Sayce something new about credit hire

27 Jan 2012

The original decision in Sayce v TNT 2011 was a welcome decision for insurers as it showed how the Courts were taking a tough approach on Claimants who unreasonably refuse a Defendant's offer of hire following an accident. However, last month the Court of Appeal reversed this decision.

The Claimant's car had been damaged in a road traffic accident caused by the Defendant. The Defendant had offered a replacement car at no cost to the Claimant. However, the Claimant rejected this offer and hired a car herself. The original trial judge held that the Claimant had failed to act reasonably in failing to mitigate her losses and she was therefore not allowed to recover the cost incurred in hiring a vehicle.

The Claimant in Sayce appealed on the basis that the judge had erred in his decision as he had decided the case on a basis inconsistent with the way in which it had been argued and had failed to apply the decision reached in Copley.

The Court of Appeal found that the judge had not disguised his doubts as to the correctness of the decision in Copley. They found that the judge was entitled to voice his reasoned criticisms of the decision but, having done so, it was his duty to accept and apply the law as laid down in Copley. The Claimant was therefore entitled to recover hire car charges.

The Court of Appeal noted that this decision highlighted some "important questions on the current state of the law on mitigation which had implications beyond the confines of road traffic accident cases which might have justified granting permission to appeal to the Supreme Court".

In the light of the comments made above by the Court of Appeal it seems likely that we will see further decisions dealing with these issues in due course, and perhaps a Supreme Court decision at some point would be helpful for the insurance industry.