Credit Hire: Is a claimant entitled to a “like for like” hire vehicle?

The issue of whether a claimant is entitled to a “like for a like” vehicle or is s/he only entitled to a vehicle which just fulfils the claimant's reasonable transport needs, is a very common situation in credit hire cases.

This deals with the topic as follows:

(1) Executive summary

(2) What is a “like for like” vehicle?

(3) Relevant cases;

(4) Analysis of the cases;

(5) Is a claimant entitled to a “like for like” vehicle or just a vehicle which fulfils her/his reasonable transport needs?

Executive Summary

Despite this being a critical issue which almost always gets raised in defence pleadings, it is a subject where there is not much comprehensive treatment, so this article does require a painstaking analysis of a number of cases (and therefore your patience as the reader).

Notwithstanding defence pleadings, when it comes to trial, parties at court will often (though not always) just proceed on the basis that a claimant is entitled to a “like for like” vehicle, notwithstanding there being both higher and lower court cases for and against the proposition. In the author's view though, there isn’t a substantial “conflict” between those reported cases.

The legal burden is always on the claimant to show s/he was entitled to a “like for like” vehicle; however, it does not take much for a claimant to shift the evidential burden to the defence - for example on his/her witness statement the claimant states a new and “large” car was required, then it is really for the defence to displace that.

The test in my view is this:

A claimant is entitled to an alternative hire vehicle which fulfils his/her reasonable transport need which may include a “like for like” vehicle, depending on the circumstances of the case.

The claimant will however have to legally prove that her/his reasonable transport needs included a “like for like” vehicle – claimants can generally place the evidential burden upon the defendant. From my experience the net effect is that in most cases (not all), a claimant can prove that s/he was entitled to a “like for like” vehicle. However, in a minority of cases, the defence can displace that evidential burden for example in the case of Chatterton where the claimant admitted himself in his Part 18 responses that a lesser vehicle would have been sufficient. It does however, depend on the full circumstances of the case.

What is “like for like”?

What are the parameters to define a “like to like” vehicle? An essential question in my view, but a question often overlooked.

Some assistance is contained in Watson Norie Limited v Shaw & Nelson (1967) 1 Lloyd’s [1967] 1 Lloyd Rep 515,518 in which Lord Russell stated:

“In a case like this, where hire is necessary for a short period, I do not think it is correct to say that the plaintiff is entitled as an axiom to put upon the defendants the burden of the cost of hiring a car equal or substantially equal in quality, value and prestige to the damaged car” - bold is my emphasis.

A “like for like vehicle” is looking at a hire vehicle which has a similar quality, value and prestige to the damaged vehicle. Despite the term “like for like,” from my experience courts are not looking at the same value, same age and same size, which would be impractical and unworkable. “Like for Like” also does not necessarily mean the same make and model, though this would be a fact specific exercise. Watson Norie Limited v Shaw & Nelson refers to a vehicle which is “equal or substantially equal” [underline is my emphasis].

Relevant cases

In Watson Norie Limited v Shaw & Nelson (1967) 1 Lloyd's Rep 515,518 Lord Russell stated:

“The test is whether the hiring cost is no more than reasonably necessary to fill the time gap, having regard to the purpose for which the plaintiff company needed to hire a car.”

In Julian Dennard v Robert Plant ([2002] EWCA Civ 510), para 27 the Court of Appeal stated that:

“Then the question arises as to whether the cost of hiring an equivalent car is recoverable if the claimant hires a car from Helphire which is inferior to his own damaged vehicle. This is what Mr Dennard did and the judge found that he could only recover the spot rate for the car he actually hired.”

In Julian Dennard v Robert Plant ([2002] EWCA Civ 510), para 133 the Court of Appeal also stated that:

“In the present case the loss suffered by Mr Dennard was the cost he had to pay for the hire of the Vectra, not the amount which he might have paid for the hire of another car...a person who does not incur the cost of hiring a sports car cannot recover more than the costs actually incurred. Mr Dennard expressed his satisfaction with the Vectra and upon the facts it would not have been reasonable for him to insist upon a replacement sports car. However, if a need for a particular replacement car is established, then the cost incurred of hiring that car is recoverable.”- underline is my emphasis only

In Lagden v O'Connor ([2003] UKHL 64), paragraph 27, the House of Lords stated that:

“If the defendant can show that the cost that was incurred was more than was reasonable — if, for example, a larger or more powerful car was hired although vehicles equivalent to the damaged car were reasonably available at less cost — the amount expended on the hire must be reduced to the amount that would have been needed to hire the equivalent.” - underline is my emphasis only.

In Bent v Highways & Utilities ([2011] EWCA Civ 1384), para 65, Lord Aitken stated that that one of the questions was:

“(ii) was it reasonable, in all the circumstances, to hire the particular type of car actually hired at the rate agreed.”

In Charles Gow v NFU Mutual Insurance [2016] 5 WLUK), HHJ Bailey decided that the claimant whose “supercar” was damaged in a road traffic accident, had established a need to hire a car of a supercar’s prestige whilst his own was being repaired. The judge found that for Mr Gow, his personal status was so important to have as a symbol which he enjoyed not just in his business but also in his day-to-day driving. This is of course a non-binding decision.

In Chatterton v Axa Corporate Solutions ([2016] 8 WLUK 78) HHJ Rawlings stated that the above comments made by the House of Lords in Ladgen O Connor about a claimant's hire being reduced to that of an “equivalent” vehicle were obiter comments. He also stated that those comments did not amount to an expression of the view that the hire costs of an equivalent or like-for like vehicle would always, or even normally, be recoverable from the defendant. Instead, he was bound by Watson Norie v Shaw and the Court of Appeal decision in Lagden v O’ Connor. The claimant was only entitled to recover hire costs of a car to fulfil his reasonable transport needs, and no more than that. It was necessary to ask whether the claimant needed a like to like vehicle. Mr Chatterton had indicated that a standard vehicle such as a Volkswagen Passat estate would have sufficed as a replacement vehicle in his Part 18 responses. However, the claimant had signed a mitigation statement citing assorted reasons why he needed a like for like vehicle but had signed this without reading it.

The defendant insurer had therefore discharged the burden of proving that a lesser vehicle would have been sufficient. The defence representative had indicated that it was not clear if the claimant bore the burden of proving he required a like for like vehicle, or whether the defendant had the burden of proving that the claimant had acted unreasonably in mitigating their loss by hiring a like for like vehicle - the judge, however, proceeded on the basis that the burden was on the defendant to show that the claimant did not need to hire a vehicle on a “like for like” basis. The claimant had argued that “in practice” claimants do recover the costs of hiring like for like vehicles in such claims, but the judge stated that:

“...in the normal case it may well be that there is no evidence to support a contention by this defendant (the burden of proof being on the defendant) that the claimant had no need for a like for like vehicle. In my judgment, the question I need to ask myself is what evidence there is on the question of whether Mr Chatterton, in this case, needed a like for like vehicle for his damaged BMW X5.”

The court found that Mr Chatterton was not entitled to a like for like vehicle, but a Volkswagen Passat (a lesser vehicle) would have been sufficient. This was also of course a non-binding decision.

Analysis of the cases

It is often stated that there is a “conflict” in the above cases, with some cases suggesting that a claimant is entitled to a “like for like” vehicle and with other cases suggesting that a claimant is only entitled to a vehicle which fulfils his/her reasonable transport needs and no more.

It could be argued that the higher court cases of Watson Norie, Julian Dennard and the lower court case of Chatterton v Axa Corporate Solutions support the proposition that a claimant is entitled to a vehicle that fulfils his/her reasonable transport needs only, not a like for like vehicle. It is arguable that the higher court case of Lagden v O'Connor and lower court case of Charles Gow v NFU Mutual Insurance supports the proposition that a claimant is entitled to a “like for like” vehicle.

So, are these higher court and lower court cases in conflict? My view is that there is little conflict between these cases. One needs to look at the cases carefully to arrive at this conclusion.

In my view what is cumulatively clear in these cases is this: a claimant is entitled to a vehicle which fulfils her/his reasonable transport needs, and this may include the need for a “like for like” vehicle.

In Julian Dennard, the claimant hired a Vectra vehicle and had expressed his satisfaction with it. The costs of a sports car had not been incurred, though the claimant submitted that he was still entitled to the costs of a sports car, arguing it was not open for the defendant to question the way that he spent the damages. So, the Court of Appeal concluded that Mr Dennard could not recover hire charges for a sports car when those costs had not been incurred. The trial judge had stated that the claimant would have been entitled to a sports car but as he accepted a Vectra himself, he was only entitled to the costs of the type of vehicle he accepted. Accordingly, it is my view that in this case, a lesser vehicle (Vectra) fulfilled the claimants reasonable transport needs by his own admission as he accepted the vehicle and in fact this is the vehicle which he agreed to hire, and yet he was still claiming for the hire of a sports car! However, the Court of Appeal did state that “...if a need for a particular replacement car is established, then that cost of hiring that car is recoverable”, para 133 - so if the claimant had actually hired a sports car and asserted without contradiction that he required a sports car, then I suspect the result would be somewhat different.

The House of Lords comments in the case of Lagden v O'Connor about reducing the hire costs to an “equivalent” vehicle were clearly obiter. However, when they stated that the hire “must be reduced to the amount that would have been needed to hire the equivalent”, these comments have been interpreted by some to mean that a claimant is entitled to a “like for like” vehicle. However, in the case of Chatterton this interpretation was rejected by the Circuit Judge. Standing back from this all, in my view the House of Lords were clearly giving an example of what could happen in a case where the vehicle hired was a better one than the damaged vehicle, namely that a court could reduce it to the hire rate of a “like to like” vehicle.

In Charles Gow v NFU Mutual Insurance, Mr Gow was held to be justified in hiring a “supercar”, as he was someone for whom the “status” of having a vehicle was very important both socially and for business use. In my view it could be said that Mr Gow’s reasonable transport needs included having a vehicle of a similar status.

In Chatterton v Axa Corporate Solutions, the claimant had confirmed that a Vauxhall Passat would have sufficed in answer to Part 18 questions. So according to Mr Chatterton himself, a Vauxhall Passat would have met his reasonable transport needs. So, in this case it could be said that Mr Chatterton's reasonable transport needs did not include the need for a like-to-like vehicle, as these reasonable transport needs were met (in his own words) by a lesser vehicle.

In my view the answer to the question, is a claimant entitled to a like-for-like vehicle or just a vehicle which fulfils her/his reasonable transport needs is this: a claimant is entitled to a hire vehicle which fulfils his reasonable transport needs, which may include being entitled to a like for like vehicle.

There were discussions in the Chatterton case that “in practice” in a normal case claimants do recover the cost of hiring on a “like for like” basis. In Chatterton, the judge states this may reflect the position that in a “normal” case a defendant may not have evidence to support the contention that the claimant is not entitled to a “like for like” vehicle. The judge in Chatterton also assumes that the burden of proof is upon the defendant to show that the claimant is not entitled to a “like for like” vehicle. The claimant had clearly indicated that he was happy with a Volkswagen Passat in his Part 18 answers and therefore the defendant had satisfied the burden that Mr Chatterton was not entitled to a “like for like” vehicle.

Whilst the judge for the purposes of his judgement assumes that the burden is upon the defendant to show the claimant is not entitled to a “like for like” vehicle, I would like to venture further out on this issue. In my view the legal burden is always upon the claimant to prove all elements of her/his claim including the entitlement to a “like for like” vehicle. However, once a claimant provides some evidential basis that a “like for like” vehicle was required (for example the witness statement stating an equivalent family size vehicle was required or that s/he was used to driving a luxury sports car), this shifts the “evidential” burden to the defendant to show that the claimant did not require a “like to like” vehicle. Even though it's not analysed in this manner in Chatterton by the learned judge, the case can in my view be nicely dissected on the basis of the legal and evidential burden: in Chatterton the claimant had given evidence and signed the mitigation statement to the effect that he required a “like for like” vehicle – this may have then shifted the evidential burden to the defendant to show a like for like vehicle was not required, a burden which they were able to satisfy by demonstrating that the claimant had not read the mitigation statement and also had answered Part 18 questions that a Passat would have been sufficient. The legal burden is always on the claimant, but the evidential burden can constantly shift during a trial. The legal and evidential burden should never be confused, as I have seen commonly happen in trials.

The practical reality is this: in most cases from my experience the claimant will state in the witness statement that s/he required a “like for like” vehicle, for example, s/he required a similar size vehicle due to their family size, or for example s/he was used to a sports car and was therefore reasonably expecting a sports car. It’s not surprising that someone who has had their vehicle damaged will want something similar as a replacement. That’s surely reasonable. A witness statement is evidence, and this type of statement is likely to raise an evidential burden for the defendant to satisfy the court that the claimant was not entitled to a “like for like” vehicle.

The case of Watson Norie Limited is interesting. However, the Court of Appeal has limited notes as to how the trial judge arrived at his judgement, and the evidence is referred to as “very scanty”, p517. There was evidence that the claimant had not enquired about the price of hiring a vehicle or obtained a 20% discount off the hire which they were entitled to. The Court of Appeal however observes that the claimant “...did nothing to mitigate their damages but on the contrary they had recklessly and considerably aggravated their claim for damages.” p516. Lord Justice Sellers stated that the lower court decision was one “open” to the lower court to take and “More than one view may be taken on this”, p517. He also added that whilst the evidence does support the lower court finding, the case was found to be “unsatisfactory as a whole”, p517. It was not exactly a ringing endorsement of the lower court but reflects the oft position that higher courts will not readily interfere with lower court decisions: the higher courts may have taken a different decision, but that is not enough to find that the lower court's decision was “wrong”.

I also note with interest that in Watson Norie, the Court of Appeal stated that if the claimant had hired a Rover or Jaguar at a “more reasonable price”, the lower court judge may have found that the defendant could not have “complained”, p516. The claimant was not able to satisfy the lower court that they had needed a “like for like” vehicle on the particular circumstances of the case and the Court of Appeal was not prepared to interfere with this finding. This case does not mean in my view that a claimant in the right circumstances is not entitled to a “like for like vehicle.”

Is a claimant entitled to a like-for-like vehicle or just a vehicle which fulfils her/his reasonable transport needs?

There has been considerable analysis of case law in this article, which are in my view not necessarily in conflict.

My view of whether a claimant is entitled to a like-for-like vehicle or just one which fulfills his reasonable transport needs should be apparent from my analysis of the above cases.

For the ease of the reader, however I will neatly summarise what I consider to be the correct position:

(1) The claimant is entitled to a vehicle which fulfils her/his reasonable transport needs. A replacement hire vehicle satisfying his/her reasonable transport needs may include a claimant being entitled to a “like for like” vehicle;

(2) In practice, usually a claimant will understandably claim in his/her witness statement that s/he requires a “like for like” vehicle;

(3) In my view, a claimant has the legal burden of proof in proving that s/he required a “like for like” vehicle, with the standard of proof being on a balance of probability;

(4) From my experience, the threshold of satisfying a court that a particular claimant's reasonable transport needs mean s/he requires a “like for like” vehicle is not particulary high;

(5) Indeed, for example a claimant stating in his/her witness statement that s/he requires a “like for like” vehicle for various reason/s (for example her/his original vehicle was a large vehicle or that s/he was used to a luxury car), creates an evidential burden upon the defendant to discharge namely that the claimant was not entitled to a “like for like” vehicle. This explains why in many cases, the matters proceed at trial, as if the claimant is entitled to a like for like vehicle;

(6) In Chatterton, the defence were able to discharge the evidential burden that a “like for like” vehicle was not required, as the claimant in his/her Part 18 answers stated that a lesser vehicle was sufficient for him;

(7) In Gow, the claimant having given evidence that he required a “supercar “which was accepted by the court – therefore the defence were not able to discharge the evidential burden that the claimant did not require a “like for like” vehicle. The judge was persuaded that Mr Gow required a supercar for reasons of status;

(8) From my experience usually a claimant will be able to show that s/he was entitled to a “like for like” vehicle and this is part of his/her reasonable transport needs, though this is a fact specific exercise and depends on the factual matrix of the case.

It is hoped that this article clarifies this subject for the reader.

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 2024  07/11/2024