A key battleground in credit hire claims is the issue of impecuniosity, the resolution of which in a claimant’s favour will permit her to recover hire charges calculated at the contractual rate, rather than the more modest figures which might be anticipated for basic hire rates (BHR).
Impecuniosity does not fall to be judged in a vacuum: it always requires the comparison of tendered BHRs against a claimant’s financial resources: can a claimant reasonably then be expected to pay those BHRs out of her own resources, or would it in fact be an unreasonable demand on a claimant?
Sometimes the answer is blindingly obvious: the single parent living a precarious existence on benefits whose elderly unreliable car is destroyed by a tortfeasor, will rarely be pecunious.
But in other cases there can be finer lines to draw: in particular in one recent case, a claimant in settled secure employment, who had £38,000+ of readily available credit on a series of credit cards was still found to be impecunious by a district judge, who accepted the claimant’s evidence that the credit cards could not be used, without potentially hindering the claimant’s ability to apply for an obtain a mortgage by reason of the accrued debt.
On appeal to the circuit judge, the appeal failed. The reason that it failed was that provided a trial judge has correctly directed themselves on the law, then the court’s conclusion as to whether a claimant is pecunious or not is a question of fact.
Appeals on questions of fact are as easy to argue successfully, as it is to roll a boulder uphill.
The law on impecuniosity and the test the court must apply is still best drawn from the leading case of Lagden v O’Connor  UKHL 64.
As noted in that case at paragraph 9:
9. There remains the difficult point of what is meant by ‘impecunious’ in the context of the present type of case. Lack of financial means is, almost always, a question of priorities. In the present context what it signifies is inability to pay car hire charges without making sacrifices the plaintiff could not reasonably be expected to make. I am fully conscious of the open-ended nature of this test. But fears that this will lead to increased litigation in small claims courts seem to me exaggerated. It is in the interests of all concerned to avoid litigation with its attendant costs and delay. Motor insurers and credit hire companies should be able to agree on standard enquiries, or some other means, which in practice can most readily give effect to this test of impecuniosity. I would dismiss this appeal.
And at paragraph 34:
34. Of course, the facts in these two cases were quite different from those in this case. But I think that the principles on which they were decided are of general application, and it is possible to extract this guidance from them. It is for the defendant who seeks a deduction from expenditure in mitigation on the ground of betterment to make out his case for doing so. It is not enough that an element of betterment can be identified. It has to be shown that the claimant had a choice, and that he would have been able to mitigate his loss at less cost. The wrongdoer is not entitled to demand of the injured party that he incur a loss, bear a burden or make unreasonable sacrifices in the mitigation of his damages. He is entitled to demand that, where there are choices to be made, the least expensive route which will achieve mitigation must be selected. So if the evidence shows that the claimant had a choice, and that the route to mitigation which he chose was more costly than an alternative that was open to him, then a case will have been made out for a deduction. But if it shows that the claimant had no other choice available to him, the betterment must be seen as incidental to the step which he was entitled to take in the mitigation of his loss and there will be no ground for it to be deducted.
On the procedural aspects of impecuniosity, it is noted that the case of Diriye v Bojaj and Quick-Sure Insurance Ltd  EWCA Civ 1400 was concerned with the service provisions of the Civil Procedure Rules and the question of compliance with an Unless Order. It is not authority for a general proposition that any particular kind of evidence is required to establish impecuniosity or to displace the civil burden of proof, nor does it purport to alter the basis upon which a trial judge’s evaluative judgment on a secondary finding of fact can be interfered with by an appellate court.
There have been several decisions in recent years upon the correct approach of an appellate court to hearing appeals on questions of fact including Fage UK Ltd v Chobani UK Ltd  EWCA Civ 5, McGraddie v McGraddie  UKSC 58 and Perry v Raleys Solicitors  UKSC 5.
In the most recent substantive decision of the Court of Appeal, that of Staechelin v ACLBDD Holdings Limited  EWCA Civ 817 Lewison LJ summarised the principles established in earlier caselaw as follows:
29. If I may repeat something I have said before ( FSR 29 at ):
“Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them. …The reasons for this approach are many. They include
i. The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed.
ii. The trial is not a dress rehearsal. It is the first and last night of the show.
iii. Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case.
iv. In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.
v. The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).
Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.”
30. Thus, it is a long settled principle, stated and restated in domestic and wider common law jurisprudence, that an appellate court should not interfere with the trial judge’s conclusions on primary facts unless it is satisfied that he was plainly wrong: McGraddie v McGraddie  UKSC 58,  1 WLR 2477. What does “plainly wrong” mean? The Supreme Court explained in Henderson v Foxworth Investments Ltd  UKSC 41,  1 WLR 2600 at :
“Given that the Extra Division correctly identified that an appellate court can interfere where it is satisfied that the trial judge has gone “plainly wrong,” and considered that that criterion was met in the present case, there may be some value in considering the meaning of that phrase. There is a risk that it may be misunderstood. The adverb “plainly” does not refer to the degree of confidence felt by the appellate court that it would not have reached the same conclusion as the trial judge. It does not matter, with whatever degree of certainty, that the appellate court considers that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached.”
31. The mere fact that a trial judge has not expressly mentioned some piece of evidence does not lead to the conclusion that he overlooked it. That point, too, was made in Henderson at :
“An appellate court is bound, unless there is compelling reason to the contrary, to assume that the trial judge has taken the whole of the evidence into his consideration.”
32. At  Lord Reed added:
“I would add that, in any event, the validity of the findings of fact made by a trial judge is not aptly tested by considering whether the judgment presents a balanced account of the evidence. The trial judge must of course consider all the material evidence (although, as I have explained, it need not all be discussed in his judgment). The weight which he gives to it is however pre-eminently a matter for him, subject only to the requirement, as I shall shortly explain, that his findings be such as might reasonably be made. An appellate court could therefore set aside a judgment on the basis that the judge failed to give the evidence a balanced consideration only if the judge’s conclusion was rationally insupportable.”
33. More recently, in Perry v Raleys Solicitors  UKSC 5,  2 WLR 636 the Supreme Court summarised the constraints on interfering with findings of fact at :
“They may be summarised as requiring a conclusion either that there was no evidence to support a challenged finding of fact, or that the trial judge’s finding was one that no reasonable judge could have reached.”
It follows that it is only where there is no evidence at all, to support the conclusion of impecuniosity, or the trial judge’s finding can be characterised as irrational or perverse: synonymous phrases for a decision that no reasonable judge could have reached, will a judge’s finding of impecuniosity at first instance be set aside.
Thus in the case that I discussed above, once the trial judge had found that the claimant had given genuine, truthful evidence about why he could not practically use his credit cards, without suffering a burden or making a sacrifice, this finding could not realistically be overturned on appeal.