The BHR and “alternative credit hire rates” evidence

There is a lucrative cottage industry in the generation and submission of BHR evidence for use in credit hire claims.

But sometimes a rates witness will struggle to find BHRs for alternative vehicles. This can be for a number of reasons, including the vehicle that was damaged or destroyed being a plated taxi or private hire vehicle, or perhaps the claimant is a young driver, or one with points on his licence to whom a car hire company might be reluctant to hire a vehicle to.

In such circumstances, rates witnesses will often resort to “alternative credit hire rates” to argue that these (where lower) should be applied as a fallback or alternative scenario. Such an approach might be thought to be wrong by reason of a number of points.

The evidential point is to question where such rates come from. Some credit hire companies will publish their rates, many do not. And if rates are “harvested” from claims made in other cases, there can be a real issue as to whether the implied undertaking that documents provided in one case, cannot be used in another absent being referred to in court, or a court giving permission may have been breached.

The legal point runs as follows. The starting point is that a claimant mitigates his claim for general damages for loss of use, by hiring a replacement car, with the effect that his claim for general damages is quantified and advanced by reference to the hire charges. See Pattni v First Leicester Buses and another appeal [2011] EWCA Civ 1384.

The purpose of using comparator rates, is not to suggest that a claimant should have hired that particular car, or incurred that particular cost, but rather to strip out elements of the credit hire charges that are irrecoverable as a matter of law. The decision of the Court of Appeal in Stevens v Equity Syndicate Management [2015] EWCA Civ 93 that it was appropriate to use the lowest reasonable comparator rate for the “stripping out” exercise.

See the origins of the approach in principle, in  Dimond v Lovell [2001] 1 AC 384 at 263E–G and in the speech of Lord Hoffmann, with whom Lord Browne-Wilkinson agreed; and at 268C–269C in the speech of Lord Hobhouse, who also agreed with Lord Hoffmann.

Where there are no BHRs adduced by a defendant, there is no stripping out exercise for the judge to undertake. What Stevens is not authority for is, the notion that by analogy  the lowest alternative credit hire comparator rate should be used on the basis that the claimant should have hired this vehicle, because it is not concerned to suggest alternatives that the claimant could and should have hired.

Instead, the sole question is whether the claimant has acted reasonably in hiring the car that he did hire on credit hire terms. See the speech of Lord Macmillan in Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452:

“Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in the difficult by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken”.

Assuming a claimant has hired a car on credit, at a price which is neither the cheapest nor the most expensive of the alternatives, it will almost inevitably fall within a range of reasonable rates and the claim should be allowed at the contractual rate.

2 comments

  1. What if C is impecunious, but C has patently failed to mitigate in terms of vehicle hired, would evidence of credit hire rates for the appropriate vehicle fly and if a range of rates for that were before the court, ought the learned DJ apply the lowest

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