Business Use of Vehicles and Need – Hire

This business use of vehicles and need in hire cases has received surprisingly little attention over the years. It's actually a distinct topic (albeit there are elements which overlap) to “need” in the case of a private motorist, a topic which I covered in the article “Credit Hire and Need”. Indeed, it's a topic in its own right, which merits separate discussion.

This article will attempt to clarify this topic in easy terms. This article will deal with the topic in the following way:

(a) relevant cases that may assist with business use of vehicles and need;

(b) principles and

(d) conclusion.

Relevant cases that may assist with business use of vehicles and need

In Park Lane BMW v Whipp, (unreported) 20 May 2009 Judge Harris stated: “It might have been possible for Park Lane to have called evidence to establish that it had or would have had the need to use the limousine showing what his diplomatic commitments were or were expected to be and explaining what the substitute car was in fact used for. But it did not bother to do so. Consequential loss, special damage of the type here, does not prove itself.”

Park Lane BMW v Whipp was cited in Hardip Singh v Rashed Yaqubi [2013] EWCA Civ, which is a Court of Appeal case to which surprisingly little focus has been paid in relation to business use of vehicles and need.

This was a case which involved a high value claim for hire charges by Mr Singh. Whilst it was a personal claim made by Mr Singh, he was in a business partnership and one of the fleet of seven vehicles owned by the partnership was involved in a minor accident. There was a claim for hire for just under £93,000. A number of issues were dealt with in this case, but this article will be focussing just on the issue of “need” which was dealt with in this case. The Court of Appeal found that the trial judge was entitled to find that the partnership had not established need.

A number of relevant parts can be referred to from this judgment by the Court of Appeal, namely:

Lord Mustill's famous quote in Giles v Thompson [1994] 1 AC 142 was referred to namely that (paragraph 27) “The need for a replacement car is not self-proving" and that for a “private motorist” who had gone to the considerable expense of running a motor vehicle, it was not difficult to draw an inference that need was established, albeit there was “ample scope” to displace this inference. Of course this was not a private motorist case, something which I will address later in this article.

(a) The Court of Appeal (paragraph 28) referred to the “great problems” Judge Cowell (trial judge) mentioned namely “the absence of detailed evidence”. The Court of Appeal had noted that (paragraph 28): “The trial judge had given the hypothetical example of a self employed plumber in this case? What would a (a) self employed plumber require. There were two matters mentioned by the trial judge namely: “...first, he would give evidence of his actual use prior to the accident of his vehicle damaged in that accident, perhaps by reference to his diary that he would exhibit, though he would not have to exhibit any document for he might remember where he was during that period. At any rate, if there are documents he would refer to them and he would say ‘I am reminded by looking at my diary which is exhibited that I made four journeys to such and such a place with all my equipment in my car; the following week I did this, that or the other’ and so on. Then, secondly, one would advise him as a claimant to say what use he made of the hired vehicle, for example, where did he go during the course of the hire...”.

(b) The Court of Appeal (paragraph 39) stated that “For such a business claim to succeed, the judge was entitled to require specific evidence of need, such as evidence of the actual use of the vehicle for business purposes before the accident and the use to which the hired vehicle was put during the period of hire. Such evidence as was given, was vague and non-specific and the judge was entitled to hold that the need for a replacement Rolls Royce had not been established.”

(c) The trial judge was quoted (in paragraph 28) who stated that the defence complaining “...there was no detail given of the user of each of the other vehicles and when they were used ...could be said to be going a little far...”.

(d) Judge Cowell was further quoted (in paragraph 29) namely: “that the Rolls-Royce was used during that period, he said, for moving clients around” was of a “....very general kind...”. There was no detail whatsoever.

(e) It was noted that (paragraph 29) Judge Cowell had stated that “...there is no evidence in any of the witness statements of any detail of the user, so this case does raise the extremely important point: should not the same sort of evidence which I have given in the hypothetical case of the plumber have been given in this case? If it had been given, if only at the witness statement stage, exhibiting such documents as there are (and I am aware that not everything is to be proved by documentation), such as statements by the drivers identifying the celebrities and dates, if that sort of evidence had been given it would give substance to the evidence of the claimant, even that the need was to maintain his image...”.

(f) According to Judge Cowell, quoted in paragraph 29 of the Court of Appeal judgement “It seems to me that if the inference can be displaced that there is need, in this case by the fact that there were six other vehicles, then the burden must shift to the claimant to give detail, in this case in particular of what the actual use of the Rolls-Royce before the accident was and what it was of the hired car afterwards.”

(g) In a claim such as the present case, it is “...for such a large sum ...the cogency of the claimant's evidence should be all that much greater.” - these comments of the trial judge were cited in paragraph 29 of the Court of Appeals judgement.

(h) There was no clear evidence of need, and the hire claimed was dismissed by the trial judge (paragraph 30).

(i) The Court of Appeal stated (paragraph 31): “Reasons were given for the use of the other vehicles on the fleet included the claimant's wife using it to drop and pick the children from the school and his brother using it, though the judge commented “I do not know what it had to do with the partnership.”

(j) It was noted in paragraph 31 that the trial judge had “...made no specific findings as to which of the vehicles, if any, could have substituted for the damaged Rolls Royce...” and his conclusion was based “on the absence of evidence of need....”.

(k) In the judgement of the Court of Appeal it was stated that “...there was a burden on the appellant to show a reasonable need for a replacement Rolls Royce during the period of repair. The required need was, as the case was put and on the judge's agreed findings, the need of the partnership. Such need is not self proving (Lord Mustill in Giles). That is the first question and, if need is not proved, detailed questions arising out of the reasonableness of measures in mitigation do not arise.” - (paragraph 33).

(l) It was further stated that: “Need was put in issue in the pleaded defence and at the hearing before the judge. It was for the appellant to establish it. The judge was not required, on the evidence, to infer it. If the appellant had established it, it would have been for the respondent to show that the need had not been met in a reasonable manner” - (paragraph 38).

Principles

In my view the following very interesting principes can be deduced, namely:

(a) On “need” to hire, the focus is on needs of the business, not personal needs.

(b) Whilst an inference of need in business cases (the circumstances of the inference are discussed in the next paragraph) can be drawn (like a private motorist), the defence can seek to displace this by for example showing that there were other vehicles in the fleet.

(c) In Giles v Thompson it was stated for a “private motorist” an inference for need could be drawn from the fact that the claimant has paid considerable expenses for the motor. Giles v Thompson was mentioned in Hardip. Whilst Giles v Thompson specifically refers to a “private motorist”, there is nothing to state that that a similar threshold for need does not apply to “need” for a business. It is therefore certainly arguable that a business paying for the expenses for a motor vehicle for business purposes is sufficient to draw an inference of need.

(d) It follows from (c) that it is arguable that there is a low threshold for an inference of need to be drawn in cases of business use also.

(e) The question of how a defendant can displace such an inference is a factual question and presumably there are a number of ways of doing this. One clear example given is in Hardip where Judge Cowell stated “It seems to me that if the inference can be displaced that there is need, in this case by the fact that there were six other vehicles...” - the Court of Appeal did not disapprove of the trial judge's judgment on this.

(f) If the defence displaces the inference of need, this shifts the evidential burden to the claimant to prove need.

(g) Following on from (f) in order to satisfy need for business use, the claimant needs to produce evidence of usage of the damaged vehicle for business purposes before the index accident and the use of the hired vehicle.

(h) If there is documentary evidence for the use of the damaged vehicle before the index accident and the hired vehicle, then this should be produced. Otherwise witness evidence without documentary evidence may be sufficient, depending on the circumstances of the case. Witness evidence would be the minimum, but in any event the evidence should be clear and specific, not vague.

(i) Following on from (h), the claimant does not need to provide details of the usage of the other vehicles in order to establish (establish is not the same as proven) “need” – albeit for all practical purposes if the defendant will be able to show there were other vehicles on the fleet, then claimant may as well pre-empt that in advance and produce such evidence in order to seek to prove (not just establish) need. This is because the claimant has established need, and the evidential burden has passed to the defendant to show that the claimants did not need to hire a vehicle. The claimant has satisfied the evidential burden in the case for need. It's now up to the defendant to show that the claimant has failed to mitigate (discussed below).

(j) whilst Judge Cowell in Hardip stated that the claimant having to produce evidence for each and every fleet vehicle their usage was “going too far”, this was only in the context that need had not been established in the first place in that case In my view where need has been established then this does not prevent a defendant from showing there were other vehicles on the fleet that were available to use by reference to evidence of their usage. In Hardip it was stated that where a claimant had established need the defendant could seek to show “...that the need had not been met in a reasonable manner.” - paragraph 38 in Hardip. I would state that another way putting this is to say the claimant failed to mitigate. In my view where a claimant has established need (which was not established in Hardip), a defendant can seek to show that the claimant failed to mitigate by referring to the evidence of the usage of other vehicles on the fleet.

(k) Therefore, it is very important that at the standard disclosure stage, the defendant ensure that they ask for relevant disclosure on the list of documents. In my view the claimant would be obligated to have on the list any documents pertaining to the use of the vehicles on the fleet. If the information is not on the list, then the defence may feel obliged to apply for specific disclosure if requests for it do not succeed.

(l) In my view in circumstances where the claimant has established need for a vehicle, there is nothing to stop a defendant from relying upon evidence of usage of the other vehicles on the fleet to show a lack of mitigation by the claimant. This is merely reflecting the basic common law position: namely the claimant can with sufficient evidence establish that there is a need, but the defendant can seek to prove the claimant acted unreasonably in not mitigating for example by failing to utilise a “spare” vehicle on the fleet. In Hardip Singh there was insufficient evidence of need for business purposes in the first place as no detailed evidence of usage of the damaged vehicle and the hire vehicle were provided, “...therefore detailed questions arising out of the reasonableness of measures in mitigation do not arise.”, according to the Court of Appeal (paragraph 33).

Conclusion

The legal burden of proof is always upon the claimant to prove need. This does not change for the business use of a hire vehicle. In my view the threshold for an inference of need to be drawn is low (as in the case of a private motorist). It is certainly arguable (though not clear cut) that a business providing evidence of considerable expense for a motor vehicle for business purposes can lead to an inference that the claimant needed a hire vehicle. However, any inference can be displaced by the defendant, for example by showing that there were other vehicles on the fleet. This shifts the evidential burden on to the claimant to prove need which for a business requires showing by detailed evidence, the use of the damaged vehicle for business purposes before the index accident and the use of the hired vehicle. However, the matter does not end there, as the defendant can then seek to show that the claimant failed to mitigate for example by showing the evidence of the usage of the other vehicles on the fleet – this just reflects the basic common law position.

It is very much hoped that this article sheds lights on this very important topic.

Please note this article does not constitute legal advice for any specific case or cases or for any circumstances and should not be relied upon for such.

© Mohammed Azeem Ali 2025 |  21/04/2025