Credit Hire – Defendants fighting back

Gavin Clark5th September 2013

Agenda

Ramirez -v- EUI LtdBicycle Credit HireRecovery and StorageInterventionWhat does the future hold?

Pre-issue advice Is liability disputed? Settle non-contentious heads Consider hire

• Issues on locus standi, enforceability, need?

• Make admission to ensure balance is below SCT limit and discharge by way of interim payment

Ramirez -v- EUI Ltd

The claim comprised:-

• Repairs of £1,588.65.• Hire charges of £5,907.60.• Miscellaneous expenses of £50.

Liability not disputed Repairs were admitted Admission made of £3,459.60 for hire An interim cheque issued leaving a balance of £2,498.

Background

Issued for the full amount. No credit given for the interims. We admitted liability, quantum for

repairs and the claim for hire up to the admission i.e. £3,459.60.

We put the claimant to proof as to the balance and argued that this was a SCT matter.

Proceedings

The admission was not accepted by the claimant and therefore the whole of the claim for hire charges was disputed.

This was a clever ploy to deprive a claimant of his costs and to put pressure on claimants to under settle claims

This was a FT matter.

No issues re locus standi, enforceability or need and therefore the issues were not at all complex.

By virtue of the admission the amount in dispute was just £2498.00.

If the claimant was awarded less than the admission we would not seek repayment of the balance.

This was a SCT matter.

The argumentsCLAIMANT DEFENDANT

DJ Wakem cited the explanatory note in Part 14

“It follows from these provisions that if in relation to a claim the value of which is above the small claims track limit of £5,000, the defendant makes before allocation, an admission that reduces the amount in dispute to a figure below £5,000 the normal track for the claim will be the small claims track”.

Matter allocated SCT but gave permission to appeal.

NB – the claimant did not apply for costs

Judgment

When considering allocation the court must consider:-

– Any amount for which the defendant does not admit liability is in dispute.

– Any sum in respect of an item for which judgment has been entered is not in dispute.

– Any specific sum claimed as a distinct item and which the defendant admits he is liable to pay is not in dispute.

– Any sum offered by the defendant which has been accepted by the claimant in satisfaction of any item which forms a distinct part of the claim is not in dispute.

As to recovery of pre-allocation costs, the claimant can, before allocation, apply for judgment with costs on the amount of the claim that has been admitted

The appeal

Court of Appeal

Withdrawn at eleventh hour

Appeal marked as dismissed

Appellant to pay costs

But is this the end?

Pre-allocation - £1160 + VAT + 20%Post-allocation - £1880 + VAT + 20%Pre-listing - £2655 + VAT + 20%Potential saving - £1495 + VAT

BenefitsCost savings

Pre-August – £1000s

Post August

Willingness to negotiate

More favourable outcomes?

Cycle Accident Management Services (CAMS)

Agreements typically claim charges in the region of £35.00 plus VAT together with an additional daily amount of £5.00 plus VAT for CDW.

Also claimed are charges for delivery and collection.

Charges are often grossly disproportionate to the value of the bicycle.

The new battleground

How to defeat these claims Enforceability

Need

Higher threshold?

Alternatives

Period

Rate

Impecuniosity

Londonbicyle.com (£50.00 p/week)

Intervention?

Johnston -v- Loizou

Recovery & Storage Charges

Increase in frequency of Recovery & Storage

The arguments:– Enforceability

• Valid credit agreement?• Regulations 2008

– Need– Mitigation

Hasnath -v- Shahid

Intervention - Prevention is better than cure

ABI/GTA restrictions

A successful intervention:– Telephone calls – Telephone transcripts– Copley compliant letter

Smith -v- Currier

What does the future hold?

Post-LASPO The referral fee ban

Closer cooperation between CHOs & solicitors

Increase in the small claims limit to £10k

The future of the ABI GTA

Office of Fair Trading & Competition Commission

GTA mediation

The GTA Portal

Hire rate reviews

Office of Fair Trading – report May 2012

Inflating the costs of replacement vehicle. Estimated increased cost - £560.00/hire Remedies:

– Reforming the GTA– An extension of the referral fee ban– The at fault insurer to have first option of

supplying a vehicle– The introduction of a first party

insurance model Referral to the Competition Commission

Competition CommissionPossible Remedies

Improvements to the GTA.

An extension of the referral fee ban

Non fault insurer having first option of intervention

Each insurer deals with its own policyholder.

An independent monitoring and rate setting scheme for non fault claims.

http://www.competition-commission.org.uk/our-work/private-motor-insurance-market-investigation

Summary

Ramirez -v- EUI Limited Bicycle Credit Hire Recovery and Storage Intervention Credit Hire - Post LASPO What does the future hold?

Any Questions