisfy a judgment because of an internal arrangement with the Bureau, known as Article 75. The effect of this is that the ‘Article 75 insurer’ stands in the shoes of MIB and operates the UDA. If there is no insurance at all, the MIB has an obligation, as a body of last resort, to satisfy a judgment, subject to the strict conditions precedent to liability contained in the UDA.

The difference between the obligations of an RTA insurer and an Article 75 insurer or MIB is important because the exclusions of passenger liability in the latter situations are more extensive than under the RTA. But in any event there is an overriding requirement that there should be what is called relevant liability. This means that the obligation to satisfy a judgment applies only where there is a requirement to have third party motor insurance under s.143(1)(a) of the 1988 Act. This requirement arises out of the use of a motor vehicle on a road or other public place. For example, the obligation would not apply if the accident had occurred in a car park which was not for the use of the public at large.

b. Attempts to avoid certain liability to passengers

Section 149(2) of the 1988 Act makes any agreement to restrict or negative passenger liability of no effect. This would apply, for example, to any contract terms or notices which purport to claim that passengers travel at their own risk. It also negatives conditions on liability (e.g. that bus passengers must retain a valid ticket).


Section 149(3) does not allow the fact that a person has willingly accepted the risk as removing liability. This effectively rules out the defence of volenti non fit injuria in passenger claims where the RTA applies, although it does not rule out the defence of ex turpi causa.

c. The duty of an insurer to satisfy a judgment under the 1988 Act

The duty of an insurer under s.151(2) of the Act is subject to what is called an excluded liability. Section 151(4) says that ‘excluded liability’ means liability to passengers for injury or damage whilst:

§ At the time of the relevant event –

§ They allow themselves to be carried in or on the vehicle –

§ And knew or had reason to believe –

§ That the vehicle had been stolen or unlawfully taken

But this exclusion will not apply if the passenger:

§ Did not know of, or had no reason to believe this until after they started the journey; and

§ Could not reasonably have been expected to alight from the vehicle.

In McMinn v McMinn and anr. [2005] EWHC 827 (QB), the insurers had issued a fleet policy which restricted driving to those aged 25 or over and who were licensed or permitted to drive. The claimant was seriously injured in a van being driven by the first defendant, who satisfied none of the above conditions. The court held that the claimant knew that the van belonged to the driver’s employers and that they would not have allowed the first defendant to drive it. Therefore it had been unlawfully taken within the meaning of s.151(4) and the insurers were not required to satisfy the judgment.

d. Excluded passenger liability under the UDA 1999

Claims by certain passengers are excluded [Clause 6.1(e)] if they knew or ought to have known that the vehicle:

§ Had been unlawfully taken;

§ Was uninsured;

§ Was being used to commit a crime; or

§ Was being used to escape from the police

The burden of proving knowledge rests with MIB [Clauses 6.3 and 6.4]. This has always been a contentious provision which goes much further than the ‘excluded liability’ where an RTA insurer is involved. Some of the relevant case law is summarised below.

In Akers v Motor Insurers Bureau [2003] EWCA Civ 18, a passenger was killed in a motor accident when the 19 year-old driver lost control of the car at speed. There were two other passengers in the car and the court ruled that the deceased was present when the driver


indicated that he was uninsured. Clause 6(1)(e) applied and the MIB were not liable to satisfy the judgment.

This Court of Appeal decision follows an earlier ruling by the House of Lords in White v White[2001] UKHL 9 where reference was made to the words in the Second EC Directive on Motor Insurance (84/5/EEC) where the derogation allowed refers only to ‘knew’ rather than ‘knew or ought to have known’ used in the agreement. In that case it was held that a person is only precluded from making a claim where he actually knew of the lack of insurance or deliberately disregarded plain indications of that fact.

In Akers, Keene, LJ said: ‘A mere failure to make enquiries as to insurance, however negligent in the circumstances, is not enough by itself to bring the exception into play. It certainly will apply, however, either if the passenger had actual knowledge of the lack of insurance, or if he had information from which he realised that the driver might well not be insured but he deliberately refrained from asking questions lest his suspicions be confirmed.’

In Phillips v Rafiq and MIB [2006] EWHC 1461, the claimant was the widow of a front seat passenger who was killed in an accident on the M25. Mr Phillips, the deceased owned the car involved but at the time it was being driven by Mr Rafiq, who was not insured. MIB refused to satisfy the claim, relying on clause 6(1)(e) and the fact that the deceased knew, or ought to have known that the vehicle was uninsured. However Seymour J said that the clause actually referred to the claimant. The claimant in this case was Mrs Phillips, who was not a passenger in the car so the exception did not apply to her.

MIB has since appealed this decision [2007] EWCA Civ 74. In upholding the first instance decision, the Court of Appeal said that the words in clause 6(1)(e) should be given their plain and literal meaning.

Clause 6(1)(c) contains a proviso that at the relevant time, either before the journey started or after the person could reasonably have been expected to alight from the vehicle, that person knew that the vehicle was uninsured etc. (This is sometimes called the ‘petrol station’ defence.) In Pickett v MIB [2004] EWCA Civ 06, the claimant was a passenger in her own car, being driven by her boyfriend who, as she well knew, was uninsured. She claimed that she had withdrawn her consent to be carried in the vehicle but, by a two to one majority, the Court of Appeal held that she had not unequivocally asked to get out of the car. The driver had started to make handbrake turns and she told him to stop doing this. She asked him to stop so that she could let her dog out (not herself) but the driver did another handbrake turn, the car overturned and she was seriously injured. The court held that MIB were entitled to rely on the exception in this case.


Credit hire claims

1 The increased cost of a credit hire claimIt is estimated that in 2006, at least one in five innocent motorists took advantage of credit hire and the involvement of CHOs increased the aggregate claim cost by 12% [Post Magazine, 10 April 2008]. There are several reasons for this:

§ The cost of a replacement vehicle is considerably higher when provided on credit;

§ The repayment period is open-ended;

§ The CHO has additional administration expenses and has to allow for the risk of not beingpaid;

§ The claimant has no interest in the hire rate and has no incentive to shop around for a better deal – it is a seller’s market;

§ There is little incentive to minimise the hire period;

§ If a solicitor is involved, the credit hire service arrangements are likely to increase legal costs and they will tend to make the total claim more complex and it will take longer to settle;

§ The cost of a credit hire claim will also raise the overall value of the claim, possibly taking it out of the small claims track;

2 Major battles in the credit hire war

a. Round 1: Giles v Thompson [1994] 1 AC 142, HL

This first major challenge by insurers was based on the ancient common law principle of champerty. It was alleged that CHOs were instigating the litigation, had a financial interest in it and (often) funded it. This practice was said to be champertous, therefore such agreements were illegal and unenforceable against the claimant.

The principle of champerty concerns the wrongful interference (or meddling) in the disputes of others and was originally intended to stop powerful interests from oppressing private individuals. The crime and tort of champerty were abolished by the Criminal Law Act 1967 but s.14(2) of the Act provides an exception that the abolition did not apply to cases where a contract is contrary to public policy or is otherwise illegal.

The House of Lords said that credit hire agreements were not champertous as they did not endanger the administration of justice. [This was important as in effect it legitimised the credit hire industry and caused CHOs to have confidence in their arrangements.] The judgment also established that where the claimant can prove need and liability to pay, he can recover the hire costs. The onus of proving need is primarily on the claimant and Lord Mustill said: ‘… this need is not self-proving.’


b. Round 2: Dimond v Lovell [2000] 2 All ER 897, HL

This case was concerned with two main issues:

§ The enforceability of a credit hire agreement; and

§ The recoverable rate of hire

But before summarising these issues it is relevant to consider the attitude adopted by the superior courts to credit hire in general as this helps to explain the rationale behind their decisions.

i. Available remedies

In Giles v Thompson, Lord Mustill said: ‘… there exists a gap in the remedies available to the motorist, from which the errant driver, and hence his insurers, frequently profit.’ In Dimond, Lord Nicholls said: ‘The additional services provided by accident car hire companies bridge this gap. They redress the balance between the individual car owner and the insurance companies. They enable car owners to shift from themselves to the insurance companies a loss which properly belongs to the insurers but which, in practice, the owners of cars often have to bear themselves.’

Although a majority of the House of Lords were clearly critical of the insurers’ attitude to credit hire claims, they believed that recovery of the full cost of credit hire was perhaps a bridge too far

ii. Enforceability of a credit hire agreement

The Consumer Credit Act 1974 (now amended by the Consumer Credit Act 2006) regulates consumer credit and consumer hire agreements. The aim is to protect consumers (mainly individuals and small businesses, not limited companies). The Act applies only to regulated agreements and certain agreements are exempt.

The House of Lords held that credit hire agreements involved an extension of credit to the hirer and were therefore ‘regulated agreements’ under the Act unless they satisfied the conditions for exemption. If they were regulated they were ‘improperly executed’ [s.61(1)(a) of the Act] because they did not (and obviously could not) contain a term stating the ‘total cash price for the services’ (i.e. the total charge for the hire as at that stage, the extent of the required hire period was unknown). It was conceded that this particular agreement was not exempt, although Lord Hoffman said that it could have been exempt if the number of payments to be made did not exceed four and if the repayment period did not exceed 12 months. [Was he dropping a hint to the CHOs as to how to redraft any future agreements?] However this agreement was improperly executed and was completely unenforceable as between the CHO and the hirer,consequently the claimant vehicle owner had no loss to claim from the defendant driver.

iii. Loss of use of a vehicle

The ‘fall back’ position adopted by the CHO was that it did not really matter whether Mrs Dimond was liable to pay for the hire, Mr Lovell had negligently deprived her of its use. This was her loss and the fact that she was provided with a ‘free’ replacement car was irrelevant. The House of Lords accepted this argument, having considered it in the light of the principle of res inter alios acta (a man ought not to be prejudiced by what has taken place between other persons).


iv. What rate is recoverable?

But the House of Lords was not prepared to regard the claimant’s loss in the same way as gratuitous services provided by a friend or relative where the claimant is said to hold the money on trust for the gratuitous provider (see Donnelly v Joyce [1974] 1 QB 454). Whilst it was quite reasonable for the claimant to have chosen the credit hire services offered to her, she obtained not only the use of the car but the following additional benefits:

§ She was relieved of the necessity of paying up front for the hire car

§ She was relieved of the trouble and anxiety of pursuing a claim against the defendant

§ She was relieved of the risk of paying any irrecoverable costs of successful litigation and possible further expense if it failed

It is a well-established principle that damages for the worry and inconvenience of having to deal with the consequences of an accident are not recoverable. So in essence she received additional benefits by choosing the credit hire package in order to mitigate her loss. Quantifying the value of those benefits was not easy as the contract did not distinguish them from the basic hire cost, so the House of Lords decided that the way to look at it was the difference between what she would be willing to pay for credit hire and what she would have paid to an ordinary car hire company. This means that the net loss under this head of claim should be the spot rate.

v. Who won round 2?

In some respects Dimond was a victory for CHOs because it established that notwithstanding arguments about the enforceability of agreements there was a residual liability for the claimant’s loss of use of the vehicle. CHOs also took the hint and redrafted their agreements to try to obtain exemption from regulation under the 1974 Act.

The opportunities for technical challenges to credit hire agreements was beginning to dwindle but if the CHOs recovered only the spot hire rate they would soon go out of business. But the issue of spot rates was reconsidered in rounds 3 and 4 and insurers found another way to challenge agreements in round 3.

c. Round 3: Clark v Tull (t/as Ardington Electrical Services) [2002] EWCA Civ 510

In four of these appeals insurers attempted to challenge the whole scheme for credit hire and credit repair, which they claimed was a pretence (or sham) to avoid restrictions imposed by the 1974 Act and/or that the agreements were unenforceable. These four cases concerned subsidiaries of the Helphire Group and are sometimes referred to as the ‘Helphire cases’.

i. Pretence

The Helphire scheme was clearly designed so that the agreements were exempt from regulation under the 1974 Act. There was also a legal expenses scheme (‘Angel’) where claims could be made if credit hire charges were not recovered but claims were seldom made under the scheme and the CHO simply bore the loss themselves. But the Court of Appeal said that just because the scheme may have been ‘sloppily enforced’ does not mean that it was a sham. The customers got exactly what they bargained for: car repair and hire at little or no cost. There


was no pretence. [This decision was made solely on the facts of the Helphire scheme. It does not mean that other schemes cannot be challenged on this issue]

ii. Terms of the Helphire agreement

The Court of Appeal made some specific findings about the terms in relation to the 1974 Act, including the following:

§ Where an agreement restricts the period of hire to 12 weeks, the fact that the liability to pay may be for a longer period does not bring it into the regulated category

§ An agreement which requires payment to be made in one go but permits the debtor to make more payments if he wishes may be exempt under the Act

§ The requirement for prescribed terms to be included in the agreement is not satisfied if the terms are in another document, such as the hirer’s tariff

iii. Impecuniosity

One of the appellants, Mr Lagden, had very little money to hire a replacement car and was therefore reliant on the services of a credit hire company. This issue was not considered in Dimond as it was never suggested that she was impecunious. The Court of Appeal said that a tortfeasor must take his victim as he finds him, so an impecunious claimant should be entitled to recover the credit hire rates, not just the spot rates as in Dimond. However this issue was appealed to the House of Lords (see below).

iv. Different vehicle

Another appellant, Mr Dennard, drove a sports car but he was supplied with a Vauxhall Vectra as a replacement vehicle. Helphire submitted that his loss was the cost of hiring a replacement sports car and the fact that he accepted a Vectra was irrelevant. The Court of Appeal said that a person who does not incur the cost of hiring a sports car cannot recover more than the cost actually incurred. However if the need for a particular replacement vehicle is established, that cost is recoverable.

v. The hire rate

Dimond had established that the spot rate should be the measure of damages (ignoring for the moment any issue about impecuniosity). But there is no one spot rate as such – hire charges vary considerably and change frequently. In principle, the claimant can go to the nearest hire company and recover the amount charged, even if this rate is at the top of the range for spot hire in the locality. Of course the claimant should mitigate his loss but the onus of proving a failure to do so rests with the defendant. So the insurers would have to show that it would be reasonable for the claimant to have hired from another company who charged another rate.

It was suggested that the ABI scheme figures could be used but the Court of Appeal said that these were a compromise between some insurers and CHOs and were not an appropriate measure in hostile litigation.

vi. Repair costs

In the four Helphire cases, the Court of Appeal decided that these credit agreements were enforceable but the fifth appeal, Burdis v Livesey, concerned an agreement with Accident Assistance Ltd. Unlike the sophisticated Helphire agreements, this one did not avoid regulation


and did not comply with the 1974 Act. The first instance judge held that it was unenforceable and this decision was not appealed.

However the Court of Appeal distinguished between the claim for hire charges and that for car repairs. The hire charges represented a potential future loss, which was recoverable only if and when they were suffered. As the agreement was unenforceable, the claimant’s loss did not arise. On the other hand Miss Burdis suffered an immediate and direct loss in the diminution of value in her car. In negligence losses are treated differently depending upon whether they are suffered when the tort was committed (direct loss) or whether suffered consequently (consequential loss) – see Hunt v Severs [1994] 2 All ER 385. [Another way of looking at the different kinds of loss is that an immediate and direct loss is one arising out of necessity, whereas a consequential loss may be regarded as one of expediency - see McGregor on Damages, chapter 32.]

Miss Burdis’ car was repaired by a garage and she had paid for the repairs (albeit through Accident Assistance). The Court of Appeal’s decision in Jones v Stroud District Council [1986] 1 WLR 1141 was relevant to this case. The principle in Jones v Stroud was that although generally a claimant must prove that he has suffered a loss, if the extent of the damage is proved and if the property has been or will be repaired, the court should not be concerned whether the claimant pays for the repairs out of his own pocket or whether funds have come from another source. In Burdis, the garage was prepared to discount the repair cost to a factoring agent who effectively purchased the claimant’s debt. But the Court of Appeal said that the claimant should still recover 100% of the repair costs.

vii. Delay in repair

In two of the Helphire cases the repair work was delayed through no fault of the claimants and the hire period had to be extended. In an earlier case of Mattocks v Mann [1973] RTR 13, the Court of Appeal held that for the cost of the hire period to be reduced there must be some finding of an independent cause of loss of her car for that period. In that case, the claimant had taken her car to a reputable repairer but it took twice the estimated time to complete the work and there was a further long delay waiting for the defendants to pay for the repairs, during which time the car was held by the garage. It was held that the claimant was entitled to recover the cost of hiring a replacement car for the full period. In the present cases, the Court of Appeal suggested that the defendant’s insurers should seek a contribution from the repairers for any unjustified length of repair.

viii. Delivery and collection charges

The Court of Appeal said that establishing need applied not only to a replacement car but also to delivery and collection charges. What is reasonable depends on the facts of each case. The proximity of the repairer to the claimant’s home and the suitability of public transport may be relevant.

ix. Engineers’ charges

One of the additional benefits of the Helphire scheme was the services of an inspecting engineer. The report of an engineer may be good evidence that the claimant had done his best to mitigate the loss. But this is irrelevant to the assessment of damages. The real purpose of the inspection was to protect Helphire from inflated repair costs and as such they are not recoverable.


x. Interest

On the basis of the arguments considered above, interest should be allowed on 100% of the repair costs but not on the hire charges as the claimant has not been kept out of his money for these.

xi. Who won round 3?

On the whole this judgment was a victory for CHOs in general and Helphire in particular. Notable successes were:

§ The Helphire scheme was not a sham;

§ The onus was on the insurers to show that a spot rate was unreasonable;

§ Most challenges to credit repair were removed; and (most importantly);

§ It was possible to recover the full credit hire rate if the claimant did not have the means to pay up front

The last issue opened up a huge potential for recovering the full credit hire rate, thereby making the industry profitable again. It is therefore not surprising that insurers sought to appeal the impecuniosity point to the House of Lords.

d. Round 4: Lagden v O’Connor [2003] UKHL 64

The House of Lords treated this appeal as a sequel to Dimond as it was generally accepted that Mrs Dimond had sufficient means to pay for spot hire if she had chosen to do so. But Mr Lagden was different – he was an innocent motorist who, like many, was unable to pay up front for a hire car. In other words, he was impecunious. By a 3 to 2 majority, it was decided that in such circumstances the claimant should be entitled to recover the reasonable costs of a credit hire company.

Lord Nicholls of Birkenhead explained the reasoning behind this decision. He said that the law would be seriously defective if in practice, the innocent motorist who was unable to pay up front was unable to have a replacement car. He said that the common law should never produce a wholly unreasonable result and a negligent driver must take his victim as he finds him. In so doing this judgment overturned a long-established principle that a claimant’s lack of means should not be taken into account in assessing his loss.

Lord Nicholls dealt with the difficult point of what is meant by ‘impecunious’ as follows:

‘Lack of financial means is, almost always, a question of priorities. In the present context what it signifies is inability to pay car hire charges without making sacrifices the [claimant] could not be reasonably expected to make. I am fully conscious of the open-ended nature of this test. But fears that this will lead to increased litigation in the small claims courts seem to me exaggerated.’

The notion that a tortfeasor must take his victim as he finds him derives from the common law principle of foreseeability of damage (often referred to as the ‘eggshell skull’ principle in relation to injury). Not all the House of Lords agreed with its application to credit hire cases. In a minority judgment, Lord Scott said the majority in Dimond did not bar recovery on this basis. It


was on the basis that the additional benefits were not reasonably incurred. If reasonable foreseeability were the sole criterion then Mrs Dimond would have recovered all the credit hire charges.

Lord Walker also dissented from the majority view and said that the exception would lead to an increase in contested small claims, contrary to the public interest. He was quite right to be concerned. What was reasonably foreseeable is that many claimants would in future allege impecuniosity so as to recover the full credit hire rate, subject to it being reasonable.

This judgment was the ‘kiss of life’ to the credit hire industry but the vague nature of the test opened up a whole new series of challenges in county courts throughout the country. Lord Nicholls hoped that insurers and CHOs would be able to agree on standard enquiries, or some other means, to give effect to the test of impecuniosity but this has not happened.

Courts are now dealing with requests for detailed disclosure and Part 18 requests regarding a claimant’s means and there has been a lack of consistency in the way they have been dealt with.

e. Round 5: Bee v Jenson [2007] EWCA Civ 923

Notwithstanding previous successes for CHOs there were still some potential problems in securing exemption from the 1974 Act and difficulty in securing the full credit hire rate if the claimant had sufficient funds to pay up front. Alive to the prospect of new challenges, some CHOs entered into partnerships with some insurers in what has been called ‘credit hire with the credit taken out’.

This is how it works:

§ The claimant’s motor policy includes legal expenses cover (many of them do nowadays);

§ The legal expenses insurer will pay for a replacement car and in return, the policyholder agrees to make a subrogated claim against the negligent motorist;

§ That insurer has an arrangement with a CHO whereby the vehicle is supplied to the claimant at ‘spot hire’ rates and the cost is borne initially by the legal expenses insurer

In this instance the CHO gets a steady stream of new business from the legal expenses insurer and the insurer will no doubt obtain beneficial spot hire rates for bulk purchases. The claimant however is probably unaware of this arrangement and signs a normal hire agreement (not credit hire) showing the standard spot hire rate. But the insurer of the at fault motorist has sought to challenge why they should pay damages to the claimant for a replacement vehicle which has been provided ‘free’ by his insurers.

In the case before the Court of Appeal, Mr Bee, who was an innocent party in a motor accident caused by Mr Jenson, had a motor policy with CIS (who, by the way, were the insurers challenging Mrs Dimond’s claim!). His repairers did not provide a courtesy car so, under the terms of his policy, CIS arranged for legal expenses insurer, DAS, to supply a replacement vehicle from Helphire.

Mr Jenson’s insurers disputed that Mr Bee should recover the cost of the hire car because he had paid nothing himself (it was paid for by DAS) and it was DAS who were liable to pay the hire charges to Helphire. [This is different from a credit hire situation where the agreement is


between the claimant and the CHO and where, in theory, the claimant is liable to pay the hire charges.]

The Court of Appeal said that the claimant had made reasonable arrangements for a hire car and there was no reason why he should not recover damages. It was irrelevant whether the cost was paid by him or someone else. It may be that the damages are tantamount to general damages (i.e. a ‘jury’ award) rather than special damages but that is not significant in this context. Assuming that they are general damages, there is every reason why they should be assessed by reference to the spot hire charge for a comparable vehicle (per Dimond).

It was established in Bradburn v Great Western Railway (1874) that a claimant’s own insurance arrangements cannot be taken into account in reducing the defendant’s liabilities. Therefore Mr Bee was entitled to the reasonable hire cost but, having been fully indemnified by DAS, holds that sum in trust for them and should repay it to them.

3 Other credit hire issues

a. Mitigation

The principle of mitigation of loss underpins many of the ongoing challenges in credit hire cases, in particular:

§ The need for a hire vehicle;

§ The provision of a courtesy car;

§ The type of vehicle hired (like for like);

§ The period of hire; and

§ The hire rates claimed

It is often said that the claimant is under a duty to mitigate his loss but this is not strictly correct.

In Darbishire v Warran [1963] 1 WLR 1067, CA, Pearson LJ said:

‘The true meaning is that the [claimant] is not entitled to charge the defendant by means of damages by any greater sum than that which he reasonably needs to expend for the purpose of making good the loss. In short, he is fully entitled to be as extravagant as he pleases but not at the expense of the defendant.’

The procedural aspects surrounding mitigation of loss may also appear to mislead. Para. 8.2(8) of the PD to Part 16 of the CPR (Statements of Case) says that the claimant must specifically set out in his particulars of claim any facts relating to mitigation of loss or damage where he wishes to rely on them. Strangely, there is no corresponding requirement for the defence in section 12 of that PD. It is strange because the burden of proof in establishing a failure to mitigate his loss is on the defendant (see Garnac Grain Co. v HMF Faure and Fairclough [1968] AC 1130). Defendants should also produce evidence to show that the claimant had not acted reasonably by demonstrating alternative courses of action (see Froggatt v LEP International[2002] EWCA Civ 600).


b. The need for a replacement vehicle

Defendants often rely on Lord Mustill’s comments in Giles v Thompson that the need for a replacement vehicle is ‘not self-proving’. But these words should be considered in the context of his following remarks:

‘… it is not hard to infer that a motorist who incurs the considerable expense of running a private car does so because he has a need for it, and consequently has a need to replace it if, as a result of a wrongful act, it is put out of commission.’

He went on to say that it was for the defendant to displace that inference. So in practical terms, it is usually self-proving and the defendant has to prove otherwise. However there may be circumstances where the need for a replacement vehicle might be challenged, as indicated below.

Suggestions:

§ The claimant may have been in hospital throughout or he may have been planning to go abroad leaving his car behind (per Lord Mustill)

§ Even if the claimant was not in hospital, was he otherwise unfit to drive at the time? (Refer to the medical evidence if he was injured)

§ Does the claimant have another vehicle registered in his name? (DVLA search?)

§ Are there other vehicles within the family that could have been used?

§ If a fleet vehicle, were there others available?

§ Try to establish the mileage covered in the hire vehicle. If it was very low would taxis have been a reasonable alternative?

§ Was there a period before the hire commenced when the claimant was actually without a vehicle? If he was able to manage then, what happened to change the situation? (The same situation may arise if the claimant was without a vehicle after the hire ended)

c. Provision of a courtesy vehicle by the claimant’s insurer

The case of Bradburn established that a claimant’s own insurance arrangements cannot be taken into account and this is supported by Parry v Cleaver [1970] 1 All ER 449.

In Martindale v Duncan [1973] 1 WLR 574, the claimant was trying to recover damages from the defendants insurers but the second string to his bow would be that if this went wrong, he would claim from his own insurers although he would prefer not to do so as this would prejudice his no claims bonus. The Court of Appeal held that in this instance it was not a failure to mitigate to try and recover in the first instance from the defendant’s insurers.

In Mattocks v Mann the defendant argued that the claimant could have mitigated her loss by claiming for the repairs from her own insurers. It was contended that had she done so, the repairs would have been authorised more speedily and the hire period reduced. The Court of Appeal did not criticise the claimant for failing to seek the repair cost from her own insurers and allowed the hire cost in full.


Notwithstanding this line of cases there are grounds for supposing that the courts might take a different view today. Most of the recent cases on credit hire have proceeded on the basis that the claimant had no alternative but to hire a replacement vehicle. That is not the case for the claimant who is offered a suitable replacement vehicle by his own insurer. The courtesy car option is a sensible option for such a claimant and, bearing in mind the objective of reducing litigation, a claimant who ignores that option does so at his own peril

d. Provision of a replacement vehicle by the defendant

There are two recent cases, both involving TNT, which assist here.

In Evans v TNT Logistics Ltd & Admiral Insurance Services Ltd [2007] CC Pontypridd the claimant hired a vehicle from Albany Loss Recovery at £50 per day whilst his own vehicle was undergoing repair. However the defendant TNT had previously offered a similar replacement vehicle at £29 per day. The court held that it was unreasonable for the claimant to bring a claim for damages for the cost of hire at £50 per day, and that that claim should be limited to the cost which would have been incurred had the claimant accepted the defendant’s offer of a replacement vehicle at £29 per day

In Steadman v TNT Express Ltd [2008] CC Dudley the court went a stage further and held that the defendant’s offer of restitution in relation to a vehicle damaged beyond economic repairextinguished the claimant’s right to sue for damages in its entirety. In that case the TNT driver had handed over to the claimant a card at the scene of the accident stating, inter alia, that TNT would accept costs incurred for hire. The Judge concluded that this was sufficient to extinguish the claimant’s loss and that no hire charges were recoverable. He went on to say:-

‘I have previously expressed the view that much of the so-called ‘credit-hire litigation’ may have been avoided, and might still be avoidable, if the defendants or their insurers institute schemes to provide the innocent victims of vehicle damage with suitable alternative means of transport. Such schemes would, if properly formatted, result in claimants being able to avoid loss and thus reduce the volume of litigation in road traffic cases – even though this reduction may be seen as limited to those cases where liability is clear. I have no doubt that such schemes would be very attractive to the victims of such accidents.’

e. ‘Like for like’ vehicles

This is often an issue where the claimant normally drives a prestige vehicle (e.g. a BMW or a Mercedes). As with mitigation in general there may be misunderstanding as to the correct legal position. In Dennard the House of Lords made it clear that the claimant has to establish a needfor a particular vehicle before he can recover the cost of hiring that vehicle. In other words there is no automatic right to hire a strictly like for like vehicle. However in practice, the claimant is likely to recover the full hire charges for a similar vehicle unless the defendant can show that the choice of like for like was unreasonable.

Defendants may try to rely on an old case quoted in Bingham’s: Watson-Norrie Ltd. v Shaw[1967] 111 SJ 117, CA. The claimant company supplied its managing director with a prestige Jenson car. When it was damaged, they hired for him a Rover and then a Jaguar (at a cost of £40 a week) whilst his own car was being repaired. It was held that the full cost of hire should not be recovered and that a Ford Zephyr (probably the equivalent of a Ford Mondeo 2.5 nowadays) at £25 a week would have been a reasonable substitute. The Court of Appeal said it was only necessary to hire a replacement car for a short period and it was not necessarily right to recover the cost of hiring a car equal in value and prestige to the damaged car. Although the


principle established is sound, the way it was interpreted in this case is perhaps a little stringent in today’s climate and defendants should be careful about adopting a similar interpretation.

It is also worth noting that in two subsequent cases, the cost of hiring a replacement prestige car was allowed:

§ Moore v DER Ltd. [1971] 1 WLR 1476, CA; and

§ Daily Office Cleaning Contractors v Sheffard [1977] RTR 361

Claimants may try to rely on HL Motorworks v Alwabi [1977] RTR 276, where the car involved in the accident was a Rolls Royce and a claim was made for a substitute vehicle of the same make. The Court of Appeal said that if it was shown that the use of this car during the hire period was very small or that some other car would be equally suitable, then the claim may have been reduced. But this is something that the defendant must establish. In this case the cost of a replacement Rolls Royce was allowed. However this case was unusual as the claimant was a repairing garage test-driving a customer’s car when it was damaged by the defendant. The customer (who was not a party to the action) would obviously expect a like for like replacement from the garage. The Court of Appeal distinguished the circumstances of this case from those in Watson-Norrie.

f. The period of hire

i. Delay by the repairer

This was considered by the Court of Appeal in Clark. Where the claimant’s car takes longer to repair than expected, the defendant will normally remain liable for the full hire period unless delay was due to a failure to mitigate by the claimant.

ii. Seeking contribution from the repairer

In theory this is possible and may be done by proceedings under s.1(1) of the Civil Liability (Contribution) Act 1978. Those bringing such claims should appreciate that there is a strict two-year time limit which runs from the date of judgment or settlement when damages were awarded or agreed in the action by the claimant. But this will need consideration of the contractual relationship between the claimant and the garage and breach of duty by the garage may not be easy to establish. Foreseeability and remoteness of damage may be relevant and one should also consider the Court of Appeal’s decision in Charnock v Liverpool Corporation[1968] 1 WLR 1498 in relation to what is considered to be a reasonable time in the circumstances of the case.

An example of how complicated this issue can become is in Heap-Hammond v TNT UK, Yeovil County Court, 15 June 2007 (unreported but judgment available on Lawtel). The claimant’s Porsche Boxster was damaged by the negligent driving of the defendant’s employee. All aspects of the claim had been resolved save for the credit hire charges, which totalled £12,028 for a period of 35 days (£248 a day). The main issue in this case was whether the duration of hire was excessive. The defendant joined the repairing garage and the claimant’s own insurer (Norwich Union) as Part 20 defendants.

After the accident, the claimant contacted Porsche, who recommended the garage as it seems they were experienced in repairing this make. The garage did not provide him with a courtesy car and recommended that he contact a CHO, Accident Exchange. There was quite serious


damage to the car and repairs would take some time but the garage made no promise as to the completion date. The court’s findings were as follows:

§ The claimant had not demonstrated any conscious step to mitigate his loss;

§ He was a business development manager and was far from being impecunious, therefore he was entitled only to the spot hire rate (£213 per day);

§ The garage had carried out the repairs within a reasonable time and the defendant’s Part 20 claim against them failed;

§ There was no implied contractual term to suggest that Norwich Union was obliged to ensure that repairs were carried out within a reasonable period – they were not a guarantor of the garage’s performance. The Part 20 claim against the claimant’s insurer also failed

iii. Total loss claims

A total loss claim is most likely to arise when a low-value vehicle sustains moderate damage. It is usually more economical to deal with the loss as a ‘write off’ rather than have it repaired. If the claimant is impecunious he will not be able to purchase a suitable replacement until he is provided with the funds. If there is delay, the hire charges may well exceed the total loss value.

If the vehicle is covered for accidental damage to his vehicle, he may make a claim against his own insurer. But there is often much haggling about the pre-accident value and the defendant’s insurer might wish to settle with the claimant directly to avoid extending the hire period. If this is not done, the claimant’s insurer will make a subrogated claim in any event. If a low-value car is involved there may not be any accidental damage cover anyway.

g. Impecuniosity

This issue was decided by the House of Lords in Lagden. The position is that a claimant who is impecunious may be able to recover the full reasonable credit hire rate whereas those with available funds may be able to recover only the reasonable spot rate (per Dimond). Therefore it is not surprising that most claimants allege that they are impecunious.

There seem to be differing opinions about the evidential burden of proving (or disproving) impecuniosity. The matter is settled by the speech of Lord Hope in Lagden [para. 34]:

‘It is for the defendant who seeks a deduction from expenditure in mitigation on the ground of betterment to make out his case for doing so… It has to be shown that the claimant had a choice, and that he would be able to mitigate his loss at less cost. The wrongdoer is not entitled to demand of the injured party that he incur a loss at less cost, bear a burden or make unreasonable sacrifices in the mitigation of his damages.’

The key to the issue of impecuniosity is whether or not the claimant had a choice at the material time. Lord Hope said in Lagden [at para. 42]:

‘In practice the dividing line is likely to be between those who have, and those who do not have, the benefit of a recognised credit or debit card. It ought to be possible to identify those cases where the selection has been made on grounds of convenience only without much difficulty.’

In Thompson v Vincent Haulage Ltd [2008] CC ( Preston) the claimant was a self employed electrician with earnings of around £13,000 pa, savings of £2,000, and with a credit card facility


up to £1,000. The Judge held that the claimant was not impecunious and that it would not have placed an undue burden on him to have hired at ordinary rates from an ordinary hire company. His claim was therefore limited to spot rates

h. Evidence of comparable rates

Notwithstanding the issue of impecuniosity, there may still be a mitigation argument aboutwhether or not it would have been reasonable for the claimant to have obtained a suitable replacement vehicle at a significantly lower rate in his locality. If the defendant seeks to argue that the claimant was able to make a choice between spot hire and credit hire and simply chose the latter for convenience, the defendant will need to produce evidence of the spot hire rates that were reasonably available.

In Burdis, the judge at first instance had adopted an average rate based on expert opinion in what was called the Mainz report. The Court of Appeal rejected this approach, saying that a claimant should be entitled to the actual cost of hire, not an average. He can go round to the nearest hire company and is prima facie entitled to recover the amount charged whether or not the charge is at the top of the range of car hire rates. The claim will be based on evidence of the rate charged in the relevant area. Thereafter the evidential burden passes to insurers to show that this rate is unreasonable and that the reasonable course would be to use another company which charged a lower rate.

The words ‘in the relevant area’ are important. Rates will fluctuate with areas (the London area will be usually the most expensive) and it is the rates that are local to the claimant that are relevant. Rates also fluctuate seasonally so it is the rate that would have been available to the claimant at the time he needed to hire a replacement that is also relevant. There may also be an issue about whether that particular type of vehicle would have been available for hire at that time. In fact there are so many variables that it may not be difficult for a claimant to challenge the defendant’s evidence on comparable rates. Another possible challenge is whether the individual claimant could have hired the vehicle allegedly available at those spot rates. For example, he may be under 21 or have driving convictions which made him ineligible for spot hire.

Comparison must be on a ‘like for like’ basis. The basic rate is often subject to extras such as CDW, insurance, delivery, VAT etc. Credit hire rates are sometimes deceptively low but are boosted by what may appear to be excessive extra charges.

Evidence of comparable rates may be obtained by either:

§ Lay evidence supported by ‘documents’ (including internet downloads); or

§ Expert evidence

Expert evidence may not be appropriate in cases allocated to the small claims track in view of the restriction on recoverable fees

i. ‘Sham’ agreements

In Snook v West Riding Investments [1967] 2 QB 786, the Court of Appeal said that for all acts or documents to be a sham the parties must have a common intention that they do not create the legal rights or obligations that they appear to do. The Court of Appeal in Clark decided that on the facts of the Helphire scheme concerned in those cases, the agreements were not a


sham or pretence. It was quite clear that none of the parties in those cases had any improper motive. But this does not necessarily mean that the issue of sham or pretence is dead in relation to other credit hire schemes. Also, there may be other schemes which may not come within the narrow definition in Snook but which may have some doubtful features.

The scheme operated by one particular CHO, Accident Exchange, was scrutinised by the court in Corbett v Gaskin, Oxford County Court, 31 August 2007 (unreported). Accident Exchange is a significant operator in the credit hire market, with a turnover of £117m. and pre-tax profits of £13.6m. in the 2007 financial year. The company specialises in the credit hire of luxury cars with rates of up to £400 a day.

Like many CHOs after Clark, they set up a network of associated companies to ensure exemption from the 1974 Act. There is nothing wrong in principle with this arrangement but there were two significant differences in the Accident Exchange scheme:

§ The legal expenses insurance premium was extraordinarily cheap (75p a day) and no claims appear to have been made on the policy; and

§ The associated companies referred to in the contract either did not exist or were dormant

Corbett was heard by HHJ Harris QC, a judge who has considerable experience of credit hire cases and who was complimented by the Court of Appeal in Clark. He criticized the Accident Exchange agreements as ‘complex and misleading’ but declined to accept that the contract was a sham because the main object of the agreement (the provision of a replacement car to the claimant) was achieved. A subsequent case of Barker v First West Yorkshire, Leeds County Court, 13 September 2007, was decided along similar lines.

However, as Accident Exchange customers are often drivers of luxury vehicles, one assumes that they are affluent and may be open to challenge if they claim to be impecunious. If so, damages should be limited to reasonable spot hire rates. There may also be arguments about the need for an absolute ‘like for like’ vehicle in cases where the normal car is a top of the range model.

j. MIB cases

If a claim is made against an offending motorist who has no insurance, the claim may be directed to the Motor Insurers Bureau (www.mib.org.uk). Alternatively, the motorist may be insured but in some cases, the policy may not be effective (e.g. it is purported to have been cancelled during the period of insurance). In certain limited circumstances, the insurer has to deal with that claim under what is known as Article 75 and in this situation, the insurer ‘stands in the shoes’ of MIB and operates the MIB Uninsured Drivers Agreement.

The Uninsured Drivers Agreement 1999 is a complex document containing some important conditions and exceptions to MIB’s liability. Exceptions relevant to credit hire cases are:

§ Clause 6.1(c): claims for the benefit of someone other than the claimant where the cause of action has been assigned to that beneficiary or pursuant to the beneficiary’s contractual or subrogation rights; and

§ Clause 17.1: where the claimant has received compensation under an insurance arrangement


The subrogation exclusion makes sense when an insurer is seeking to recover payments made under a policy for damage to a vehicle. Motor insurers fund the MIB so they would in effect be claiming against their own fund. This is not the case where a CHO is claiming under subrogated rights but MIB’s present policy is to refuse to pay credit hire rates and to offer spot rates only.

[This is being challenged in a case of McCall v Poulton to be heard shortly by the Court of Appeal.]

k. Uninsured driver

In Smyly Agheampong v Allied Manufacturing (London) [2008] CC London the claimant was seeking damages from the defendant following a road traffic accident. The claimant's vehicle had been hit, whilst parked and unoccupied, by a lorry driven by the defendant's employee. The claimant did not have compulsory third party motor insurance. Although liability was admitted and damages paid to the claimant representing the pre-accident value of the vehicle, the claimant sought to recover credit hire charges totalling £34,067 together with storage and recovery charges of £765.

The court was asked to determine whether the claim for damages was a claim founded on illegality in which case the principle ex turpi causa non oritur actio (the law ought not to compensate people who have suffered loss in the course of their own wrongful actions, even where the primary cause is attributable to someone else) applied. The claimant argued that the lack of insurance was not a causative factor. However, the court found that the claimant was an unsatisfactory witness who had intended to drive without insurance throughout the 341-day hire period. Accordingly the claimant's claim failed as it fell squarely within the ambit of the ex turpi causa principle.

Comment

Although this is a first instance decision, this case has brought a certain amount of clarity to an uncertain area of law. It is clear a failure to insure will not trigger the ex turpi causa principle, ie. defeat a claim altogether. It does, however, highlight a change in the court's attitude towards claims involving uninsured drivers and their willingness to adopt the principle so as to prevent an uninsured claimant receiving damages in full on the grounds of public policy. This is undoubtedly a step in the right direction and one which could ultimately result in insurers making significant savings.

Berrymans Lace Mawer 2008

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09 Motor Claims Rodney Wilson Andrew Hibbert · Rodney Wilson Partner, BLM Liverpool 20 November...

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