Credit hire

The ongoing battle between credit hire suppliers and motor liability insurers has taken a significant new turn in W v Veolia Environmental Services (UK) plc [2011] EWHC 2020 (QB). Where the credit hire agreement is rendered unenforceable by reason of some error by the supplier in compliance with the technical requirements for giving notice of cancellation rights to the customer, then the customer cannot seek to recover by way of damages the sums payable to the credit hire company. However, if those sums have actually been paid, the decision of HHJ Mackie QC in the present case shows that subrogation rights are unimpaired.

Veolia: the facts

The claimant was the owner of a 21-year-old Bentley worth around £16,000. On 12 December 2008 a refuse truck owned by VES struck the claimant’s car while it was parked outside his house. The damage rendered the car unroadworthy, and repairers arranged for the claimant to have a replacement vehicle while the Bentley was undergoing repair. The claimant required a ‘prestige’ vehicle in order to promote his ‘successful and professional image’, and he entered into a credit hire agreement with Accident Exchange under which they supplied him with a two-door Bentley Continental GT Coupe at a cost of £863.68 per day. The credit hire agreement was in what the judge described as conventional form: the claimant assumed liability for the contractual rate of hire, but payment was deferred pending a claim for those costs made against VES, and to the extent that the costs were irrecoverable the claimant was insured by AmTrust Europe Ltd (then known as IGI) against that risk.