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You’ve had an accident. The other driver’s insurers get in touch and offer you a courtesy car while yours is getting fixed. You’ve already retained an accident management company that advises you to pay them no heed. Is it unreasonable to reject the defendant’s offer?

This was a question recently considered by the High Court in Belfast.

Background

A road traffic accident occurred on Victoria Street, Armagh, on Thursday, 10 January 2019. The plaintiff claimed the cost of repairs to his vehicle and for car hire while it was off the road.  

The plaintiff’s damaged vehicle was a BMW 520d. The hire car, a BMW 4 series, was provided under an agreement dated 21 January 2019 with an accident management company. The daily rate was £205.58. Their invoice for four days totalled £1,184.78.  

The defendant’s insurer wrote to the plaintiff on 21 January 2019 – the same day he entered into his agreement with the accident management company – offering to provide him with a similar hire-vehicle without charge. They enclosed a booklet detailing what this would cost the defendant. In this case, the daily rate was stated as £41. 

Judgment

At the County Court, the plaintiff was awarded £196.80 for the car hire. This would appear to be punitive of the refusal to accept the defendant’s offer of 21 January 2019.

Where a claim for vehicle hire charges is to be reduced …[for] unreasonable delay [by or on behalf of] a plaintiff, the judge should explain what the reasonable action was… and what period of vehicle hire has been disallowed

McKibben v UK Insurance [2021] NIQB 27 per Scoffield J at [123]

On appeal, there was some debate over whether the plaintiff had been provided with the correct rate information. The case law requires that a defendant clearly indicates to the plaintiff in any offer how much the vehicle would cost the defendant to provide.  

Mitigating Loss

Firstly, the defendant has to prove that there is a clear offer of a replacement vehicle so that the plaintiff could make an informed choice to accept that vehicle. Secondly, the defendant must satisfy the court that there is a genuine offer capable of fulfilment at the stated rate. Thirdly, the defendant must prove that the particular plaintiff’s failure to avail of the offer was so unreasonable as to constitute a failure to mitigate loss. 

Per McAlinden J at [10]

Applied to the plaintiff’s case, Mr Justice McAlinden determined:

  • The plaintiff had used the accident management company before and considered that they provided a very good one stop all-in service
  • His word was his bond, and “he was not in the business of going back” on it
  • He was told by the accident management company to pay no heed to the defendant’s letter of 21 January 2019
  • In any event, the plaintiff considered the defendant’s offer to be “too good to be true”

Conclusion

Although the High Court was not satisfied that the plaintiff had acted unreasonably in rejecting the defendant’s offer:

…the advice given by [the accident management company] to the plaintiff was wrong and unreasonable and that it would do a material injustice to the defendant to simply ignore this specific matter. I, therefore, consider it appropriate to only award the plaintiff 80% of the amount claimed and therefore, there will be a decree in the sum of £947.84 plus costs…

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