Credit Hire and Need

In almost every case I have been involved in credit hire for over 25 years, the need for hire has been disputed in the pleaded defence. It is one of the most central issues in credit hire. The importance in law to credit hire and need can be underlined by fact that it is referred to in CPR Practice Direction 16, paragraph 6.3 as something that “must” be pleaded in the particulars of claim.  Nevertheless, it is commonly thought that there is a low threshold to establish need. Yet this has in my view often led to complacency on the issue of need from parties. Some of the reported and non-reported cases will reveal that it is not altogether unusual for claims to be dismissed because need is not proven on the facts of the case.

From my experience, insufficient attention has been paid to this important subject of “need” over the years, leading to an unexpected dismissal of some credit hire claims. Indeed, the first civil case I did as a pupil barrister was a small claims credit hire; the judge dismissed the claim due to a lack of need. The matter was appealed and swiftly set aside as being wrong. This was in 1999! It was caused by the judge not recognising the difference between a legal burden and an evidential burden, something of central importance in any credit hire case – I will address this issue later in this article. 

This article will be divided in the following way:

(1) what is need for hire in credit hire? 
(2) on whom is the legal burden to prove need? 
(3) the distinction between the legal burden and the evidential burden on need;
(4) the implications of the interplay between the legal and the evidential burden and
(5) conclusion.

Please note this article does not deal with need in taxi cases, delivery driver cases or business use. This article also does not deal with whether a claimant is entitled to a “like for like” vehicle (a subject for another article). 

What is need for hire in credit hire?

In Giles v Thompson [1993] 2 W.L.R. 908, 167 the House of Lords referred back to the lower court decision being appealed, in which the county court judge had stated: 

 “As a matter of principle . . . if you deprive me of an article of use to me, you have no complaint whatever if I hire another to replace it . . . If I have a car simply for my own pleasure, I regard it, in principle, [as] wrong that I should be required, before being able to hire a car and charge it to the wrongdoer, to prove that I need it as opposed to merely desire the use of it.” 

This was rejected by the House of Lords, as it is “need” for hire that is required. The “desire” to hire is not the same as the “need” to hire. 

The House of Lords also stated that the need to hire is “not self-proving" - I have seen reference to these words “not self-proving" in almost every single pleaded defence in credit hire cases. The House of Lords gave examples of when need is not satisfied, such as when: 

“The motorist may have been in hospital through the accident for longer than his vehicle was off the road; or he may have been planning to go abroad for a holiday leaving his car behind; and so on...”.

The words “so on” suggest that these two examples are not exhaustive in anyway – Humayum Hussain v Eui Limited [2019] EWHC 2647 (QB), (para 10) confirms this; the non-binding county court case of Harston v National Farmers Union Mutual Insurance Society [2021] 11 WLUK 681] also shares this assessment (paragraph 21).

Whilst the House of Lords gave two examples of where there was no “need” for a hire vehicle, there is no specific meaning given as to what “need” in a legal context means. I suppose it is a question of fact in each case as to whether need has been fulfilled. The word “need” should be given just its natural meaning, depending on the facts of the case. However, I would want to venture further than this, in order for the reader to better understand what “need” in credit hire means in practise.

What is clear is that “desire” to have a hire vehicle is not sufficient and does not amount to a “need”. In my view the words “required” to hire a vehicle may be another way of understanding “need” in a legal context. Looking at the two examples given by the House of Lords, one does not “require” a hire vehicle if you are in hospital or are abroad. I am not persuaded that need means that it is “necessary” to hire a vehicle – that might be too high a hurdle. For example, if you could commute to work in a car which takes 30 minutes in total (door to door) and you are young and able bodied, could it be argued that because post-accident you are able to take a bus which takes about 1 hour in total (including walking to and from the bus stop and waiting times) that you did not need to `hire a vehicle? It clearly would not be necessary in the sense that there was no choice but to hire, as public transport was still a feasible option. However, it could be argued that in this situation even a young and able-bodied claimant “required” the use of a hire vehicle, as public transport would be too inconvenient.

From my practical experience, the claimant being able to use public transport is generally not accepted in courts as being able to displace the need for hire, though it all depends on the specific facts of the case. I have in my own cases only seen a court decide once that there was no need to hire a vehicle, as the claimant could have used public transport. I consider that case to be an “outlier” of a decision. From my experience, need is more likely to be displaced when it can be shown that a claimant has access to alternative vehicles in the house, which would satisfy the claimant's requirements.

From my experience, the word “required” to hire may be another way of understanding what “need” actually means. In my view, the word “need” straddles the middle ground between “desire” to hire (firmly rejected by the House of Lords) and it being “necessary” to hire (which from my experience takes it too high).

It would be fair to say the threshold to prove need is low; however, that threshold is not to be underestimated.

On whom is the legal burden to prove need?

The legal burden to prove need for hire is on the claimant. In Hardip Singh v Rashed Yaqub [2013] EWCA Civ 23, Lord Justice Pill stated (paragraph 33):

“In my judgment, there was a burden on the appellant to show a reasonable need for a replacement Rolls Royce during the period of repair.”

Indeed, the words used in Giles v Thompson that need is not “self-proving”, also seems to suggest that the legal burden is upon the claimant to prove need.

The standard of proof will be as usual in civil cases, namely a balance of probabilities.

The distinction between the legal burden and the evidential burden on need

From my experience, one of the most misunderstood aspects in credit hire is the difference between the legal burden and the evidential burden. This can confuse matters.

The legal burden for need is always on the claimant's shoulders and this never shifts to the defendant. I often hear references to the “burden” being on the claimant or the “burden” being on the defendant in credit hire cases. In my view this is never helpful, unless and until the burden is referred to as either the legal burden or the evidential burden. The legal burden is always on the claimant.

The evidential burden, however, can shift on to one party or the other depending on the circumstances of the case and as the evidence in any trial unfolds. In fact, the evidential burden can shift between the claimant and defendant many times in a case/trial, depending on what evidence is given before the court.

Indeed, in Giles v Thompson itself we can see in my view reference to the evidential burden. In Giles v Thompson [1993] 2 W.L.R. 908, 167 it was stated by Lord Mustill:

“Thus, although I agree with the judgments in the Court of Appeal that 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 the result of a wrongful act, it is put out of commission, there remains ample scope for the defendant in an individual case to displace the inference which might otherwise arise.”

In my view what this paragraph effectively means is this:

(1) when it states that 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 hence the need for hire), this results in the evidential burden shifting to the defendant;

(2) this evidential burden (as opposed to a legal burden) can be shifted back to the claimant with there being “ample scope” for the defendant to displace that inference that need is made out, with other evidence.

The implications of the interplay between the legal and the evidential burden

So, the implications between the legal and the evidential burden are in my view as follows:

(1) the legal burden always remains on the claimant;

(2) the evidential burden can shift a number of times between a claimant and a defendant during the course of a trial;

(3) for a motorist who incurs the considerable expense of running a private car it can be inferred that s/he does so because there is a need for it (and hence the need for hire) - paying for the insurance, road tax and MOT could be considered a considerable expense. This could be said to shift the evidential burden to the defendant.

(4) the defendant can displace that inference with any satisfactory evidence, for example, the claimant would be in hospital, on holiday, or the claimant had an alternative vehicle which meant a hire vehicle was not required – these are not exhaustive examples.

(5) if the defendant cannot shift that evidential burden back to the claimant, then the claimant will have proved on a balance of probability that s/he needed a hire vehicle;

(6) the threshold to fulfil need can be considered to be low, but that threshold can easily be underestimated;

(7) A good working example of the interplay between the fixed legal burden and the shifting evidential burden is this: a Claimant produces evidence that s/he has paid for the car insurance, MOT and road tax. This creates an inference of need and creates what I would call an “evidential” burden on the defendant to displace that inference. The defendant can however show that the claimant had other vehicles available to her/him – this displaces the “inference” that there is need and the evidential burden shifts back to the claimant, and s/he needs to show why those other vehicles would not fulfil his/her requirements;

(8) So, whilst the legal burden remains static, the evidential burden can shift many times during a trial.

Conclusion

In conclusion:

(1) need is one of the most important issues in credit hire;

(2) The word need for hire is not given any specific meaning; it seems that “need” is to be given just its ordinary natural meaning. What is clear is that a “desire” to hire is not sufficient;

(3) in my view and from my experience the need to hire really straddles the line between the desire to hire and the necessity of hiring. Another way of understanding “need” would be to see it as being “required”;

(4) the legal burden to prove need is always on the claimant, the standard being on a balance of probability. The legal burden never shifts.

(5) it is however relatively easy for an inference to be drawn that if the claimant is paying for the MOT, insurance and road tax, then s/he needs a hire vehicle;

(6) in my view what this inference effectively means is that the evidential burden shifts to the defendant to show that need was not satisfied;

(7) nevertheless, the inference can be displaced by the defendant, for example, if the claimant would be in hospital for longer than the hire or was planning on going abroad for a holiday (two examples specifically cited in the House of Lords decision in Giles v Thompson). Another example can be if the claimant has another vehicle that could have been used instead and could have met the claimant needs;

(8) if the defendant is unable to displace the inference that the claimant needs the vehicle, then the claimant is likely has satisfied need on a balance of probabilities;

(9) from my experience, the claimant being able to use public transport is generally not accepted in courts as being able to displace the need for hire, though it all depends on the specific facts of the case and there can also be “outlier” cases on this issue;

(10) from my experience, a court looks at a claimant having access to other vehicles which satisfies his/her requirements more favourably as not fulfilling need, though it all depends on the specific facts of the case.

(11) The legal burden remains static, though the evidential burden can shift many times during a trial.

(12) whilst the threshold can be considered to be low, that threshold should not be ever be underestimated and should be shown due respect.

Please note this article does not constitute legal advice for any specific case or cases or for any other situation.

© Mohammed Azeem Ali 2024                                                                   September 2024