Bent v Highways and Utilities Construction Ltd and another [2010] EWCA Civ 292 concerns the liability of an insurance company to cover the cost of a temporary replacement car. The key issue arising in the Court of Appeal surrounded the type of evidence the court would take into consideration when making such a determination, and how this evidence could be applied.

Facts

In February 2007, Darren Bent (a footballer) was involved in a road traffic accident. The other party accepted liability for the crash and thus responsibility for the damage caused to Mr Bent’s Mercedes V12, which was valued at around £72,000 and which due to the accident had to undergo extensive repairs.

Consequently, Mr Bent hired an alternative car for this period. This lasted 94 days, a substantial length of time; however, the insurance company could not claim that this was unreasonable because this longer time scale was caused by a delay in the other driver accepting liability.

The insurance company (the second defendant in the case, the first being the driver themselves), was therefore issued with Mr Bent’s hire car bill. The scale of this resulted in them disputing the extent of their liability for the costs. Mr Bent had hired an Aston Martin DB9 (worth about £105,000) on a credit hire agreement with a company called ‘Accident Exchange Ltd’. The end cost of this was £63,406.90 – almost the value of the Mercedes originally involved in the accident. The defendant argued that they should not be liable for this level of cost. This led Mr Bent to issue legal proceedings.

At First Instance

Whilst Mr Bent already owned a second car, a left-hand drive Cadillac, the judge in the first instance  (Judge Yelton) accepted his reasoning for not wanting to use this car whilst the Mercedes was being repaired, and this point did not feature in the Court of Appeal.

The insurance company gave two reasons for why they should not be liable for the cost of the hire car. Firstly, the value of the Aston Martin was considerably higher than that of the Mercedes insured, making it likely to also be more expensive to hire. Secondly, Mr Bent bore a duty to mitigate his losses in hiring the loan car. The concept of this duty is central to this case, and essentially means that Mr Bent had a duty to avoid, or minimise, all unreasonable costs contributing to his losses. Any costs which could have been avoided through taking reasonable steps would not be chargeable to the defendant. The defendants argued that this duty should have led him to hire a car in the “spot” market rather than through taking out a credit hire agreement (which tends to be more expensive, as you pay for the luxury of not having to pay upfront).

Judge Yelton rejected both of these arguments, seemingly sympathising with Mr Bent. He especially emphasised that Mr Bent hired the Aston Martin on the understanding that the insurance company would subsequently pay for it – if he had known that they may not, he may have looked elsewhere to the “spot” market and negotiated a better rate of hire. Whilst this point seems to run contrary to Mr Bent’s duty to mitigate his losses, Judge Yelton frames this point through the lens of the specialist market for high-end cars. The specialism of the market means that a considerable degree of discretion is available in the process of hiring such vehicles, rendering Mr Bent’s reliance on which party would pay the hire cost understandable.

Importantly, the defendant had submitted various pieces of information to the court regarding the “spot” market costs of hire for various vehicles closer in price range to the Mercedes. Since these figures were dated later (in 2008), a table of inflation figures was also supplied to allow the court to assess the “spot” market costs of hiring such a vehicle in 2007. Judge Yelton stated that this evidence was not accurate enough. Since it concerned neither the exact time nor car involved in the case, it could not be used to determine the requisite figure. Without this, the original hire bill would stand, and the defendant would be liable to pay for it. The insurance company then appealed to the Court of Appeal.

The Court of Appeal

The case authority followed states that, for pecunious claimants (i.e. claimants with money), damages should be assessed on the cost of hiring a “broadly similar” car through the “spot” market. As it was not known at the start of the hire that it would be for 94 days, this assessment should be used regardless of the fact that the longer hire period may have made “spot” hiring more expensive (as it is designed for, and is therefore cheaper when, cars are hired for shorter times).

It was held that Judge Yelton had erred in not accepting the evidence supplied by the defendants. Whilst it had not been proved exactly what the charges would have been in the “spot” market if Mr Bent had hired a closer equivalent of the Mercedes at the time he hired the Aston Martin, enough information had been presented to the court to allow the judge to make an informed assessment of the rough figure. It is highly normal for a judge to have to take such information and adjust figures before making their valuation. Equally, the court should not overly-focus on needing figures for an exactly comparable car. Figures showing the cost of hiring a range of “broadly similar” cars will be enough to indicate the average cost of hiring an appropriate temporary vehicle, and thus the amount the insurance company should be liable to pay.

Therefore, the refusal of Judge Yelton to consider or apply the evidence which the defendants provided showing approximate costs meant that the case should be remitted for retrial. Lord Justice Jacob of the Court of Appeal further added that this retrial should hear evidence concerning the “spot” rates of “broadly similar” cars from both sides. This would allow the claimant to demonstrate the reasonableness of the £63,000 bill originally charged to the defendants, if they could.

Conclusion

The main take-home point of this case is the duty of the court to be flexible in their approach to assessing reasonable hire charge costs following a road traffic accident. In many cases – not just insurance claims – it will be impossible to find the requisite figures showing the amount expected to be paid, as such a figure could only be found in the past. Therefore, the courts must be open to applying numerous pieces of information in their calculations, so that an average appropriate figure can be deduced and compared to the figure in question. Whilst this is not an exact science, it is typically the best that can be done in the circumstances. Equally, it is unlikely that such companies would wish to undertake the costs of going to court unless the figure attempted to be charged to them was wholly unreasonable.

The unique circumstances of this case – specifically the fact that Mr Bent had another car and could have afforded the cost of hiring an alternative vehicle himself – may make this case appear unfair on the insurance company (and moreover unfair on the other customers of this company, who could have their premiums increased to cover charges like Mr Bent’s). The ruling from the Court of Appeal is therefore a crucial re-statement of the importance of a claimant’s duty to mitigate their losses, and how it applies to all – even in the market for high-end cars. Of course, there may be situations when more exact valuations will be required by the court, but this will only be the case where such figures can be accurately gauged. When they cannot be, it is the role of the courts to balance the various pieces of information given to them, before deciding on an appropriate average figure. If a claimant has radically deviated from this figure, and has thus neglected their duty to mitigate their losses, they may find themselves liable for these additional costs.