I'm interested in…

  • Strategy & Procedure
  • Motor
  • Fraud
  • Disease
  • Catastrophic Injury
  • Commercial Insurance
  • Costs
  • Liability
  • Local Authority
  • Professional Indemnity
  • Scotland

Hire claim struck out due to claimant's failure to mitigate losses and claimant ordered to pay the Defendant's costs

Braibente v QBE Insurance
Before: District Judge Parker
At the County Court at Wandsworth
13 June 2017

A Claimant who had turned down an offer to pay repair costs, had his claim for hire in the sum of nearly £30,000 dismissed as he had failed to mitigate his losses and whilst the Claimant successfully recovered the cost of damage to his vehicle, the Judge ordered the Claimant to meet the Defendant's costs of the action.

Stuart Clemson, who acted for the Defendant's insurers takes a brief look at this case and how proactively offering to pay for the costs of repairs led to the court ordering the Claimant to pay the Defendant's costs of the action.

Background

The claims arose out of a road traffic accident on 29 May 2015 when the Claimant’s parked motorcycle was knocked over and damaged by the Defendant’s insured driver. Liability was not in dispute. Six weeks after the accident, the Claimant took his bike to a specialist bike repair shop and a repair work estimate was obtained. Based on that estimate, the defendant insured transferred funds to the repair shop in the sum of £1055.49 to undertake the repair work.

Following an exchange of correspondence, the claimant requested that the money actually be paid directly to him. The insured retrieved the money that had been paid to the garage and then subsequently went back to the Claimant to ask if he still wanted the money to be transferred to him, he then declined stating that he had been messed around too much and was now going through his insurance.

Three months after the incident, the claimant hired the first of three different replacement motorcycles from McAms Hire. The total period of hire spanned 218 days, with the hire charges amounting to £29,795.04. The Claimant had not claimed on his own insurance policy and recovery of the hire charges was pursued by Armstrongs Solicitors.

Outcome

Having heard the evidence, on the 13th of June 2017 District Judge Parker, sitting in the County Court at Wandsworth, dismissed the hire claim in its entirety on the basis that the claimant had failed to take reasonable steps to mitigate his loss. The Judge accepted the Defendant's argument that when the Claimant had been provided with funds by the Defendant's insured he  used them to effect repairs to his bike (the Defendant having issued an interim payment based on the original repair estimate of £1,055.49).

Thereafter, the Claimant could and should have accepted the offer to pay this sum directly to him by the Defendant's Insured and if he had have done, he would never have needed to enter into the hire agreement with McAms. By doing so, he had not mitigated his loss. The further claims for storage and miscellaneous expenses were also dismissed on the basis of the Claimant failing to evidence them sufficiently. The original storage invoice had been produced by the hire company (not the actual garage) and had incorrect dates for the storage. Subsequent attempts to correct this also did not ring true. The Defendant also successfully argued that the Claimant had ample place to store the bike at his home address securely (obtaining images using the internet and photograph posted to social media, which the Claimant had taken of one of the hire bikes in his property).

There had remained between the parties a dispute as to the extent of the damage sustained to the motorcycle. In addition to the estimate of repair work obtained six weeks after the incident, the hire company instructed their own engineer to inspect the bike and the engineer indicated that the motorcycle was beyond economic repair following an inspection on 3 September 2015. The claimant succeeded on his claim for the pre-accident value, with judgment obtained in the amount claimed in the sum of £2,350 (the Defendant being given credit though for the interim payment having been made based on the original repair estimate of £1,055.49).

Having handed down judgment, District Judge Parker considered that it was appropriate, applying her discretion under CPR 44.2 (the Court's general discretion as to costs) and the Court of Appeal’s judgment in Summit Property Limited v Pitmans (A Firm) [2001] EWCA Civ 2020 (paragraph 17 per Longmore LJ), to make an issue based costs order. The claimant was ordered to pay the defendant’s costs of the action in the sum of £10,241.65, while the defendant was ordered to pay 10% of the claimant’s costs in the sum of £1,400. Costs were subject to summary assessment.

Prior to the handing down of the Judgment Armstrongs Solicitors had attempted to agree the costs order on the basis of the Defendant paying 40% of the Claimant Costs (with no order in respect of the Defendant's costs). This was rejected.

The Defendant's view was that the Claimant had only been successful in relation to a small proportion of his claim, comprising a straightforward head of loss that did not involve a great deal of work and where the issues being argued only represented a small part of the claim. The Claimant had failed ultimately in respect of most of his claim and the Defendant had been successful in their argument that the hire was unnecessary.

Matthew Waszak of Temple Garden Chambers was counsel for the Defendant.

Comment

This is a good example of an insured benefiting from being proactive and offering to meet the cost of repairs early on (despite the fact that an interim payment was only eventually paid by the Insurers in April 2016). The penalty to the Claimant for failing to accept that offer was that he is to pay the Defendant's costs.

It is rare for a court to make an order in the terms that the District Judge did, especially as the Claimant recovered something. It is more common for a court to restrict the Defendant's liability to pay the Claimant's costs, rather than order the Claimant to meet the Defendant's costs.

Contact

For more information please contact Stuart Clemson, Associate

By Stuart Clemson

Share your views

Please complete your details below to share your views. All comments are moderated and only your name and comment will be visible.

Your Comment

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Top