SOBRANY V UAB TRANSTIRA

[2016] EWCA Civ 28, Court of Appeal, Lord Justice Laws, Lord Justice Lewison and Lord Justice Christopher Clarke, 28 January 2016

Insurance (motor) - Credit hire charges - Credit hire agreements unenforceable - Charges paid by insurers - Whether two policies existed - Subrogation - Contribution

The claimant's Bentley was seriously damaged by a lorry being driven by an employee of the defendant. The claimant entered into a credit hire agreement on 26 September 2009 under which he hired a replacement vehicle. There was a second credit hire agreement on 6 October 2009 and a third agreement on 5 January 2010. All of the agreements were with Accident Exchange. The total duration of all three agreements was some six months. The claimant did not pay credit hire charges himself, but was insured against liability to do so by AmTrust under a policy entered into on 26 September 2009. Charges of £142,751 were incurred by the claimant and paid by AmTrust. The present action was a subrogated claim in the name of the claimant, but by AmTrust, seeking to recover from UAB the sum paid to Accident Exchange. UAB claimed that the second and third credit hire agreements were unenforceable in that they had not satisfied the mandatory requirements of the Consumer Credit Act 1974, so that the only sum owing was under the first agreement, that of £9,076.88. In the course of cross-examination at the trial, the claimant gave evidence that there had been a second insurance policy on 6 October 2009. UAB obtained permission from the trial judge to adduce evidence that there had been a second policy. The judge held that UAB was liable only for £9,076.88, in that the first policy excluded AmTrust's liability if there was any other insurance in place. Further, the judge held that the period claimed for was excessive, so even if there had been an entitlement to recover after 6 October 2009 the total loss should be reduced to £101,382.22. The claimant appealed against the decision to deny recovery for the period after 6 October 2009, although reduced the claim to £101,382.22.