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Author: Ruaidhri Austin

Automatism in Motor Claims: Navigating the Defence in Northern Ireland & the Republic of Ireland

Posted on by Ruaidhri Austin

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.

Impecuniosity in Northern Ireland Credit Hire Claims: Legal Principles and Strategic Defence

Posted on by Ruaidhri Austin

At Lacey Solicitors, with offices in Belfast and Dublin, we act on behalf of insurers across the entire island of Ireland in defending credit hire claims. One of the most pivotal and frequently litigated issues in these cases is impecuniosity—a claimant’s inability to pay for vehicle hire upfront without making unreasonable sacrifices.

This article explores the legal framework, key case law, and strategic considerations for insurers facing credit hire claims, where courts have developed a robust body of jurisprudence around the concept of impecuniosity.

What Is Impecuniosity?

Contrary to popular suggestion, impecuniosity is not strictly related to an individuals finances.  It refers to a claimant’s inability to pay for hire charges upfront without compromising essential financial obligations. As Stephens J explained:

“An individual who is not penniless can still be impecunious, because as a question of priorities he is unable to pay car hire charges without making sacrifices he could not reasonably be expected to make.”
— South Eastern Health and Social Care Trust v Flanagan [2015] NIQB 30

This principle is central to the duty to mitigate loss. A claimant must act reasonably to reduce their losses. If they cannot afford to pay for hire in advance, using a credit hire company may be justified—but only if they can prove their financial limitations.

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.

Legal Framework: Pleading and Proving Impecuniosity

If an individual seeks to rely on impecunioisty, the burden of proof lies squarely with the claimant. As Underhill LJ stated:

“A claim for the cost of hire of a replacement vehicle is, strictly, a claim for expenditure incurred in mitigation of the primary loss… The burden is thus on the claimant to prove (and therefore plead) that such expenditure was reasonably incurred.”
— Zurich Insurance Plc v Umerji [2014] EWCA Civ 357

Importantly, the Court of Appeal in Umerji also confirmed that impecuniosity is not limited to the rate of hire—it also applies to the duration of hire. If a claimant cannot afford to replace or repair their vehicle promptly, their impecuniosity may justify a longer hire period.

Burgess J reinforced this in Kerr v Toal & Others [2015] NIQB 83, stating that the issue of impecuniosity should be addressed at the outset of a claim and supported by financial documentation, including:

  • Bank statements (typically three months pre-accident)
  • Proof of income and liabilities
  • Details of essential outgoings

Revisiting Critical Case Law on Impecuniosity

1. McCauley v Brennan & Coulter [2017] NIQB 41

This case is a straighforward but detailed one in Northern Ireland’s credit hire jurisprudence. The plaintiff, a single mother on state benefits, incurred over £36,000 in hire charges over 445 days. The court accepted her impecuniosity and found that she had acted reasonably throughout.

Keegan J observed:

“The facts of this case are extremely significant… The insurers on behalf of the tortfeasors have taken a very long time in apportioning liability… There were systemic problems… which had nothing whatsoever to do with the plaintiff.” (para 39)

She concluded:

“It seems to me to be unsound to shift the burden for the period of hire to the plaintiff and away from the tortfeasor.” (para 41)

This case underscores that where a plaintiff is impecunious and acts reasonably, even lengthy hire periods may be recoverable.

2. Lagden v O’Connor [2004] 1 AC 1067

This House of Lords decision established that an impecunious claimant is entitled to recover the reasonable costs of credit hire, even if those exceed basic hire rates. Lord Nicholls emphasised that:

“Common fairness requires that if an innocent plaintiff cannot afford to pay car hire charges… then the damages payable… should include the reasonable costs of a credit hire company.”

3. Gilheaney v McGovern [2009] NIQB 38

The court held that the plaintiff is prima facie entitled to the rate paid, but the defendant may rebut this by showing that a cheaper, reasonable alternative was available. The court found that a student at a stressful time sitting A-levels could not reasonably be expected to conduct a market search for cheaper hire options.

4. Clarke v McCullough [2013] NICA 50

The Court of Appeal scrutinised an 11-month hire period and found that the plaintiff’s continued use of a superior replacement vehicle, despite no resolution in sight, was excessive. The case highlights the importance of proportionality and ongoing reasonableness.

5. Kelly v Mackle [2009] NIQB 39

The plaintiff, a taxi driver, hired a vehicle at £227/day while earning only £300/week. The court found this to be “economic folly” and reduced the recoverable amount accordingly.

The Role of Basic Hire Rate (BHR) Evidence

In McBride v UK Insurance Ltd & Others [2017] EWCA Civ 144, the English Court of Appeal accepted the use of BHR reports to establish lower market rates. Northern Irish courts, pursuant to this decision and similar decisions such as Clayton v Admiral Insurance are now very open to an evidence-based approach to rate assessment.  Judges in this jurisdiction are now inclined to consider such reports, even those whose rate include the requirement for a Quaestor type insurance excess.

There are of course often many technical objections to the various hire providers and whether the policies they offer are truly comparable however, in line with Mr. Justice Stephens’ decision in SEH&SCT v Capper & Flanagan [2015] NIQB 30, the judges tend to be prepared to disregard overly technical submissions.

A BHR report creates the clear prima facie basis for a defence on rate provided a claimant is not relying on impecuniosity in Northern Ireland.

Strategic Considerations for Insurers when addressing Impecuniosity in Northern Ireland

1. Early Disclosure

Request financial disclosure as soon as a credit hire claim is made. This includes:

  • A clear confirmation on whether impecuniosity is being claimed
  • Supporting financial documents
  • Clarification on the claimant’s efforts to mitigate loss

2. Challenge the Reasonableness of the Hire

Even if impecuniosity is established, the hire must still be reasonable in:

  • Rate: Was the credit hire rate excessive?
  • Duration: Was the hire period unnecessarily prolonged?
  • Provider: Was the hire company selected based on necessity or convenience?

3. Use Robust BHR Evidence

If the claimant is not impecunious—or fails to prove it—defendants can argue for the BHR as seen in our recent case in Letterkenny Ireland. This requires:

  • Evidence from local, reputable hire companies
  • Documentation of availability, pricing, and terms at the time of the accident.
  • Demonstration that the claimant could have accessed these services

Why Choose Lacey Solicitors?

With offices in Belfast and Dublin, and with a client base of both insurers and leading AMCs Lacey Solicitors is uniquely positioned to deal with credit hire claims across both jurisdictions. Our team has extensive experience in:

  • Challenging claims of impecuniosity in Northern Ireland
  • Preparing and presenting robust BHR evidence
  • Advising insurers on cross-border litigation strategy
  • Resolving claims efficiently and cost-effectively

Conclusion on Impecuniosity in Northern Ireland

Impecuniosity is not just a financial question—it’s a legal and evidential one. For insurers, the key to managing credit hire claims lies in:

  • Early engagement with claimants and their solicitors
  • Demanding timely and complete financial disclosure
  • Challenging the reasonableness of the hire in terms of rate, duration, and necessity
  • Using robust BHR evidence to limit liability where appropriate

At Lacey Solicitors, we are committed to delivering strategic, evidence-led defence in credit hire litigation. Contact our Belfast or Dublin office to learn how we can support your claims handling team.

 

Defending Credit Hire Claims: A Step-by-Step Guide for Insurers in Ireland

Posted on by Ruaidhri Austin

 

Credit hire claims – where a claimant hires a replacement vehicle on credit after an accident – remain relatively uncommon in the Republic of Ireland, though they volume of these claims is undoubtedly growing. Insurers in Ireland must be vigilant and prepared. A structured, proactive defence can save costs and minimise exposure. Credit hire cases often involve large daily charges that accumulate quickly, so early intervention is crucial.

Below is a detailed, step-by-step guide to defending credit hire claims in Ireland.

Step 1: Early Identification and Referral

  • Identify potential credit hire claims immediately – at the first notice of loss (FNOL) or during initial discussions with the claimant or their representatives.
  • Refer the case internally to a dedicated credit hire handler or team trained to manage such claims.  Early specialist involvement means the claim is defensively handled from the outset and early identification prevents costs from spiralling if the case ends up in litigation.
  • Request key details without delay:
    • The circumstances of the accident to investigate liabilty quickly.
    • The daily rate of hire and type of vehicle being hired.  This will give some idea of quantum.
    • The initial repair estimate or motor assessor’s report relating to the damage.
  • Obtain a desktop engineering report by forwarding the estimate to an independent engineer.
  • If the engineer recommends inspection, arrange inspection facilities quickly.
  • If no inspection is required, confirm this in writing to bring any ongoing storage costs to an end.
  • If the vehicle is repairable, request updates on:
    • Repair progress.
    • Anticipated delays (e.g. due to the current global parts shortage).
    • Offer assistance sourcing parts, if possible.
  • If the vehicle is a total loss, the plaintiff will typically seek the pre-accident value less any salvage.
    • Raise the payment promptly, ideally by bank transfer, to avoid prolonged hire.

🛠️ Why this matters: Credit hire is a continuing cost. Fast, coordinated action at this early stage helps limit duration and mitigate unnecessary expense.

Step 2: Use of Intervention Letters

  • Copley v Lawn: This is a UK case which confirms the position on letters from insurers offering their own services.  If the case is litigated, Defence practitioners can suggest that in refusing the services, they failed to mitigate their own losses.
  • A valid intervention letter (offering a replacement vehicle) must clearly state the cost to the insurer. If the offer is vague or threatening in tone, it will likely be considered non-compliant, and the claimant cannot be criticised for refusing it.
  • Mitigation of damages: A valid intervention letter allows insurers to argue the claimant had access to a cheaper alternative. Even if rejected, the insurer may only be liable for Basic Hire Rate (BHR)—if they can show what a reasonable alternative would have cost.
  • Timing: Courts are fairly strict and so it is key that the letter is sent at FNOL stage before hire begins.
  • Tone and clarity: The offer must be:
    • Reasonably drafted and ‘copley’ compliant
    • Non-aggressive.
    • Clearly priced.
  • Practical tip: Always issue intervention letters early and retain proof of delivery.  Insurers are now considering new and practical means of delivery such as email, texts and even a bouquet of flowers!

✉️ Well-drafted intervention letters are a practical, court-recognised tool for controlling credit hire exposure from the outset.

Step 3: Challenge the Claimant’s Need

  • The claimant has the burden of proving they required a hire car due to the accident.
  • The insurer can rebut this by showing:
    • Access to another vehicle.
    • Use of a courtesy car from their own insurer.
    • Alternative transport (e.g. public transit) was reasonably available.

🚗 Example: If the claimant had a motor trade policy, they may have had a access to a number of vehicles and insurers should query whether they had another working car they could use, then a credit hire may be deemed unnecessary.

Step 4: Assess the Reasonableness of the Hire

4.1 Duration

  • Was the length of hire proportionate to the repair duration?
  • Were there delays that could have been avoided or reduced?

4.2 Type of Vehicle

  • Was the hire vehicle a ‘like for like’ replacement, based on the size and specification of the original?

4.3 Rates

  • Are the hire charges in line with local market rates?  Insurers often instruct a Basic Hire Rate (BHR) report, which surveys high-street providers for like-for-like vehicles in the area. In one case defended by our office in Letterkenny, Ireland, a BHR report showed that an alternative car was available at about half the cost of the credit hire vehicle
  • Could similar vehicles have been hired at a lower cost?

4.4 Duty to Mitigate

  • Did the claimant take steps to limit their loss?
    • Prompt returning of hire vehicle after repairs.
    • Willingness to consider other a lesser vehicle.

⚖️ Reasonableness is judged case by case—but insurers can often limit exposure by carefully documenting excesses in rate or duration.

Step 5: Explore Specific Defenses

5.1 Impecuniosity

  • If the claimant couldn’t afford to pay upfront without making unreasonable sacrifices, a credit hire is generally accepted.
  • However, this isn’t a complete defense—insurers can still challenge need, rate and duration.

5.2 Illegality

  • If the Plaintiff’s original vehicle did not have a valid NCT certificate, valid insurance or Tax, an argument of illegality can be made.

5.3 Misrepresentation

  • If the hire company misled the claimant (e.g. pretending it was a “free courtesy car”), the agreement may be void or voidable.

5.4 Enforceability

  • Review the terms of the hire agreement carefully.
  • Clauses related to cancellation, payment obligation, and dispute resolution may be grounds for challenge.

Final Thoughts on Credit Hire Claims  in Ireland

A successful credit hire defense rests on:

  • Quick action and early internal referral.
  • Use of valid intervention letters to reduce potential liability.
  • Challenging the necessity, duration, and cost of hire.
  • Exploring legal technicalities of the hire agreement for further leverage.

🧠 Insurers who are proactive—not reactive—control the narrative and reduce exposure.

Training for Insurers

Ruaidhrí Austin, Partner at Lacey Solicitors, regularly delivers training sessions to insurers across Ireland on the evolving legal and procedural landscape of credit hire claims. These sessions are available both in person and online, tailored to claims teams, legal departments, or senior handlers.

If your team would benefit from a practical, up-to-date session on defending credit hire claims, please use the Contact Us section of our website to arrange a training session.

Understanding Credit Hire: A Necessary Service, But It Must Withstand Legal Scrutiny

Posted on by Ruaidhri Austin

After a car accident, one of the first concerns many drivers face is how to stay mobile. Credit hire services step into that gap, offering temporary replacement vehicles without upfront cost. But while this service is vital, credit hire claims after car accidents must also survive legal scrutiny.

At Lacey Solicitors, we understand that after a road traffic accident, access to a temporary replacement vehicle is often critical. Credit hire serves a legitimate need, particularly for innocent drivers who cannot afford to pay for a hire vehicle upfront. But for insurers, while the system is necessary, it must also be proportionate, evidence-based, and compliant with established legal principles.

Credit hire claims are often complex and legally contentious. Those in the trenches of credit hire litigation will often see the same core disputes surface time and time again. While each case depends on its own facts, several key issues consistently arise. These include:

  • Need for hire
  • Enforceability of the credit hire agreement
  • Rate of hire
  • Impecuniosity of the plaintiff
  • Duration of hire
  • General mitigation of loss

While future articles will explore enforceability of hire agreements and general mitigation arguments in more depth, this article focuses on the four most frequently contested aspects of credit hire claims: need, duration, rate, and impecuniosity.

What is Credit Hire?

Credit hire involves the provision of a like-for-like replacement vehicle by an accident management company to a non-fault driver. The cost is not paid upfront by the driver but is instead recovered from the at-fault party’s insurer.

This model has been recognised judicially as fulfilling a real societal need. In Dimond v Lovell [2000] 2 All ER 897, Lord Nicholls described credit hire as meeting a “real need” and Lord Hobhouse acknowledged its “understandable popularity.” However, their Lordships also warned that such claims must be justified under the principles of mitigation and reasonableness.

Key Legal Issues for Credit Hire Claims After Car Accidents

 

1. Need

A claimant must show a genuine need for a replacement vehicle. This is often the first and most fundamental issue considered in credit hire litigation.

Courts will evaluate whether:

  • The claimant required a vehicle at all during the hire period
  • The vehicle hired was appropriate for their circumstances
  • Reasonable alternatives, such as public transport or a household vehicle, were available

Evidence such as daily mileage, access to other vehicles, work-related travel, family commitments, and geographical access to transport services is often decisive. If the need is not clearly established, the entire hire claim can collapse.

2. Duration

Even if need is proven, the length of the hire must be reasonable and justifiable.

Arguably, delays in repairs, inspections, acceptance of a pre-accident value (PAV) offer and ‘off hiring’ can undermine a claim—especially where those delays are attributable to the claimant or their representatives. The principle of mitigation of loss, as highlighted in Giles v Thompson [1994] 1 AC 142, remains crucial: claimants must take reasonable steps to keep their losses to a minimum.

If unnecessary delays occur, insurers will quite rightly look to dispute part or all of the hire duration.

3. Rate

In credit hire cases, one of the key issues often contested is the hire rate claimed. Courts generally award basic hire rates (BHR) unless the claimant can demonstrate impecuniosity—meaning they could not afford to pay for the vehicle hire upfront—in which case full credit hire rates may be allowed.

However, if the defendant does not provide evidence of BHR, courts may by default award credit hire rates even if impecuniosity is not proven. This places an important evidential burden on defendants to produce credible BHR evidence to challenge higher credit hire charges. Without such evidence, the court has limited means to assess whether the credit hire rates claimed are reasonable compared to market rates.

When courts do consider BHR, they look for the lowest reasonable rates available from mainstream or reputable local suppliers in the claimant’s geographical area. The assessment is fact-sensitive and courts generally avoid overly technical disputes about exact pricing, focusing instead on a reasonable approximation of market rates as seen in Stevens v Equity Syndicate Management Ltd [2015] EWCA Civ 93. Additionally, if credit hire agreements include extras such as “nil excess” cover that basic hire rates do not provide or provide inadequately, the court may treat these costs separately and allow appropriate adjustments. Overall, rate challenges aim to ensure claims reflect fair market costs rather than inflated charges, balancing the claimant’s legitimate needs against the defendant’s right to avoid overpayment.

Claimants are generally only entitled to recover the Basic Hire Rate (BHR) unless they can establish ‘impecuniosity.’

4. Impecuniosity

Impecuniosity, a pivotal issue in credit hire claims, refers to a claimant’s inability to afford upfront car hire charges following an accident. It forms part of the broader duty to mitigate losses—a principle that claimants must act reasonably to limit financial damage. Courts have established that where a claimant cannot afford to hire a vehicle without making unreasonable sacrifices, credit hire charges may be recoverable.

As outlined in South Eastern Health and Social Care Trust v Flannagan and Capper Trading Ltd [2015] NIQB 30, Horner J explained:

“An individual who is not penniless can still be impecunious, because as a question of priorities he is unable to pay car hire charges without making sacrifices he could not reasonably be expected to make.”

Key case law, including Lagden v O’Connor and Zurich Insurance Plc v Umerji, illustrates that impecuniosity not only impacts the rate of hire but also the duration. The burden initially lies with the claimant to prove their financial position, and once sufficient evidence is provided, the evidential burden shifts to the defendant.

The assessment of hire charges and duration differs based on whether the claimant is impecunious. If so, they may claim the full credit hire rate and extend the hire period until the defendant provides compensation for repairs or vehicle replacement. For pecunious claimants, courts consider what is reasonable under the circumstances, such as waiting for an engineer’s report or the defendant’s inspection. In cases where repairs or replacements are delayed without justification, courts assess the claimant’s efforts to mitigate losses. Ultimately, reasonable conduct, timely communication, and evidence of financial status are central to determining recoverable credit hire damages.

Courts expect robust documentary evidence—bank statements, income proof, credit history, and essential outgoings—to support any claim of impecuniosity. Vague assertions or anecdotal claims won’t meet the required threshold.

Real-World Case: High Charges, But Still Recoverable?

A recent example reported by the BBC involved a nurse who was charged £50,000 for hiring a Tesla Model 3 for over three months. While the judge acknowledged that the hire costs were three times higher than standard and the hire period 75 days longer than necessary, he still ruled that the insurer was liable for the full amount.

The reasoning was based on the fact that the claimant followed her employer’s fleet management advice and acted in good faith. While the result may appear controversial, it highlights how the factual context and procedural conduct of the parties can significantly influence judicial outcomes—even where rate and duration are contentious.

Industry Improvements for Credit Hire Claims After Car Accidents

Not all credit hire claims are problematic. In fact, recent industry data suggests that:

  • Average hire durations are decreasing
  • Legal costs associated with credit hire have dropped by nearly 50% since 2023

This reflects greater cooperation between insurers, defendant law firms, and accident management companies. However, careful legal oversight remains essential.

Conclusion: Necessary Service, But Not a Carte Blanche

Credit hire is necessary and beneficial—but it must be fair, reasonable, and subject to evidential and legal discipline. Defence solicitors and insurers have a duty to:

  • Insist on proper proof of rate, need, and duration
  • Demand full impecuniosity disclosure where higher-than-market rates are claimed
  • Resist excessive or unjustified claims, while still acting proportionately and fairly

At Lacey Solicitors, we are uniquely positioned to assist clients—whether insurers, fleet managers, or individuals—with the nuances of credit hire claims after car accidents. With a deep understanding of both claimant and defence perspectives, we provide balanced, evidence-based legal strategies in this ever-evolving area of personal injury law.

📞 Need advice or representation in a credit hire dispute? Contact Lacey Solicitors today.

Defending Low Velocity Impact (LVI) Claims: A Strategic Approach for Insurers in Ireland

Posted on by Ruaidhri Austin

Introduction

Low Velocity Impact (LVI) claims, despite involving seemingly minor collisions, often escalate into contentious legal disputes over causation—posing a persistent challenge for insurers and defence solicitors across Ireland. These cases typically arise from road traffic accidents with little or no visible vehicle damage, yet claimants frequently allege soft tissue injuries, particularly of the whiplash variety.

For claimants, securing fair compensation for real injuries is a legal and moral right and Lacey Solicitors entirely supports that right. But for insurers and defence solicitors, there is an equally important duty: to thoroughly investigate claims, ensure that policyholders are protected, and guard against exaggerated or unfounded claims.

The central legal issue is not whether a collision occurred, but whether it was capable of causing the injuries claimed. Defending such cases successfully requires a disciplined strategy based on early factual investigation, expert scientific input, and a deep understanding of biomechanics and legal precedent.

What Is a Low Velocity Impact Claim?

An LVI claim is defined by a collision where damage to the vehicles is minimal or negligible. The defendant typically accepts that the incident occurred but challenges whether the forces involved were sufficient to cause the alleged injuries.

Commonly, these cases involve complaints of neck, back, or shoulder pain and arise from rear-end “shunt” type impacts. The defence position is that the physical forces involved were too low to displace vehicle occupants enough to cause injury.

This is not a denial of the accident or the injury, but rather a focused challenge on the issue of causation, supported by biomechanical, medical, and engineering evidence.  Causation is a matter of expert analysis and is not assumed simply from the occurrence of a collision.

The Role of the Insured’s Statement

A robust defence for insurers begins with a comprehensive and accurate statement from the insured party. Their first-hand account helps establish key facts such as:

  • Vehicle speeds

  • Braking and road conditions

  • Location and point of impact

  • Perceived severity of the collision

This account forms the basis for subsequent engineering analysis and may become critical evidence in litigation.

Importantly, insurers must remember that minimal damage does not always equate to minimal force. Past cases have demonstrated that superficial damage can mask significant force transfer, making early factual accuracy crucial.

The Tow Bar Factor: Misleadingly Minor Damage

Tow bars present a unique issue in LVI claims. When a vehicle is struck directly on a tow bar, the damage to the vehicle may be minor—but the energy transfer can be substantial.

Unlike modern bumpers, which are designed to absorb and dissipate collision energy, tow bars transmit the force directly into the chassis. This can bypass energy absorption mechanisms and lead to greater force being transferred to vehicle occupants.

As a result, even seemingly trivial accidents involving tow bars should be investigated with care. Where injury is alleged despite limited visible damage, engineering evidence is essential to assess whether the impact forces were, in fact, substantial.

Biomechanics and the Delta V Threshold

At the heart of scientific analysis in LVI cases lies the concept of Delta V—the change in velocity a vehicle undergoes during impact. This metric helps quantify the potential for injury.

Studies, including those by the International Research Committee on the Biomechanics of Impact (IRCOBI) and GBB (UK) Ltd, have established key thresholds:

  • Below 3 mph Delta V: Occupant movement is comparable to routine activities like sitting down or walking; injury is highly unlikely.

  • Between 3–5 mph: Injury is possible, though not presumed.

  • Above 5 mph: Increased likelihood of soft tissue injury.

However, injury potential also depends on multiple variables, including:

  • Seat design

  • Vehicle construction

  • Occupant awareness and bracing

  • Age, gender, and pre-existing conditions

  • Occupant posture at the time of impact

These findings support the defence argument that not all impacts, even if acknowledged, have the biomechanical potential to cause the injuries alleged.

Medical Evidence and Engineering Reports

Claimants often produce medical reports confirming injury. Yet many such reports rely heavily on the claimant’s own account and do not critically assess whether the incident mechanics support the diagnosis.

For a credible defence, insurers should instruct medical experts with experience in:

  • Musculoskeletal injury diagnosis

  • Biomechanical injury thresholds

  • Evaluating causation based on incident specifics

Similarly, engineering experts should assess vehicle damage, calculate Delta V, and determine the likelihood of occupant displacement. When medical and engineering expertise are integrated early, they form a powerful evidentiary foundation to challenge causation effectively.

Witness Testimony and Its Legal Impact

Independent witness statements can influence a court’s perception of impact severity. For example, a witness who describes hearing a loud “bang” may bolster the claimant’s version of events.

However, aural impressions do not always correlate with force transmission. A loud sound may result from materials striking or crumpling but may not reflect biomechanical force levels.

Defence teams should:

  • Interview witnesses early

  • Assess the witness’s vantage point and line of sight

  • Evaluate their ability to accurately perceive impact force

The aim is to determine whether the witness is truly independent and whether their testimony aligns with the physical evidence.

Lacey Solicitors Insurance Lawyers Recommendations

A proactive, evidence-based approach is key to defending LVI claims. Insurers are advised to:

  • Obtain prompt, detailed statements from the insured party.

  • Investigate vehicle damage thoroughly, paying close attention to structural components such as tow bars.

  • Instruct experienced medical and biomechanical experts early to assess the causation of injuries.

  • Critically evaluate all witness testimony for accuracy, relevance, and independence.

  • Integrate factual, engineering, and medical evidence into a coherent and persuasive defence strategy.

Conclusion

Low Velocity Impact claims remain a legally and scientifically complex area of personal injury litigation, especially where physical damage is minimal. Each case turns on its unique facts, but insurers can defend these claims effectively by focusing on early investigation, rigorous expert analysis, and strategic coordination.

In our insurance defence practice across Belfast and Dublin, we support insurers in navigating the technical and legal challenges of LVI claims. By leveraging biomechanical science alongside targeted litigation strategies, we deliver results that protect our insurance client’s and their policyholders and uphold the integrity of the insurance system.

Need Support on a Suspected Low Velocity Impact Claim?

If you’re handling a suspicious or exaggerated LVI claim, our team can help. We provide:

  • Tactical guidance

  • Expert coordination

  • Litigation strategy

  • Comprehensive defence reports

We serve insurers throughout the entire island of Ireland, delivering robust, evidence-driven defences to minimise risk and exposure.

Contact our Insurance Defence Team today using our online contact portal for tailored support.

New E-Scooter and E-Bike Regulations in Ireland: Safety, Rules, and Legal Updates for 2025

Posted on by Ruaidhri Austin

On 10th March 2025, The Irish Times reported on an incident where a jogger suffered a broken leg after an alleged collision with an e-bike on the footpath. This raises significant concerns for users of e-bikes and e-scooters in Ireland, particularly regarding liability under civil and criminal law. A key issue is whether the e-bike involved — described as an ENGWE EP-2 Pro Folding e-bike — qualifies as a mechanically propelled vehicle (MPV), as per the Road Traffic and Transport Act 2023, which introduced the concept of a “powered personal transporter” (PPT). The legal clarity surrounding such vehicles continues to develop, especially with the introduction of new regulations that prioritise the safety of both the user and the public.

The Road Traffic and Transport Act 2023: Key Legal Updates for E-Scooters and E-Bikes in Ireland

The Road Traffic and Transport Act 2023 has officially introduced new regulations for e-scooters and e-bikes in Ireland. These regulations aim to ensure the safety of not just e-scooter and e-bike riders, but also pedestrians, cyclists, and other road users. The new framework categorises e-scooters and e-bikes under Personal Powered Transporters (PPTs), with specific technical and usage parameters.

Key New Regulations for E-Scooters in Ireland:

  • E-scooters with a maximum power output of 400 W, a maximum speed of 20 km/h, and a weight of 25 kg are now legal for use on public roads. However, any e-scooter exceeding these parameters will remain illegal.

  • Age restrictions: E-scooter users must be 16 years or older to ensure safety for both riders and the public. Riders are allowed to use their e-scooters in cycle lanes and bus lanes, but not on footpaths or in pedestrianised zones.

  • Usage Requirements: Users must not carry passengers or goods, follow speed limits, and avoid using mobile phones while riding. Additionally, e-scooters must be fitted with necessary safety features, including front and rear lights, reflectors, brakes, and a bell.

 

New E-Bike Regulations in Ireland:

  • E-bikes with a maximum power output of 250 W, a motor that cuts off once pedalling stops, and a maximum speed of 25 km/h will be classified as bicycles under Irish law. E-bike riders will have the same rights as cyclists, including the ability to use cycle lanes and bus lanes, but they are not permitted to use footpaths.

  • For e-mopeds, which are more powerful than e-bikes, additional regulations apply due to their higher speed potential:

    • E-mopeds with a maximum speed of 25 km/h and a power output of 1000 W will be classified as L1e-A e-mopeds, requiring helmet use, and will be permitted to use cycle lanes and bus lanes.
    • E-mopeds with a maximum speed of 45 km/h and a power output of 4000 W (L1e-B e-mopeds) will require vehicle registration, an AM driver’s licence, and insurance for throttle-powered versions. These e-mopeds will be prohibited from using cycle lanes, bus lanes, footpaths, and pedestrianised zones.

 

The Irish vs. UK Approach to E-Scooter Regulations

 

Until recently, e-scooter usage in Ireland was in a legal grey area. Operators were unsure whether their e-scooters could be legally used on public roads and whether they required a driving licence, insurance, or NCT. The situation was clearer in the UK, where private e-scooters were generally illegal on public roads due to requirements for driving licences, insurance, and vehicle registration under the Road Traffic Act 1988.

In Ireland, the introduction of the Road Traffic and Roads Act 2023 created a new category for Personal Powered Transporters (PPTs), offering clarity. The Road Traffic (Electric Scooters) Regulations 2024 confirmed that e-scooters are classified as PPTs, with rules governing their safe use on public roads. Notably, users must be 16 years or older to operate e-scooters, and the regulations will be enforceable by An Garda Síochána.

Recent Developments and Public Safety Initiatives

From 20 May 2025, the regulations will take effect, providing clear technical and usage specifications for e-scooter and e-bike users. These changes include guidelines that outline how e-scooters and e-bikes can be legally and safely used in public spaces, enhancing safety for pedestrians, other road users, and cyclists. Furthermore, a public information campaign will help educate the public on the new regulations and safety practices.

The National Transport Authority has also restricted the carriage of e-scooters on public transport, citing concerns about lithium-ion batteries and quality control. This restriction will apply to buses, trains, and other modes of transport starting October 2024.

Safety Concerns and the Need for Ongoing Regulation

 

While the new regulations bring much-needed clarity, the safety of e-scooter riders and the general public remains a priority. Recent reports indicate an increase in serious accidents involving e-scooters and e-bikes, particularly fatal injuries among minors. The absence of a minimum age requirement for some vehicles and the lack of an insurance requirement have raised concerns. Continued oversight and ongoing legislative adjustments will be crucial as e-scooter and e-bike usage continues to rise across the country.

Conclusion

 

The introduction of the Road Traffic and Roads Act 2023 represents a major step forward in regulating e-scooters and e-bikes in Ireland. With the new regulations set to come into effect by 20 May 2025, Ireland is taking a proactive approach to ensure the safe integration of these vehicles into the country’s evolving transport landscape. By balancing the needs of e-scooter and e-bike riders with the safety of other road users, these regulations offer a promising framework for Ireland’s future mobility. However, as with all new technologies, further regulation may be necessary to address emerging challenges and ensure the safety and rights of everyone on the road.

How Social Media Evidence Impacts Personal Injury Cases in Northern Ireland and the Republic of Ireland

Posted on by Ruaidhri Austin

 

Social media has become an integral part of modern life, with platforms such as Facebook and Instagram now used by around 70% of the population. This widespread usage carries significant implications for personal injury cases in Northern Ireland and the Republic of Ireland, where social media evidence is increasingly utilised in legal proceedings.

 

The Growing Importance of Social Media Evidence

 

Platforms like Facebook, Twitter, Instagram, Strava, and TikTok offer a wealth of information that can play a crucial role in personal injury cases. Posts, photos, videos, and comments are often examined to assess the credibility of a claimant’s allegations regarding their injuries and the impact on their lifestyle. Companies such as Netwatch are commonly engaged to scrutinise a claimant’s social media presence for evidence that might suggest their injuries have been exaggerated or fabricated. For instance, a claimant who asserts they have severe physical limitations might undermine their case by posting images or videos of themselves participating in activities that contradict their claims.

Solicitors have a duty to take positive steps to ensure that their clients appreciate at an early stage of the litigation the duties of Disclosure and Discovery.   Solicitors must also advise their clients not to destroy “documents” which might possibly have to be disclosed.  This duty extends to social media posts.

 

Admissibility of Social Media Evidence in Northern Ireland

 

In Northern Ireland, any party involved in an action must disclose to the other party any documents “which are or have been in their possession, custody, or power relating to matters in question in the case or matter.”

The test for discovery is set out in the Supreme Court Practice (1999 Volume 1 at 24/2/11), which is as follows:

“Not limited to documents which should be admissible in evidence nor to those which would prove or disprove any matter in question: any documents which, it is reasonable to suppose, contain information that may enable the party (applying for discovery) either to advance their own case or to damage that of their adversary, if it is a document that may reasonably lead to an inquiry which may have either of those two consequences, must be disclosed.”

A claim that documents are confidential does not, in itself, exclude them from the obligation of disclosure. The fact that material available on a publicly-accessible part of a social media account can be used as evidence seems uncontroversial.

As Lord Goff noted in Attorney General v Guardian Newspapers (No 2) [1990] AC 109 at 282:

“Once (information) has entered what is called the public domain, then as a general rule, the principle of confidentiality can have no application to it.”

Order 24, Rule 9 of the Rules of the Supreme Court (NI) 1980, which concerns an application for discovery of documents, states:

“On the hearing of an application for an order under rule 3, 7 and 8, the court, if satisfied that discovery is not necessary, or not necessary at that stage of the case or matter, may dismiss or, as the case may be, adjourn the application and shall in any case refuse to make an order if it is of the opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs.”

There is no doubt that documents, if relevant—such as social media posts—are discoverable. Prima facie, they constitute information that is entitled to be used.

This was evidenced in the Northern Irish case of Martin and ors Gabriele v Giambrone P/A Giambrone & Law [2013] NIQB 48, where it was held that privacy settings on a Facebook post did not affect the admissibility of evidence and the evidence was admitted.

 

Challenges with Privacy Settings

 

The issue of privacy settings on social media accounts has not been extensively addressed by Irish courts. However, in Martin v Giambrone, it was noted that users share information on platforms like Facebook at their own risk, as there is no guarantee that posts intended for friends will remain private. Hordner J, in his judgment, stated:

“Anyone who uses Facebook does so at their peril. There is no guarantee that any comments posted to be viewed by friends will only be seen by those friends. Furthermore, it is difficult to see how information can remain confidential if a Facebook user shares it with all their friends and yet no control is placed on the further dissemination of that information by those friends. No evidence was provided as to how many friends the defendant had and what their relationship was with each of them. It was certainly not suggested that those friends were restricted in any way as to how they used any information given to them by the defendant. To avoid any confusion, I do not consider that any of the friends viewing that information would necessarily have concluded that the information was confidential and could not be disclosed. I have received no evidence as to why those friends were restricted in how they can use information received from the defendant and why they would have known this information was confidential or private.”

In the United States, courts have deliberated the balance between the probative value of social media evidence and privacy rights. For example, in Spoljaric v Savarese (2020), the court allowed the discovery of social media material related to physical activities but rejected requests for Fitbit and dating website data due to privacy concerns.

 

Case Dismissals Due to Social Media Evidence

 

Social media evidence has led to the dismissal of claims in some cases. We wrote previously about Fraud in Personal Injury cases in Ireland citing the case of Danagher v Glantine Inns [2010] IEHC 214, the plaintiff’s claim of severe injuries was undermined by their Facebook activity, which included playing sports and participating in a parachute event. Similarly, in Gervin v MIB [2017] IEHC 286, the plaintiff’s claim of being unable to attend the gym was contradicted by her Facebook posts.

“Her Facebook page was put to her in cross-examination, and I am satisfied from the entries, which she admitted had been posted by her, that she had returned to the gym by 2013 at least. Her suggestion that the evidence had been obtained in breach of her privacy settings is not credible, as at the relevant time, she did not have a privacy restriction on her Facebook account.”

Conclusion

 

Social media evidence plays a pivotal role in personal injury cases, offering insights into a claimant’s lifestyle and the veracity of their claims. Both claimants and insurers must navigate this digital landscape with caution, keeping in mind the potential legal consequences. As technology continues to evolve, the role of social media in legal proceedings is expected to grow, making it a crucial factor in personal injury litigation, along with the inevitable issues concerning admissibility, privacy, and authenticity.

Understanding Diminution in Car Accident Claims: Restitution Ad Integrum & Insights from Payton v. Brooks

Posted on by Ruaidhri Austin

Diminution in Car Accident Claims: A Guide to Restitution Ad Integrum and the Payton v. Brooks Case

 

For motor insurers and Plaintiff’s alike, diminution in value of a motor vehicle following a road traffic collision is a constant issue.  When a car is involved in an accident, it may suffer both physical damage and a reduction in its value. This can lead to disagreement over how much compensation should be paid. The key principle that arises in such cases is restitution ad integrum, a Latin phrase that refers to restoring the Plaintiff to their original position before the damage occurred.

 

Understanding Diminution in Value

 

Diminution in value is the reduction in a vehicle’s market value after an accident, even if the car is repaired to its pre-accident condition. This can be particularly significant when a vehicle, once repaired, is worth less than it was before the accident due to its accident history. The Diminution will occur at the time the accident damage but often one won’t feel the loss until the vehicle is sold.  How can one properly assess and compensate for this supposed decrease in value that wouldn’t be felt until the vehicle is sold?  While the damage might be physically repaired to a high standard, the vehicle’s resale value may never fully recover.

 

Restitution Ad Integrum and its Application in Car Accident Claims

 

The principle of restitution ad integrum is central to car accident claims, particularly in cases involving diminution in value. The phrase translates to “restoration to the original condition,” meaning that the goal is to return the injured party to the position they were in before the damage, as much as possible. In the context of car accidents, this could involve either repairing the vehicle or compensating the owner for the loss in market value due to the accident.

However, achieving restitution ad integrum is not always an exact science. The principle assumes that the car’s pre-accident condition can be restored or compensated for. But in reality, various factors complicate this ideal. A key example can be found in older vehicles or those with high mileage.

 

Case Law: Payton v. Brooks (1974) and Coles v Heatherton (2013)

 

Payton –v– Brooks (1974) was heard in the Court of Appeal, and it set out that a claim can be brought for Diminution due to the need for a vehicle to have repair work done after an accident.

The logic being that if the overall cost of the vehicle repairs does not cover the financial loss to the owner, there is no reason why the owner should be denied additional compensation under that head of damage.

On a similar note, Coles –v– Hetherton (2013) recognised that financial loss to a vehicle owner is realised upon damage to the vehicle. This loss is not just from the cost of the repairs, it is Diminution.

Covering the price of repairs to reinstate the vehicle to its original condition is merely a contribution towards the Diminution. The Courts could award a sum of compensation exceeding the cost of the vehicle repairs if it deemed to be justified.

However, it also established that each case should be assessed individually, considering various factors such as the car’s age, mileage, and condition before the accident.

 

A Case-by-Case Assessment of Restitution Ad Integrum

 

Insurers have seen an increase in the number of Diminution claims in NI and ROI.  Many Plaintiffs would argue that it is ‘inevitable’ that the value of a vehicle would depreciate because of a road traffic accident.  Insurers and Defendant Lawyers will often be referred to a standard 5%-20% deduction as a result of a road traffic collision.  In ROI a figure is often quoted of 10% of the total cost of repairs.

For Insurers, it’s important to note that the process of determining diminution in value is case-specific. The assessment of restitution ad integrum is not a one-size-fits-all solution.   Insurers must evaluate each situation individually to ensure that the Plaintiff is properly compensated and not over-compensated.

Our office was recently instructed by one of our Irish Insurers to advise on a depreciation claim where their in-house assessors opined that the value of the damaged vehicle would not be affected due to minimal damage and the fact that all parts fitted were bolt on.  They advised that Depreciation would usually only be considered when structural or semi structural repairs are being carried out and the file was passed to us to defend the proceedings once issued.

This was, we politely suggested, not quite the correct approach and we took immediate steps to advise on a fair settlement of the case to avoid any ensuing legal costs.

Justin McCauley of Emerald Automotive Assessors is a qualified Motor Engineer having achieved his qualifications from the IAEA and IMI  and has worked in the insurance industry for 16 years.

We approached him for the purpose of this article and he had this to say;

“An often quoted argument is that “if two vehicles have similar mileage, age, model, make etc and are otherwise identical save that one was involved in a road traffic collision, any potential buyer would opt for the one without the adverse history.  Notwithstanding that high quality repairs were carried out.”

This is not strictly true.  

Of course, now more than ever the used car market is highly competitive, where buyers are often hesitant to purchase a car with a history of accidents, even if fully repaired, leading to a larger price difference between pre-accident and post-repair values. 

There is undoubtedly an increase in depreciation claims where many modern vehicles have sophisticated technology, and so Plaintiffs will argue that even minor accidents can sometimes require extensive repairs, impacting the perceived value of the car. 

A number of factors however can have an impact on the amount that a vehicle will have been reduced by.  

      • type of vehicle,
      • its age,
      • mileage,
      • who repaired it and did they adhere to manufacturer methods
      • has repairs invalidated the vehicle’s warranty
      • What was the quality of repairs post repair 
      • pre-accident condition,
      • the severity of damage sustained or
      • any other special attributes and qualities

There is no one size fits all.  This growing trend of 10% of the repair costs is incorrect.  Similarly, it is incorrect to say that it is always 2.5% -15%.  It is incorrect to say that a vehicle over four years old will not qualify.  It is fact specific and input from a qualified Motor Assessor is key.”

 

Conclusion: The Need for Expert Advice

 

Insurers should understand that the application of restitution ad integrum in car accident claims is not straightforward and varies based on the specifics of the case. Undoubtedly, as demonstrated in Payton v. Brooks, a Plaintiff should be compensated for any diminution in the value of their vehicle due to an accident, but the existence and extent of diminution is not straightforward.

To navigate these complex issues, it is vital to appoint a suitably qualified motor assessor to assess any diminution claim.

The motor assessor can consider the condition of the vehicle and the extent of the damage having regard to all the necessary factors.  By understanding the intricacies of the law and the unique circumstances of the case, insurers can properly assess any claim for diminution and ensure fair settlement as early as possible.

 

Case Study – Excessive Credit Hire Rates halved in Ireland with Basic Hire Rate Reports.

Posted on by Ruaidhri Austin

Recent Success in Challenging Excessive Credit Hire Rates in Ireland

 

Last month, our firm reported recent success with a  successful outcome at Letterkenny Courthouse, where the Court agreed with our arguments that the rate charged by a Credit Hire Organisation was excessive. We’re pleased to share another win for our Irish insurers in contesting inflated credit hire charges.

 

Case Summary

 

The Claimant was involved in a road traffic accident with the Defendant, and liability was accepted by the Defendant’s insurer. After the accident, the Claimant entered into a credit hire agreement with an Accident Management Company (AMC), which provided a replacement vehicle on a credit hire basis. The Claimant’s original vehicle was written off, and payment was made by our instructing insurers for the pre-accident value (PAV) of the vehicle.

Once the PAV had been settled, the credit hire period ended, and the Claimant’s representatives submitted an invoice to our instructing insurer for payment. The total amount claimed for the hire of the replacement vehicle over 76 days was £26,343.46 (STG). The Credit Hire Organisation later offered to accept £20,000 (STG) to settle the matter, and avoid Circuit Court costs in Dublin.

 

Initial Assessment by Lacey Solicitors 

 

Our instructing insurers sought a preliminary opinion from Ruaidhrí Austin, Partner at Lacey Solicitors, given his dual qualifications and extensive experience in both Northern Ireland and the Republic of Ireland in handling credit hire claims. They specifically asked whether the reduced figure of £20,000 should be accepted and had two primary concerns:

  1. Mitigation of Losses: Could it be argued that the Claimant failed to mitigate their losses by not using their comprehensive insurance policy? Under  34(2)(b) of the Civil Liability Act 1961. Claimants in Ireland have a statutory duty to mitigate their losses. While this argument is common in credit hire cases, we advised that at this early stage of the proceedings, it would be best to focus on other arguments.
  2. Reasonableness of the Hire Rate: Was the daily rate charged for a replacement Range Rover reasonable? Given the specifics of the case, the hire period was appropriate, and the replacement vehicle was ‘like for like’. However, the insurer rightly questioned the reasonableness of the hire rate which seemed excessive.

 

Challenging the Credit Hire Rate

 

We outlined that the burden of proof lies in these cases lies with the Defendant to demonstrate that there was a more reasonable rate available.   Prima facie, the Plaintiff is entitled to the rate claimed.  It is for the Defendant to demonstrate a suitable alternative rate.  To support this, our office commissioned a Basic Hire Rate (BHR) report from ‘BHR Assist’ to challenge the excessive charges.

The BHR report revealed that a comparable replacement vehicle could have been hired from a car hire company located just 10 miles from the Claimant’s home for a total of £10,876.55, a significant difference from the £26,343.46 claimed.

 

Settlement and Conclusion

 

We advised that our instructing insurers should offer £12,500.00 (STG) in settlement, which included the £10,876.55 for hire, plus additional costs for storage and recovery. The insurers successfully negotiated a settlement at this amount, avoiding formal court proceedings and saving substantial legal costs in the process.

 

Key Takeaways

 

  • While credit hire claims are relatively rare in the Republic of Ireland, they are becoming more frequent.
  • Claims handlers should aim to quickly recognise cases where Credit Hire is ongoing and take steps to ensure that repairs are authorised or payments raised in a timely fashion to avoid any significant delays.
  • When the daily hire rate appears excessive, it’s essential to challenge the charges with Basic Hire Rate evidence, as long as the Claimant is not relying on impecuniosity.

 

At Lacey Solicitors, we specialise in navigating the complexities of insurance law across both jurisdictions. Our team of experienced professionals is dedicated to providing clear, effective legal advice and representation to our insurance clients. Whether you’re dealing with credit hire claims, liability disputes, or policy interpretation, we understand the intricacies of insurance law and work tirelessly to achieve cost effective outcomes quickly. With a reputation for excellence and a deep understanding of the industry, our firm is committed to delivering trusted, reliable legal solutions in the ever-evolving world of insurance in Ireland.

Court of Appeal Ruling: Claim for Credit Hire Can Proceed Despite Expired MOT

Posted on by Ruaidhri Austin

In the case of Ali v HSF Logistics Polska SP. Zo.o [2024] EWCA Civ 1479, the Court of Appeal delivered a crucial judgment that has wide implications for claims involving credit hire costs, particularly when the Plaintiff’s vehicle did not have a valid MOT certificate at the time of the accident.

This case addresses the legal complexities around the principle of mitigation and whether the failure to renew an MOT certificate should prevent a Plaintiff from recovering credit hire charges.

 

MOT delays in Northern Ireland

 

MOT delays were already prevalent in NI prior to the COVID-19 pandemic.  In 2020 BBC NI highlighted that faults had been found on 48 out of 55 lifts and that MOT tests were due to be cancelled.

This, coupled with an increasing population, a higher proportion of households with access to a vehicle as well as older vehicles on the road all has resulted in significant delays in MOT testing in NI. Infrastructure Minister for NI Mr John O’Dowd in 2024 outlined an increasingly high demand for MOT tests and confirmed that 1.1 million tests had been carried out in 2023/24.  The highest numbers ever recorded.

 

MOT, Credit Hire and the position in Northern Ireland.

 

Insurers in Northern Ireland are therefore well used to these cases where the Plaintiff’s vehicle did not have a valid MOT at the time of the collision but the Plaintiff sought to recover Credit Hire charges.  Morgan v Bryson Recycling Limited and Magill v Donnelly are two cases that come to mind.

Ultimately up until Ali it was held that a court should take a broad view of the circumstances of each case and conduct a case specific inquiry in each case.  For example, a case where the MOT expired a number of years before the accident would be treated differently that a case where the MOT Certificate expired days before the accident.

 

Case Background: The Dispute Over Credit Hire Costs

 

Majid Ali’s vehicle was parked when it was hit by the Defendant’s vehicle.  The Plaintiff, sought to recover over £21,500 from a UK insurer – acting as claims handler for a Polish insurer.

The Plaintiff’s vehicle however did not have a valid MOT certificate at the time of the accident and the certificate had expired four and a half months earlier.

This raised the question of whether the Plaintiff was legally entitled to recover the hire costs, given that his vehicle was not roadworthy.

The usual battlegrounds for Credit Hire cases were, most helpfully, agreed by the Plaintiff and Defendant;

  • The Plaintiff needed to hire a vehicle.
  • The length of hire was reasonable.
  • The type of car hired was reasonable.
  • The Plaintiff was not impecunious.
  • The Defendant did not provide any alternative rate evidence

Furthermore, it was not in dispute that the MOT had expired four and a half months before the road traffic accident nor was there any evidence or suggestion that the Plaintiff intended to obtain a new MOT certificate.

At the County Court level, the Plaintiff’s claim for the hire costs was dismissed on the basis of causation.   That is to say, Majid Ali could not establish that the road traffic accident had, as a matter of law, caused any loss because he had lost the ability to drive a non-roadworthy vehicle only, which he was not legally permitted to use on the road.

The decision was upheld by the High Court and Ali appealed to the Court of Appeal.

The key issue on appeal was whether the lower courts were correct in dismissing the claim for credit hire costs on the grounds of legal causation and the failure to mitigate loss, considering the vehicle could not have been legally driven due to the expired MOT.

 

The Court of Appeal’s Judgment

 

The Court of Appeal revisited and applied earlier case law, notably Hewison v Meridian Shipping [2002] EWCA Civ 1821, and concluded that the minor criminal offence of failing to maintain an MOT certificate should not bar the claimant from recovering credit hire charges.

He disagreed with the Defendant’s submissions that the Plaintiff had suffered no “loss” as a result of the accident.  He relied on Beechwood Birmingham Ltd v Hoyer Group UK Ltd [2010] EWCA Civ 647 is asserting that;

A claimant’s loss is the lack of advantage and inconvenience caused by not having the use of a car ready at hand and at all hours for personal and/or family use.  [The accident] causes the claimant to be deprived of the use of an item of property, which causes inconvenience in the form of inability to use it for private transport. The fact that a claimant does not have a valid MOT certificate for the car does not alter the fact that they have been deprived of its use or the fact that this deprivation would have caused inconvenience but for the hiring.

The absence of a valid MOT certificate was irrelevant to the fact that the Plaintiff was deprived of his vehicle and required a replacement.

Lord Justice Stuart-Smith acknowledged that driving without an MOT certificate is a criminal offence, punishable by a fine of up to £1,000. However, he classified this as a relatively minor infraction, which should not bar recovery of credit hire costs. He noted that the court’s role was to address the direct consequences of the defendant’s negligence – in this case, the loss of the use of the vehicle – and not the minor collateral offence of an expired MOT.

The minor nature of the illegality in this case was insufficient to prevent recovery of the hire charges. The court revisited and reapplied referenced Hewison in stating that a court should not deprive a Plaintiff of damages merely due to a collateral or insignificant illegal act, such as the expired MOT.

Thus, while I would accept that allowing the claim for hire charges in the present case may just about be said to tend towards being harmful to the integrity of the legal system, any harm is in my view strictly limited, leading clearly to the conclusion that it would be disproportionate to have refused the Claimant’s claim on the grounds of ex turpi causa.

 

Broader Legal Implications

 

This ruling has significant implications for both Plaintiffs and Insurers in the context of credit hire claims namely:

  1. Minor Traffic Offences Do Not Automatically Bar Claims: The court established that driving a vehicle without MOT was a relatively minor traffic violation on par with having defective windscreen wipers, or a defective lamp, or a non-conforming number plate and it should not preclude a claimant from recovering credit hire costs.
  2. Causation and Mitigation of Loss: The court clarified that the absence of a valid MOT certificate does not alter the fact that the Plaintiff’s loss – the inability to use the vehicle due to the accident – was caused by the defendant’s negligence. As a result, the claimant was entitled to recover the costs for a replacement hire vehicle.
  3. Potential for Future Cases: Although the Court of Appeal ruled in favour of the Plaintiff, it acknowledged that there may be cases in the future where more serious traffic offences – such as driving without insurance or with dangerous tyres – could potentially bar a claim or result in a reduction of damages. However, in this case, the court accepted that the failure to renew the MOT certificate was a minor offence and did not warrant a reduction in the claimant’s recovery.

 

Conclusion

 

The Ali v HSF Logistics case draws a conclusion under the long history of this case and similar cases involving a lack of MOT. However, “yet another skirmish-cum-battle in the overall “secular war” between the credit hire industry and defendants’ insurers” continues.

Contact Ruaidhri Austin, Partner in charge of Lacey Solicitors Credit Hire team if you have any questions or require legal advice in any similar cases.

 

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Ormond Building, 31-36 Ormond Quay Upper, Dublin 7, D07 EE37
+353 1 5134375

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3rd Floor, 18-22 Hill Street, Cathedral Quarter, Belfast, BT1 2LA
+44 28 9089 6540

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