September 2, 2016

Car Hire - Price trumps locality in credit hire claims

In Jonathon Grice v Atos Origin IT Services on appeal at Bradford County Court, Recorder Smith held the chosen car hire firm does not have to be the one nearer to the policyholder's house, if a cheaper car hire firm is found to be located further away.

On 17 September 2014 Jonathon Grice and an employee of Atos Origin IT Services were involved in a car accident which resulted in the Claimant requiring a hire vehicle. The Claimant submitted a hire rate from Accident Exchange, located close to the Claimant's home, amounting to £362.70. The Defendant's insurers found a hire firm, Avis, located 40 miles away from the Claimant with a hire rate of £140.63.

At first instance, the judge held the Claimant should use the cheaper car hire firm. The Claimant appealed the decision based on the argument that Avis was located too far away from this home and the rate he submitted from Accident Exchange should be accepted. The appeal was heard on Friday 26 August where the court upheld the earlier ruling.

Recorder Smith stated this is an "era when the internet is the first resort for anyone researching anything, the concept of locality is immediately enlarged; this is further exemplified by the preparedness of organisations to win commerce by offering delivery and collection services (whether at a cost or at no cost)."

The decision has been welcomed by insurers; considering the wider locality of a car hire firms will bring more certainty in future cases and allow lower rates to be negotiated. Furthermore, claimants will not be able to deploy locality arguments when claiming hire rates as insurers can search a wider geographical area for a cheaper rate when negotiating the claimant's hire claim, particularly where a delivery and collection service is offered.

This case is a continuation of courts making 'sensible' decisions in respect of hire claims following the case of Steven v Equity Syndicate Management Limited  which clarified the approach courts will take when calculating the basic hire rate.