BEECHWOOD BIRMINGHAM LTD V HOYER GROUP UK LTD

[2010] EWCA Civ 647, Court of Appeal, Sir Mark Potter President of the Family Division, Lord Justice Dyson and Lord Justice Maurice Kay, 10 June 2010

Tort - Motor vehicle - Damage to vehicle owned by claimants - Claimants hiring another vehicle and seeking to recover spot rate of hire from defendants - Measure of damages

BB was a motor dealer. One of its vehicles was damaged in an accident which was the fault of the defendant and could not be driven until it had been repaired. BB's service manager, rather than simply reallocating a similar car from stock, hired an equivalent substitute vehicle under a credit hire agreement. The ultimate duration of the agreement was 120 days, and the sum of £3,071.40 (repair costs) and £30,239.00 (credit hire) was claimed from the defendant. The trial judge found that BB did not need to hire another car, so that that it had failed to mitigate its loss, but that BB was nevertheless entitled to general damages for loss. The judge found that only a period of 48 days had been justified, and he awarded general damages for loss of use of £12,000 at £250 per day, the amount of the credit hire charges. The Court of Appeal set aside the award of general damages. BB was under a duty to mitigate its loss and it had failed to do so. That raised the question of the measure of damages in circumstances where the claimant did not need to replace the vehicle. The measure was not loss of the cost of hiring a replacement vehicle (as it would be for a private person) but one based on interest on capital and depreciation.