The Implications of Mr Mazahar Hussain v Eui Ltd (“Hussain 2") (2024 EWCC 16, 2024 WL)

The case of Mr Mazahar Hussain v Eui Ltd has drawn considerable attention by both sides in the ongoing “war” in credit hire, namely claimant solicitors/hire companies and defendant solicitors/insurance companies. This was a county court decision by a Circuit Judge in November 2024.

Some on the defence publicly hail the decision in Mr Mazahar Hussain v Eui Ltd ([2024] EWCC 16, 2024 WL) as a “landmark” decision, while many on the claimant “side” worry about this case. Some refer to Mazahar Hussain v Eui as “Hussain 2" - this also shows that some take the view that it's such a profound decision that it needs to be hyphenated with the High Court decision of Humayum v Hussain. So, it's a case that needs some analysis as to its implications.

The county court case of Mr Mazahar Hussain v Eui Ltd is not to be confused with the binding High Court decision of Humayum Hussain v Eui Limited ([2019] 10 WLUK 152). There is a recipe for confusion here, as the claimant surname and the defendant party are the same in the two decisions! On the earlier High Court case of Humayum Hussain v Eui Limited, I have previously written an article entitled “The Implications of Hussain v Eui”. The reader is referred to that article which should be read in conjunction with this one.

What is clear to me is that this case of Mr Mazahar Hussain v Eui Ltd requires clarification. This article will be divided as follows:

• Summary of the case of the county court case of Mazahar Hussain v Eui Ltd.
• Relevant points arising from the case.
• Impact of the decision on credit hire.

Summary of the case of Mazahar Hussain v Eui Ltd [2019] 10 WLUK 152

This case involved a “taxi credit hire” case. There were considerable hire charges claimed for over £30,000. The claimant was suggesting that he fell under the two exceptions referred to in the High Court case of Humayum Hussain v Eui Limited, namely he required his vehicle for social and domestic use and secondly the business had to provide a service at a loss in order to retain important customers or contracts. For the ease of the reader, I referred to these two exceptions respectively as “social and domestic use” and “greater loss” exceptions in my previous article “The Implications of Hussain v Eui”. In Mazahar Hussain v Eui Ltd, the impecuniosity argument was not advanced, as the pecuniosity of the Claimant was conceded.

The court found that the “social and domestic” use exception was satisfied, to the extent that the taxi driver was entitled to the rates a private motorist would have obtained. The judge suggested that (paragraph 25) “In the present case it was not seriously contended on behalf of the Defendant that the Claimant did not have a personal need for the vehicle in which he had an accident.” So, the court found that the exception of social and domestic use was satisfied. The judge further stated (paragraph 25): “...the relevant hire rate must be the applicable "spot" rate. Whilst both parties produced rates evidence neither chose to address me on the applicable rate on the basis that this should be capable of agreement once I had made my decision on the points raised under Hussain.”

The judge however found that the Claimant could not satisfy the “greater loss” exception. Accordingly, the judge made a number of comments, which I refer to.

• The judge stated (paragraph 6): “Neither was it in dispute that, as a professional driver, the Claimant's claim for damages will be limited to his loss of profit and it is only exceptionally that he will be able to argue that he hired, in mitigation of his loss, a replacement vehicle at a greater cost compared to his loss of profit.”
  
  
• The judge referred to two stages, namely (paragraph 12): “The first, and easiest to work out, is the profitability of his or her trade. The next is the likelihood that his business (of being a self employed private hire taxi driver) will be permanently impaired. This involves not only a consideration of whether or not he may be "dropped" by one "base", but also whether or not he is able to move to another "base" or take advantage of an online platform such as Uber."
  
  
• It was further stated that (paragraph 13): “Another, and perhaps better, way of looking at the same thing is to ask how long is it reasonable for a business to continue to operate at a loss (by for example hiring a vehicle) in order to ensure that future business is not permanently impaired? The answer to the question will depend on (a) how profitable the business is, (b) the size of the loss, and of course (c) the likelihood that the business would be permanently impaired absent the mitigation. Clearly, the less profitable the business and/or the greater the loss (i.e. greater the cost of hire) the less likely it is to be a reasonable course of action. Likewise, if there is little likelihood that the business will be permanently impaired then the less reasonable it will be to spend significant sums in mitigation.”
  
  
• The judge further commented (paragraphs 16 and 17): “In this case the Claimant provides absolutely no financial information or evidence of his profit (or hypothetical loss of profit in the event his trade was compromised) or even hint at having given this any thought before opting to hire a vehicle which would cost him £203.46 per day. Accordingly, he cannot hope to persuade a court that the first exception in Hussain applies to him. Even if I am wrong about the above and the Claimant need not evidence his profitability as a self-employed driver, the evidence that he does provide, which appears to be aimed at demonstrating that his future trading would be compromised, is woefully inadequate. All that the Claimant is able to muster by way of evidence is a letter from "Barkerend Taxis" addressed to him in which it is said”.

Relevant points arising from the case

This is a non-binding decision, so I prefer to refer to the relevant points in this judgement, as opposed to relevant principles in this decision. Credit hire is full of cases where parties can become “lost” in relying too heavily on lower court decisions.

The relevant points in relation to the “greater loss exception” are as follows: 

• In relation to profitability, there was “absolutely” no evidence of financial information or profit provided in the specific case the court was dealing with.
  
  
• The judge stated that even if he did not need to look at the financial accounts, then the letter by “Barkerend Taxis", which had purported to show a permanent cessation of the Claimants relationship with the taxi base, was considered to be insufficient for a variety of reasons. This was a factual decision by the court, which for the purposes of this article I do not propose to go into.
  
  
• The judge took the view that firstly one has to look at the profitability of the business. The less profitable the business or the higher the hire charges, then it is less likely to be a reasonable course of action to hire a vehicle. If there is little likelihood that the business is likely to be permanently impaired, then its less reasonable for significant amounts to be spent on hire charges.
  
  
• Secondly one must look at whether the business will be permanently “impaired” and this involves a consideration whether a taxi driver would be “dropped” by the base. Indeed, the Claimant was alleging that he would be dropped from the base, something which the judge rejected as being unlikely. Further another consideration is whether another base will take the taxi driver on, or whether there was an online alternative such as “Uber”.
  
  
• The judge referred to the claimant being only “exceptionally” able to prove that he will be able to argue that he hired, in mitigation of his loss, a replacement vehicle at a greater cost compared to his loss of profit.

Impact of the decision on credit hire cases

There are a number of factors to take into account here.

It must be understood that this was a lower court decision which was not a binding decision. From my own experience, some judges may take account of the decision, but other judges may not take the decision into consideration. A District Judge or Deputy District Judge may possibly be more likely to take the decision into account. A Circuit Judge may be less likely to take the decision into account. However, it ultimately boils down to the judge (does s/he tend to sympathise with claimants or defendants on credit hire?) and may also depend on how much experience the particular judge has of credit hire matters.

If a judge finds the case useful, the relevant points in this case are:

(a) the court needs to look at the profitability of the taxi driver's business

and

(b) whether the business is likely to be permanently “impaired”.

Dealing with both points is rather interesting. I have experience of a high value credit hire trial before a very experienced Circuit judge in which this particular “greater loss” exception was dealt with. The client was a self-employed taxi driver. The client was debarred from asserting impecuniosity as he had not provided the full financial documents – so there was no dispute about the fact that he was not impecunious. At trial, I sought to rely upon the “greater loss” exception. The judge was persuaded that this exception was satisfied. In one single four-line paragraph of the witness statement, the client stated that he feared that he would lose some of his “school run” contracts, even though he had other customers. He maintained his version in cross-examination. The “school run” contracts were an important business for the client, but there was no suggestion of any permanent impairment of the business. This evidence was sufficient to persuade the judge that the case fell under the “greater loss” exception. It was a case which was not dependant on strict disclosure of profitability, nor did it require the judge to be persuaded that the client could be “dropped” from his base or even that most of his work would be jeopardised. The fact that the client could lose his school contract, which was an important part of his work, was sufficient for this judge.

In fact, you could say that the judge in my case reached the opposite conclusion to the judge in the county court case of Mazahar Hussain v Eui in that: (a) the judge did not require the financial information to be persuaded that the “greater loss” exception was satisfied and (b) she did not require that the business was likely to be “permanently impaired”, only that an important part of his work was affected was sufficient.

This decision was reached before the county court decision of Mr Mazahar Hussain v Eui. If the Circuit Judge in my case had decided the case after the county court decision of Hussain v Eui, would she have decided the case any differently? I very much doubt it.

In the county court decision of Mazahar Hussain v Eui, it was stated that (paragraphs 15 and 16) “The profitability and likelihood of a permanent impairment of the business are key to making such an assessment and, accordingly, a claimant should come to court fully prepared to evidence these matters. In this case the Claimant provided absolutely no financial information...”. I have some sympathy for these comments. After all in my article on the “Implications of Hussain v Eui” (in which I analysed the binding High Court case of Humayum Hussain v Eui Ltd), I did state that the “greater loss” exception will clearly require “cogent evidence in the form of financial documents and also a detailed witness statement explaining how a short-term loss is incurred in order to avoid a greater future loss.” But in the “school run taxi” case I dealt with, such financial documents were not required, indeed the claimant was debarred from relying upon impecuniosity due to the full financial documents not being provided. So, there are two Circuit Judges with a complete opposite understanding about what is required to prove this particular exception. It just goes to show how unsafe it can be to rely upon non-binding decisions! It also underlines the unpredictability of the courts when dealing with credit hire.

In the county court decision of Mazahar Hussain v EUI, the words “permanently impaired” are used. In the binding High Court decision of Humayum Hussain v EUI, the High Court stated this: “First, any business must sometimes provide a service at a loss in order to retain important customers or contracts. For example, a chauffeur might not want to let down a regular client for fear of losing her. Equally, a self-employed taxi driver might risk being dropped by the taxi company that provides him with most of his work. Properly analysed, these are not, however, exceptions to the general rule since in such cases the claimant is really saying that, but for his or her actions in hiring a replacement vehicle, the true loss of profit would not have been limited simply to the pro rata loss calculated on the basis of the period of closure but that future trading would itself have been compromised.”

The High Court uses the word “compromised” in relation to future trading, which is not as severe as the words that something is being “impaired”, in my view. Further the word “permanently” in the county court case of Mazahar Hussain v EUI is added to “impaired”, which can be considered to be more serious than trading being just “compromised”. This may be considered a matter of semantics in the abstract or just theory, but when one looks carefully at the county court decision of Mazahar Hussain v EUI it clearly makes all the difference on potential outcomes. In law, words greatly matter. The county court in Mazahar Hussain v EUI gives an example of a taxi driver being “dropped” from his taxi base and also consideration of whether there was work available via online such as Uber – these seemed to be very general comments the judge made, not just confined to the specific case he was dealing with. This is clearly contemplating a permanent loss of work as a taxi driver. In my view, it is far from clear that the High Court in Humayum Hussain v EUI was taking the test as high as that. Whilst the High Court in Humayum Hussain v EUI gives the example of a taxi driver being “dropped” by a taxi base that provides most of the claimant's work, they also give an example of a chauffeur losing regular clients – these appear to be merely examples given by the High Court, not an exhaustive list, indeed the sentence by the High Court includes the words “For example...”.

This is where the difference of stating that something is “exceptional” and something needs to be brought under a specific “exception” becomes stark, in my view. In my analysis of the same judge's earlier case in Mehmood v AIG Europe Ltd in the article “Does Mehmood v AIG Europe Ltd and Simpson [2023] EW Misc 1 (CC) make any difference to taxi credit hire claims?”, I stated this:

“It is a non-binding decision, and it seems to me that a “double test” of reasonableness is being suggested which could be said to be introducing exceptionality into the test, which in my view was never the intention in Hussain v Eui (though as I state, clarification from the higher courts would be welcome and helpful). There is a clear difference between establishing a case falls within an “exception” and a test of “exceptionality”. Exceptions and exceptionality must not be confused. This is particularly so when the “exceptions” are potentially so wide.”

In fact, in the judgement of Mahmood v AIG Europe Ltd, the same judge did not use the words “exceptionally” anywhere, but I pointed out in my article “Does Mehmood v AIG Europe Ltd and Simpson [2023] EW Misc 1 (CC) make any difference to taxi credit hire claims?” that by saying that even if the three exceptions in the High Court case of Hussain v Eui were satisfied, the claimant still had to show “overall” that s/he acted reasonably, it effectively amounted to a test of “exceptionality”. If there was any doubt about my analysis on this, then the same judge has now specifically confirmed in Mazahar Hussain v EUI my understanding of his first decision, whereby he states: “Neither was it in dispute that, as a professional driver, the Claimant's claim for damages will be limited to his loss of profit and it is only exceptionally that he will be able to argue that he hired, in mitigation of his loss, a replacement vehicle at a greater cost compared to his loss of profit. Whether or not he is able to make out an exception ultimately depends upon whether or not he acted reasonably in mitigating his loss.” - underline is my emphasis.

In my view until a higher court confirms this, namely that the test is one of “exceptionality”, the test is not whether the claimant can “exceptionally” show something, instead the test is whether something can be brought within the defined exceptions. In my view the two are not the same thing. When you consider how wide the three exceptions are, particularly the “social and domestic” exception and the “impecuniosity” exception, it shows how describing these as “exceptional” are essentially a misnomer.

In my view the county court decision of Mazahar Hussain v EUI is far from a “landmark” decision. Ironically because it has almost the same name as the High Court decision of Humayum Hussain v EUI, this may have led to a misconception (caused unconsciously) that it was somehow a continuation of the High Court decision of Humayum Hussain v Eui and perhaps has a similar status to it. Of course, I do however accept that certain county judges may find the decision of Mazahar Hussain v EUI helpful to them – I had one judge for example who referred to the decision for “reasoning”. But I would not describe the decision as a landmark decision. Indeed, in my view, what is required is higher court guidance to clarify the remits of the “greater loss” exception.

Conclusion

Several points of interest emerge from this case, amongst them:

• The understanding of the county court judge in Mazahar Hussain v EUI appears to be that the “greater loss” exception requires that the taxi driver is likely to be dropped from the base or something similar in terms of not allowing the taxi driver to trade long term.
  
  
• In my view, the High Court decision of Humayum Hussain v EUI did not go that far. The difference between trading being “compromised” (the High Courts language) and “permanently impaired” (county courts judges' language) is substantial, in my view. However higher court guidance would be most welcome, to clarify this. 

• The county court in Mazahar Hussain v EUI refers to a taxi driver being potentially “dropped” from his base, whereas the High Court also gives an additional example about a Chauffeur losing “regular clients”. It is arguable that being dropped from a taxi base may be considered more serious than losing “regular clients”. This may reflect the difference between trading being “permanently impaired” rather than simply just being “compromised” Words matter and have consequences in law. 
  
  
• The Circuit Judge in the county court decision of Mazahar Hussain v EUI seems to build on from his decision in Mehmood v AIG Europe Ltd which seems to incorporate that the case must be an “exceptional” one for more than loss of profit to be awarded.
  
  
• In the High Court case of Humayum Hussain v Eui, there were three exceptions referred to. In my view this is not the same as saying a case has to be “exceptional”. Indeed, in none of the cases I have been involved in, has the judge stated that the case needs to be “exceptional”; it's just been a question of whether a case can fall within one of the exceptions referred to within the High Court case of Humayum Hussain v Eui. 

• In one of my high value credit hire trials, the Circuit Judge took the view that a taxi driver losing important school contracts was enough for the “greater” loss exceptions to be satisfied. Presumably the judge felt this was enough to show that future trading would be “compromised”. There was not full financial disclosure in that case, nor was there any suggestion that the clients trade would be permanently impaired as such. 

• Overall, I would state that this county court case of Mazahar Hussain v Eui is not a “landmark” case, though I accept that some county court judges may be assisted by the “reasoning” in the case and will seek to rely upon it. In one of the cases I was involved in, the county court judge did use the “reasoning” of Mazahar Hussain v Eui. 
  
  
• It is perfectly understandable that the defence is seeking to place reliance upon Mazahar Hussain v EUI. However, on the other hand, it is in my view very arguable that this case is not as impactful as the defence argue for the reasons put forward in this article.
  
  
• Credit hire has after all been referred to a “war” for a generation now...This “war” shows no real signs of abating.

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

© Mohammed Azeem Ali 2025                                                         25^th of June 2025