Law report: Bentley hire recoverable 
but door open for argument

W v Veolia Environmental Services (UK)
Queen's Bench Division, 27 July 2011

The claimant’s Bentley was struck by the defendant’s refuse truck on 12 December 2008. On the recommendation of the repairing garage, the claimant was referred to credit hire company, Accident Exchange.

He hired a Bentley Continental while his vehicle was repaired, which was delivered to his home where he signed a rental agreement and insurance application provided by the driver. The claimant assumed a liability for the hire charges which were deferred. The charges not recovered within the deferment period were insured by an insurance policy and the hire period was limited to 85 days.

A second agreement, covering a further period, was sent to the claimant, which he signed and returned. The hire lasted 135 days and charges totalled £138 000. Proceedings were brought to recover the sum and, as the issue of The Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc. Regulations 2008 was raised by the defendant, a claim was made upon the policy to discharge the charges, notwithstanding that the indemnity limit on the policy was £100 000.

The court addressed whether (1) the charges were irrecoverable under the Regulations; (2) payment of the hire rendered the unenforceability argument irrelevant; (3) payment was a failure to mitigate by the claimant; and (4) the claimant was impecunious.

The court found that (1) the first agreement was unenforceable under the Regulations (subject to point (2)) but the second agreement (sent by post without a representative visiting) did not fall within the Regulations. (2) As the hire had been paid it was recoverable regardless of the claimant’s liability for the charges prior to that payment. There was no double recovery as the contract of indemnity insurance subrogation prevented this. (3) Payment of the hire was not a failure to mitigate by the claimant. While the decision to pay was tactical the motive did not invalidate the transactions. (4) The claimant was entitled to recover the full rate as he was impecunious.

Comment
While the court rejected the enforceability argument in this case, it does continue to leave the door open for arguments as to the recoverability of hire where the rental agreement is subject to the Regulations and does not comply, and the hire has not been paid under an insurance policy.
Sarah Cartlidge, BLM Manchester