Andrew Prynne QC and Stephen Cottrell appear in Landmark Credit Hire Case
27 July 2011
The case is currently the leading authority on two contentious issues in the credit hire field. The judge accepted the Defendant's argument that The Cancellation of Contracts Made in a Consumer's Home and Place of Work etc Regulations 2008 ('The Regulations') applied to a credit hire agreement signed by the Claimant at his home when the car was delivered. The 2008 Regulations require a trader such as a hire company to provide the consumer (the claimant) with a cancellation notice setting out his right to cancel the agreement. The judge held that the failure of the hire company (accident Exchange) to provide the claimant with a cancellation notice rendered the agreement unenforceable so that the claimant had no loss in respect of the hire agreement. The Claimant's arguments based upon European Law and the Human Rights Act were rejected.
Despite this conclusion on the effect of the Regulations, the judge went on to award the hire charges in full on the basis that the Claimant had taken out a policy of insurance at the time of hire so that the insurers would indemnify him against having to pay the hire charges. The judge found that a payment by Accident Exchange in its capacity as insurance agent to Accident Exchange in its capacity as Hire Company was to be treated as a valid payment by an insurer and that this meant that the claimant should be taken to have paid the hire charges himself. AS he had paid, he had suffered a loss. The judge further found that the Claimant - a Bentley driver - was impecunious.
Permission to appeal was granted.
This case is expected to have a substantial impact on a large number of claims. It reiterates the decision of HHJ Maloney in Chen Wei v Cambridge Power and Light [9th September 2010 - Cambridge County Court] (a case in which Shaman Kapoor appeared for the successful Defendant) that the regulations apply to hire agreements. It will prove a decisive blow against claims for hire made through hire companies with no cancellation notice and no insurance product. On the other hand, it establishes that hire companies that have an insurance arrangement along these lines will be able to circumvent the Regulations by making a payment under the policy.