Credit Hire: A vehicle’s roadworthiness and the claimant’s duty to mitigate their loss

Overview of the case and media attention

A recent county court case heard before District Judge Lumb at Oxford County Court, Lauren Piercy v Mary Kangethe (2025) has caught press attention with the case being published on the BBC News Website; “Judge Slams ‘staggering’ credit hire car costs” (31 March 2025). The case considered what reasonable car hire rates and period should be for a claimant who is under a duty to mitigate their losses.

Background to the claim and credit hire arrangement

The claimant, a nurse, pursued damages against the defendant for vehicle damage related losses following damage sustained to her parked vehicle caused by the defendant’s reversing vehicle. The defendant challenged the claim for credit hire including rate of hire, period of hire, need to hire, impecuniosity and failure to mitigate her losses.

The claimant‘s vehicle was on lease from her employers NHS Fleet, who she contacted following the collision. They transferred the claimant to Winn Solicitors who then set up the credit hire with their subsidiary business, On Hire Limited. The claimant was provided with a Tesla Model 3 in place of her VW ID4 at a cost of £524.70 a day including all extras and VAT, for 96 days starting the day after the accident. The total amount for hire was £50,371.20.

Vehicle condition and claimant’s awareness

The claimant stated during cross examination that she needed a car for work and for the school run. The engineer’s report stated that the damage to the claimant’s vehicle was repairable, and the vehicle was roadworthy, with an estimate for the repairs to take a week to complete. The claimant told the court that she was never sent a copy of the engineer’s report and was surprised that the engineer assessed her vehicle as roadworthy and, unbeknown to her, she could have continued to drive her own vehicle until the repairs were ready to be carried out. If she had been given the option, she would “absolutely have taken the car back.” The defendant had sought to argue that a reasonable period would have been 21 days in the circumstances.

Disputed hire rate and period

The defendant presented BHR evidence provided by Enterprise (the closest to the claimant and the one that she was most likely to have chosen from the reasonable options) that averaged at £175 per day. The claimant pleaded to have been impecunious and provided statements for her six accounts held. The accounts demonstrated that the claimant was a “very prudent manager of the household finances” and had an account with an emergency £4,000 fund. The judge stated it was obvious, for 96 days, even on the BHR rate of £175, the claimant could not have afforded £16,800 to hire a replacement vehicle. With a reasonable 21 days hire at the BHR rate of £175 would have been £3,765 and this would have been close to the limit of £4,000. The judge was satisfied that the claimant could not have afforded to have hired without unreasonable sacrifice and stated that the credit hire rates were the most applicable.

Impecuniosity and reasonableness of action

DJ Lumb commented “that unfortunately for the defendant, these claims are rarely decided on the basis of what the claimant could have done to mitigate her losses had she known the full circumstances but on the basis of what she did know and any delay has to have been caused by the claimant’s own conduct or actions. That is the ratio of the decision of the Court of Appeal in Mattocks v Mann [1973] RTR 13 later confirmed in Burdis v Livsey [2002] EWCA Civ 510 which are binding on this court.”

The evidential burden of proving the claimant’s failure to mitigate their loss is upon the defendant. In this case, the defendant could not discharge this burden. DJ Lumb stated that Winn Solicitors and their subsidiary company, On Hire Limited, were acting as the claimant’s agents. However the garage were not, as there was no contractual relationship between the claimant and the repairer. The hire period was much longer than anticipated due to an unexplained delay in the repairs being completed but this was not caused by the claimant. The claimant’s conduct throughout was beyond reproach. She was simply following the instructions that she had been given by her NHS employers.

Judgment was given for the claimant for the pleaded claim save for the £40 administration charges with credit given for an interim payment made in respect of the repair costs.

Judge’s findings and final judgment

The BBC News article highlighted DJ Lumb comments “what might come as a shock to the general public is how the Credit Hire Industry operates. In particular, some may consider the sums of money that motor insurers of culpable policyholders become liable for to be staggering. These are recoverable by operation of the existing common law determined by the Higher Courts and binding upon judges in the County Court. In an age where motor insurance premiums are reported to have risen to unprecedented levels some may find it surprising that there appears to be no real appetite in the insurance industry to campaign for reform, presumably by Parliament, to control the level of credit hire charges compared to the ordinary market basic hire rate.”

The claimant was clearly the innocent victim who had followed instructions from her employers and was honest enough to say that had she had known her vehicle was roadworthy, she would have mitigated her loss by asking for her roadworthy vehicle to have been given back for her to continue to use. The difficulty the defendant faced was they could not prove the burden that the claimant had not mitigated her losses. It seems the claimant had been kept in the dark with regards to the roadworthiness of her vehicle and had not been provided with the various invoices and requests for payment. What more could the defendant have done to prove she had not mitigated her loss if it is the claimant’s case that she had been kept in the dark.

Legal principles on mitigation of loss

The general principles in relation to mitigation are well known and well-established. Where a person suffers a legal wrong, they are not entitled to sit back, let damage accrue and then recover all of the damage in money from the defendant. However, the claimant must only take reasonable action to minimise the amount of the loss suffered. In mitigating his loss, the claimant victim of a wrong is only required to act reasonably and the standard of reasonableness is not high in view of the fact that the defendant is an admitted wrongdoer. Lord Macmillan put this point well in Banco de Portugal v Waterlow (1932) AC 452,

“Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticize the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken”.

It must also be borne in mind that the person expected to mitigate and whose actions are considered is the claimant only (as the party to the action). Therefore, the greater knowledge or understanding of the enablers, such as accident management companies and hire companies, as to the market and credit hire industry is unlikely to be brought into consideration.

Wider implications and industry concerns

Despite the case attracting the attention of the BBC and District Judge Lumb concluding “what might come as a shock to the general public is how the Credit Hire industry operates”, the judge was left with little option but to allow the period and rate in full. This is another county court case that raises the question of whether there needs to be Parliamentary reform with the insurance industry and/or legislation/protocols for credit hire claims.