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Credit hire and impecuniosity: No excuses for inadequate documentation

  • 09 November 2020 09 November 2020
  • UK & Europe

  • Insurance & Reinsurance

The Court of Appeal has recently considered the evidential burden on claimants when alleging that they are impecunious. Handing down judgment, Lord Justice Coulson held that whilst “a claimant in an RTA claim is entitled to recover the reasonable cost of hiring a replacement vehicle”, the defendant is entitled to “know the case they had to meet”. Bare assertions of impecuniosity with no evidence to support them are inadequate.

Credit hire and impecuniosity: No excuses for inadequate documentation

Ali Diriye v (1) Bojaj (2) Quick-Sure Insurance Limited [2020] EWCA Civ 1400

Despite the changes made to the CPR earlier this year in respect of the mandatory requirements for pleading a credit hire claim, the issues raised in this decision regarding the provision of impecuniosity documentation will remain of relevance.  

Lord Justice Coulson was particularly scathing of “the incorrect notion that a claimant was entitled to advance a rubbishy case in stages, from pleading to witness statement to trial, presumably in the hope that, by the time the trial came on, there was a commercial imperative on the part of the respondents to settle the case”.



The Claimant, a minicab driver, was pursuing an action which included a credit hire claim in the sum of £12,048.29. The Claimant alleged that he needed to hire a vehicle on a credit basis (with the consequential higher rates) because he was impecunious. Lord Justice Underhill in Zurich v Umerji had stated that "in this kind of case it is clearly right that a claimant who needs to rely on his impecuniousness in order to justify the amount of his claim should plead and prove it".

In this matter, the Claimant had alleged impecuniosity, but provided no further information or documentation. In response, the Defendant responded that the claim was excessive and was the most important issue between the parties.

Following the continued failure by the Claimant to provide any information or documentation, the Deputy District Judge allocated the matter, fixed the trial date, and issued an Unless Order in respect of impecuniosity compelling:

  • The Claimant to file a Reply to the Defence in which the facts of the alleged impecuniosity are set out.
  • The Claimant to serve copies of appropriate documentation regarding his available level of income.

There was a dispute between the parties on alleged late service of the Reply and documentation. The District Judge refused the Claimant relief from sanctions, meaning the Claimant would be unable to claim credit hire charges at the upcoming trial, only basic hire charges. An initial appeal upheld this decision, and permission for a second appeal was granted.



The Court of Appeal held that the first instance and first appeal decisions were incorrect on the issue of late service but only insofar as to how many days the Reply was late. However, Lord Justice Coulson held that “even if the Reply had been served on time, the document itself failed to comply with the substance of the Unless Order”.

The Reply had created the circumstance that the Unless Order sought to avoid, the reiteration of a bare assertion of impecuniosity with no supporting facts or evidence. Therefore, this failure was in itself both serious and significant, and there was no reason or excuse for it – as per the first two stages of the Denton test.

In considering the third stage of the Denton test (a consideration of all the circumstances of the case), the Court held that the Claimant had consistently failed to tackle the issue of impecuniosity and “never engaged with the need properly to plead” and evidence his claim for credit hire charges. Therefore, the Claimant was refused relief from sanctions, and the appeal was dismissed.


What can we learn?

  • As stated above, the changes to the Civil Procedure Rules earlier this year made it a requirement for the Claimant to state in the Particulars of Claim whether or not they are alleging impecuniosity. However, as we highlighted at the time, there is no requirement for supporting documentation to be provided when the Particulars of Claim are filed or served. Therefore, whilst the District Judge in this matter had made a pre-emptive Unless Order in response to the content of the Defence, it may be that tailored directions supporting the new pleading benchmark provide the way forward in similar claims.
  • Nonetheless, this decision will serve as a timely reminder of the need to positively support a pleading of impecuniosity. This is likely to be particularly relevant in the coming months, especially where claimants may plead that financial issues have forced them to seek a credit hire vehicle.


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