Motor Vehicle Insurance - The demise of accident hire

(Diamond v Lovell, 11 May 2000, forthcoming in [2000] Lloyds Rep IR)

The House of Lords in Dimond v Lovell , 11 May 2000, forthcoming in [2000] Lloyd’s Rep IR, has affirmed the decision of the Court of Appeal (discussed in the October 1999 issue of Insurance Law Monthly ) but has done so in a manner which has cast severe doubts over the future viability of the accident hire industry. In the Court of Appeal the case turned on the technical question of whether accident hire arrangements were regulated by the Consumer Credit Act 1974 and, if so, whether the formal requirements of that legislation had been satisfied. The House of Lords, in addition, has discussed in some detail the very point of law upon which the accident hire industry is based, namely, whether the cost of hiring a replacement vehicle pending repairs to a damaged vehicle can be recovered in an action against the negligent driver who had caused the loss. This was a test case the outcome of which will have determined numerous other cases pending in lower courts