McCausland Holdings Ltd v Tesco Underwriting Ltd [2025] NICty 4, is a Belfast County Court judgment that addressed diminution in value in car accident claims.  Lacey Solicitors addressed diminution in our previous article last month and comon issues for insurers dealing with these types of claims.

This new judgment however also addresses whether both the bailee and bailor following a car accident can bring claims seperately for repairs and depreication, or does a settled claim extinguish all rights of further recourse?

This case is helpful insofar that it revisits a number of important principles namely diminution in value, and bailment, while confirming the continuing relevance of res judicata and the rule in Henderson v Henderson in the context of motor claims.

The Facts

The Plaintiff, McCausland Holdings Ltd, owned a Toyota Prius provided to a driver, Mr Hamid, under a Rent-to-Own agreement. In May 2023, the vehicle was involved in a collision with a driver insured by the Defendant, Tesco Underwriting Ltd. Mr Hamid issued proceedings for vehicle repairs, hire charges, and loss of earnings. That case settled for £5,000 “in full and final settlement of any claims on behalf of the plaintiff arising out of the accident…”

Subsequently, McCausland Holdings Ltd issued a separate action, seeking £1,000 in respect of diminution in market value of the vehicle. The Defendant sought to strike out the new action.

Bailor and Bailee: Who Can Sue?

The court reaffirmed the principle from The Winkfield [1902] P 42 and Armstead v RSA [2024] UKSC 6 that both bailor and bailee may have rights to claim, but double recovery is impermissible:

“A bailee in possession of property can claim damages from a stranger whose negligence results in the loss of, or physical damage, to the property.” [para 8]

District Judge Logue confirmed:

“There existed a bailor/bailee relationship between Mr Hamid and McCausland Limited… The possession of the subject vehicle was for a specific purpose and with the permission of the legal owner.”

Quoting the Supreme Court in Armstead, she further noted:

“The bailor and bailee may each be entitled to sue for loss of or damage to property. The only restriction is that there cannot be double recovery… A wrongdoer who has already paid compensation to the bailee… has an answer to such a claim by the bailor.”

Diminution in Value in Car Accident Claims or Depreciation: Two Sides of the Same Coin

A question for the court was whether depreciation following repairs was a distinct loss from the cost of repair, and therefore separately recoverable?  The Court came to the determination that both are merely different methods of quantifying diminution in value.

Citing Coles v Hetherton [2013] EWCA Civ 1704, the Court emphasised:

“The proper measure of [damage] is the diminution in value… This follows the general principle in awarding damages, ie that of restitution… If the chattel can be economically repaired, the claimant is entitled to have it repaired… although the claimant is not obliged to repair… to recover the direct loss suffered.”

And crucially:

“Depreciation is not a separate distinct loss, it is part of the measure of the direct loss, i.e., the overall diminution in value arising from the damage caused.”

“The cost of repairs and depreciation are elements of diminution in value and do not represent different losses – they are both measures of the same direct loss.”

Res Judicata and Abuse of Process

The Court held that Mr Hamid’s earlier proceedings had already dealt with the diminution in value of the vehicle, notwithstanding that depreciation was not explicitly pleaded as a head of claim in the Replies to Particulars.

“In pursuing a claim for the cost of repairs Mr Hamid has already brought a claim for diminution in value of the subject vehicle setting out a claim for general damages in respect of same.”

The signed settlement agreement between Mr Hamid and Tesco Underwriting explicitly stated it was:

“In full and final settlement of any claims on behalf of the plaintiff arising out of the accident.”

Drawing from Henderson v Henderson [1843] 3 Hare 100, the Judge confirmed:

“The rule requires parties to bring forward their whole case… and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matters which might have been brought forward…”

While the Plaintiff’s counsel sought to invoke Johnson v Gore Wood & Co [2000] UKHL 65 and the Article 6 ECHR right of access to justice, the Court found those arguments unpersuasive:

“There is no interference with the plaintiff’s Article 6 rights as the claim for diminution in value has already been advanced and settled.”

Conclusion

District Judge Logue’s decision to strike out the claim is a careful and thorough application of a number of important principles in litigation. It guards against duplicity of proceedings, reaffirms the position in diminution in value in car accident claims and ensures that defendants are not exposed to serial litigation by different parties for what is in truth a single harm.

“The earlier action included a claim for cost of repairs. Those costs were claimed as general damages… I find that a claim for diminution in value… has already been advanced, and the plaintiff is precluded from re-opening the claim.”

For insurance law practitioners, this case is a prime example of how established doctrines in bailment, damages and procedural fairness intersect in modern litigation involving vehicle financing arrangements.

In this recent decision of the High Court in Northern Ireland, Lloyd v RSA Insurance, McLaughlin J considered a claim arising from a damage-only road traffic collision.  His commentary provides sound guidance on issues such as vehicle roadworthiness, mitigation of loss, and reasonableness. Whilst liability for the collision was not in dispute, the judgment is instructive for insurers and defence solicitors managing credit hire claims Northern Ireland and the Republic of Ireland.

Circumstances

A parked Mercedes owned by the Plaintiff Mr Lloyd was struck by an Education Authority vehicle, was insured by RSA.

Mr Lloyd used the services of AH Assist, an Accident Management company, that provided him with the usual services following a non-fault accident i.e. replacement vehicle, storage etc.

Once the matter was litigated, the Plaintiff presented the following heads of claim;

• £12,100 for the pre-accident value of the vehicle;
• £43,122 in credit hire charges (149 days at £288 per day);
• £8,010 in storage charges (253 days).

Unsurprisingly, reasonableness and mitigation of loss were the key issues, specifically the extent of damage, i.e. whether the vehicle was beyond economic repair, and whether continued hire and storage charges were reasonable in the circumstances.

Considerations of the Court

1. Was the vehicle beyond economical repair?

The plaintiff’s motor assessor, Mr Carvill, initially estimated repair costs at just over £9,700 (including items marked “subject to confirmation”), placing the figure narrowly above 80% of the Pre-Accident Value.  On this basis, Mr Carvill was of the opinion that the vehicle was beyond economical repair.

His estimate of the repair costs was based on assumptions about whether certain items were actually damaged and would need replaced. Because his conclusion regarding the economics of any repairs relied on the total potential repair costs, any change in those assumptions could have significantly influenced the decision to proceed. Therefore, a definitive assessment of those specific repair items was essential to justify the decision not to carry out the repairs—and to support the continuation of hire charges in the meantime.

As the evidence made clear however, if that had been done, it would have established that not all of the potential repairs were necessary and that it was economically viable to repair the car.  On his own figures, the  true value of the repairs was something in the region of £6950.00 inclusive of VAT.  The significance of this reduction was that the cost of repairs was just 57% of the vehicle’s pre-accident value. On that basis, the judge found that the vehicle was in fact economically repairable using Mr Carvill’s own 80% threshold calculation, which was not challenged.

2. Was the vehicle Roadworthy?

Mr Carvill’s stated that the vehicle, at the time of inspection on 4^th January 2024, was not roadworthy due to a dislodged bumper panel, potential damage to the bumper bar and issues with the boot lid not closing.

The Plaintiff however had presented his vehicle for MOT inspection on 2nd January 2025, which was two days prior to Mr Carvill’s inspection.  The Plaintiff gave evidence that he used duct tape to secure the bumper panel.  Most importantly, the vehicle passed inspection.

The defendant’s expert, Mr Douglas, gave contrasting evidence to Mr Carvill’s: the bumper remained fixable in three out of four points, the boot operated normally, and there was no evidence of significant structural damage.

The judge considered the MOT certificate strong evidence of roadworthiness and concluded that the plaintiff had in fact failed to discharge the burden of proving otherwise.

3. What is the purpose and significance of a vehicle test certificate

The statutory framework governing the requirements for vehicle inspection and certification is contained in a combination of Part 3 Road Traffic (Northern Ireland) Order 2003 and Motor Vehicle Testing Regulations (Northern Ireland) 2003 [S.R.2003/303].

Article 61(2) of the 2003 Order empowers the Department to make Regulations prescribing the requirements for inspection and certification of vehicles. The current Regulations are the Motor Vehicle Testing Regulations (Northern Ireland) 2003 [S.R.2003/303].

• Regulation 4 provides that, for the purposes of Article 61(1)(b) of the 2003 Order, the condition of the vehicle “should not be such that its use on a road would involve a danger of injury to any person, having regard, in particular to the items described in Schedule 3.” Collectively, these are known as the “condition requirements.”
• Schedule 3 contains a list of vehicle components which must be considered during an inspection. The list includes: “wheels and hubs”; “suspension system”; “bumpers”; “wings”; “body”; and “doors, locks and hinges”, all of which feature in the list of items damaged or potentially damaged in this case.
• Regulation 12 provides for the examination by the Department of vehicles and for the issue of a test certificate, if it is found that the condition requirements and the statutory requirements are met. If they are not met, a Notice of Refusal must be issued

Assessment of Credit Hire and Storage

McLaughlin J took a measured view of the credit hire arrangements. He did not accept the Defendant’s submission that the key issue was whether or not the car was unroadworthy on the date the hire commenced. He did not consider that the claim was limited to such a ‘binary assessment.’

“The jurisprudence of these courts is replete with examples of cases in which the reasonableness of the fact, rate or duration of post-accident credit hire/repair arrangements has been challenged by defendants. What is also clear from the authorities is that the overriding principle against which these issues should be assessed is restitutio in integrum – ie. that compensation should be measured, as best as possible, to match the reasonably foreseeable damage which actually flowed from the accident, together with consequential losses reasonably incurred. Where a plaintiff has entered into a credit hire or credit repair arrangement, the assessment should be made by considering the matter from the perspective of the plaintiff and the reasonableness of the steps which were taken (or were not taken) by the plaintiff in the aftermath of the accident.”

Applying those principles to this case therefore, he determined that it was initially reasonable for the plaintiff to take prompt action in the aftermath of the accident and arrange a replacement hire vehicle pending an engineer’s assessment.  For reasons unknown, AH Assist supplied the vehicle to the plaintiff on 23^rd December 2023 but did not begin charging  until 2^nd January.  If hire charges had accumulated, they would have been reasonably incurred.

He did not however consider it reasonable for the plaintiff to continue the hire arrangements after this period in light of the successful MOT inspection. It was the opinion of the Department’s inspectors, on 2 January 2024 that the condition of the plaintiff’s vehicle was such that its use on a road did not “involve a danger of injury to any person.” That conclusion was reached following an examination of those parts of the car specified in Schedule 3.  As a result, the fact that the car had been certified by independent departmental inspectors as capable of being used without risk of injury to “any person”, the certificate in the judge’s view, pointed clearly to the conclusion that the car was roadworthy on that date.

Furthermore, he was not satisfied with steps taken by AH Assist after Mr Carvill’s report.  He believed that that the failure to follow up on the conditional findings of said report, particularly to confirm whether certain repairs were needed – rendered the continued hire and storage arrangements unreasonable.

“On behalf of the plaintiff, no evidence was called from a representative of AH Assist to explain the actions which it took (or did not take) following receipt of Mr Carvill’s report. Since the economic viability of conducting repairs was entirely dependent upon confirmation of whether some of the repair items identified by Mr Carvill were in fact necessary, this omission is of considerable significance to the claim. Mr Carvill’s evidence was that he was not instructed to carry out a further inspection. It is not therefore clear whether any consideration was given to this issue at all by AH Assist. I have no evidence as to whether AH Assist undertook any efforts to arrange for the car to be repaired, notwithstanding the authorisation which the plaintiff appears to have provided… The only evidence was that the hire arrangements continued until terminated unilaterally by Mr Lloyd. One obvious inference is that AH Assist simply proceeded on the erroneous assumption that the car was beyond repair and therefore continued the hire arrangements while awaiting compensation proposals from the defendant insurer, with charges mounting in the interim period. Whatever the explanation for events following receipt of Mr Carvill’s report, it is clear that the car was not repaired by AH Assist or anyone instructed by them.”

As a result, the judge limited recovery to:

• 7 days of hire charges representing time for the damage to be assessed, report to be discussed with the Plaintiff and repairs be carried out (£2,016)
• 17 days of storage charges (£510)

The claim for £43,122 in hire was therefore reduced by over 95%.

Repair Costs

Whilst the plaintiff had claimed for the pre-accident value of the vehicle, the Plaintiff had in fact chosen to repair the car at a private garage using second-hand parts of his own accord using his own funds. He paid £6,720 in cash, which the court accepted as the appropriate measure of loss.

What If Impecuniosity Had Been Pleaded?

It is worth considering whether the outcome in Lloyd v RSA Insurance would have been different had the plaintiff pleaded impecuniosity.  In McCauley v Brennan, another judgment involving credit hire claims in Northern Ireland, Keegan J awarded the full hire period of 455 days to a single mother on benefits, accepting that she had no realistic means to pay for repairs or excess charges upfront. The court was satisfied that the plaintiff acted reasonably throughout, even in the face of substantial hire costs, and placed weight on the insurer’s delays and the practical realities of her financial position.

By contrast, in Clarke v McCullough, the Court of Appeal took a stricter line, reducing the credit hire award by half because the plaintiff  who was not impecunious had the means to pay for repairs but failed to act on them. The court was unimpressed by the advice of the accident management company in that case and emphasised the need for plaintiffs to make reasonable financial choices where they have the ability to do so.

Its therefore reasonable to suggest, had impecuniosity been properly pleaded and proven in Lloyd, the court may well have  approached the extended hire period differently and assessed the reasonableness of continuing hire charges differently.

This Judgment makes it clear that had the court been asked to decide the case on the roadworthiness of the plaintiff’s vehicle alone, it would have found the Plaintiff had not discharged the burden of proof to establish the car was unroadworthy.  That said, the judgment also repeatedly stated that in this case and other cases involving credit hire claims Northern Ireland, the roadworthiness of the vehicle was not the single or decisive issue.

“Credit arrangements involving rental or repair rates which are higher than non-credit arrangements may also be reasonable on the facts of the case, particularly if the plaintiff can demonstrate impecuniosity or that it is otherwise unreasonable to expect that he/she should fund the costs of hire/repair from personal resources or make a claim under their own comprehensive insurance policy.”

What this means for Credit Hire Claims in Northern Ireland

This decision reaffirms several principles that will be familiar to insurers and their legal representatives:

• The existence of a valid MOT certificate is compelling evidence of roadworthiness.  In a similar vein, a failed MOT examination will be prima facie evidence that a vehicle is not roadworthy.  In all cases Defendants should proactively obtain MOT records when defending hire claims.
• Plaintiffs, and any AMCs acting on their behalf, if their terms allow, have a duty to act on conditional engineering reports and to take timely steps to investigate whether a vehicle is repairable.  It is not reasonable to continue credit hire arrangements by reason of a failure to take reasonable steps to mitigate the continuing loss and to ascertain whether the vehicle was capable of economic repair.
• Credit hire claims must be scrutinised with reference to actual needs and efforts to mitigate, not assumptions or defaults.  The court was willing to dissect day-by-day reasonableness of hire and storage.  Insurers can successfully reduce claims by showing that a reasonable plaintiff would have acted differently.

At Lacey Solicitors, we act for insurers across both Northern Ireland and the Republic of Ireland.  For more information or strategic advice on resisting inflated vehicle damage or credit hire claims, contact us using our online portal and speak with Ruaidhrí Austin, Partner in charge of Credit Hire Litigation.

When a driver suddenly loses control behind the wheel—spasms take over, reflexes override intention, or full unconsciousness sets in—courts may entertain the rare defence of “automatism.” At Lacey Solicitors, acting for motor insurers across both Northern Ireland and the Republic of Ireland, we advise on the merits of the Defence of Automatism in Motor Claims time and again.

Judgments in Northern Ireland, England and the Republic of Ireland all remind us that automatism remains a tightly confined exception in civil law: it applies only where a driver’s mind truly surrenders control of the body, without any warning or possibility of self‑intervention.

The Common‑Law Roots of Automatism in Motor Claims

Bratty v Attorney General for Northern Ireland was a Criminal Case, where Lord Denning described an automatic act as one done “by the muscles without any control by the mind” or by someone “not conscious of what he is doing.” That foundational definition has travelled into civil courts on both sides of the Irish border over the years.

Twenty years later, Roberts v Ramsbottom, [1980] 1 All ER 7 sharpened the knife: a driver escapes liability only if his loss of control was complete. Any flicker of awareness—if the driver still held even imperfect command of the wheel—means the defence collapses. In essence, Roberts treats civil automatism much like its criminal counterpart, requiring absolute involuntariness.

Mansfield’s Shift: From Culpability to Negligence

The English Court of Appeal’s 1998 decision in Mansfield v Weetabix offered a more nuanced path. Rather than asking whether the driver was morally culpable, Mansfield focuses on whether he breached the duty of care owed to other road users. If a driver is genuinely unaware—and could not reasonably have been aware—of an incapacitating medical condition, negligence is not made out. This approach avoids slipping into strict liability for unforeseeable medical emergencies.

Counihan v Bus Átha Cliath: Ireland’s Definitive Statement of Automatism in Motor Claims

In the Irish High Court’s 2005 ruling Counihan v Bus Átha Cliath, the bus driver at fault suffered an unexpected blackout caused by sick‑sinus syndrome—an arrhythmia that often strikes without warning. Medical experts confirmed the driver had experienced a total loss of consciousness at the moment of impact.

Judge Clarke in his decision, considered both English cases namely the rigid Roberts standard and the more flexible Mansfield test. He found that, even under the stricter rule of automatism in motor claims, automatism prevailed: there was no glimpse of control to hold the driver negligent. And under Mansfield, the driver had neither the knowledge nor any reasonable ground to suspect his heart condition, so no breach of duty arose.

When Automatism Will—and Won’t—Succeed

Across Northern Ireland and the Republic, case‑law relating to automatism in motor claims threads a consistent theme:

1. Burden of Proof.  The defendant must establish automatism on the balance of probabilities. This is a high threshold, particularly in civil claims where the consequences for claimants can be severe.
2. Total vs. partial control. Automatism only applies if the defendant’s mind abandons control altogether. Any residual awareness or ability to steer—even poorly—undoes the defence (see Broome v Perkins, where a diabetic driver retained enough control to be held liable).
3. Foreseeability. Under Mansfield, insurers should ask: could the driver have known of the condition? A history of episodes, medical warnings or missed prescriptions will erode the defence.  Courts closely examine whether the loss of control was truly unforeseeable. In Green v Haynes [2014], the court rejected the defence where the defendant had felt unwell earlier in the day and chose to drive.
4. Evidence‑intensive. Medical records, expert testimony and precise accident timelines are vital. Insurers must scrutinise GP notes, hospital admissions and any prodromal symptoms—dizziness, ringing in the ears, visual disturbances—that might suggest the driver should have stopped.
5. Licensing duties. Drivers owe an ongoing obligation to inform the DVLA (in Northern Ireland) or the NDLS (in the Republic) of relevant medical conditions. Failure to declare can undermine the argument of unforeseeability.

Tips for Insurers from Lacey Solicitors Road Traffic Accident Specialists

When we advise on the merits of automatism defence we consider the following:

• Gather the medical evidence. Request full disclosure of GP and hospital records, prior diagnoses and prescriptions pre-proceedings.  In NI there is a mechanism by virtue of Section 31 of the Administration of Justice Act 1970 and Order 24 Rule 8 of the Rules of Court of Judicature to obtain relevant notes and records prior to the issue of proceedings.
• Map the accident timeline. Pinpoint the exact moment of incapacitation through CCTV, telemetry data or eyewitness accounts.
• Engage specialists early. Cardiologists, neurologists or endocrinologists can address both blackout causation and warning signs.
• Probe licensing disclosures. Confirm whether the driver properly notified licensing authorities of any condition that could impair driving.
• Challenge prodromes. Look for any evidence—however fleeting—of pre‑accident symptoms that a reasonable driver would heed.

Crafting a Robust Defence Pleading 

When raising automatism as a defence, it is essential to plead the facts and legal basis with clarity and precision. A typical formulation in a Defence  may read as follows:

Denial of Negligence and Plea of Automatism

In the context of the foregoing admissions, it is denied that the Deceased was negligent, whether as alleged by the Plaintiff or otherwise howsoever characterised.

The Defendants will aver that, immediately prior to the collision, the Deceased was suddenly and without warning overcome by a total, involuntary, and disabling medical event, the effect of which was to deprive him of any conscious control over his actions.

It is denied that the Deceased was in breach of any duty of care owed to the Plaintiff, whether at common law or otherwise.

This approach ensures that the defence is properly articulated and that the factual and legal basis for denying negligence is clear.

Policy Gaps and the Need for Reform

While the Motor Insurers’ Bureau (MIB) in the UK and its Irish counterpart the MIBI provide vital compensation for victims of uninsured or untraced drivers, a troubling gap remains in both jurisdictions: there is no dedicated scheme for victims injured by drivers who suffer unforeseeable medical emergencies. When the defence of automatism is successfully raised, even fully insured drivers may be absolved of liability—leaving blameless victims without any recourse to compensation.

This legal reality is particularly harsh for pedestrians, passengers, and other road users who suffer serious, sometimes life-altering injuries through no fault of their own. Unlike victims of uninsured drivers, they cannot turn to any statutory fund or fallback scheme. Their suffering is real, their losses are profound, yet the law offers no remedy.

In Counihan, Clarke J. acknowledged this troubling gap with clarity and compassion:

“Victims struck by drivers who suffer unforeseeable medical emergencies have no dedicated compensation scheme. Unlike collisions involving uninsured motorists, these innocent pedestrians and passengers cannot turn to any special fund.”

He went on to note that addressing this gap is a matter for the Irish Government and not the courts. This observation underscores the limitations of judicial intervention and the urgent need for legislative reform.

Jurisdictions such as New Zealand have already taken steps to address this issue through no-fault compensation schemes, ensuring that victims are supported regardless of fault. Such models offer a blueprint for reform in Ireland and the UK—one that prioritises fairness, compassion, and public confidence in the legal system.

Conclusion

At Lacey Solicitors, we believe that the law must evolve to reflect the realities faced by innocent victims. While the defence of automatism in motor claims serves a legitimate legal function, it should not operate as a barrier to justice. We support calls for a statutory compensation scheme that ensures no victim is left behind simply because the driver who caused their injuries was not at fault.

Automatism in civil motor claims remains an exception so narrow it often feels razor‑edged. Lacey Solicitors stays at the cutting edge—monitoring new judgments, refining evidential strategies and balancing the interests of insurers against the real plight of victims caught in unforeseeable medical crises. By combining rigorous medical scrutiny with a deep understanding of Roberts, Mansfield and Counihan, we ensure that the defence of automatism is reserved solely for those rare cases where a driver’s mind truly, utterly lets go.

For further insights, contact our team in Belfast & Dublin using our online portal.

A stark reminder is a case dealt with by our own office where an individual with over £200,000.00 in one bank account sought to rely on impecuniosity after an accident in 2020.  He was a businessman who owned two chinese restaurants and sucessfully argued that those funds were savings that he would not sacrifice in the middle of a pandemic where the future was uncertain.