About this case:

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In the High Court in Belfast, evidence was adduced that the woman was impecunious, was unable to foot the bill for the repairs; and that she could not afford £200 excess fees to invoke her own comprehensive insurance policy.

Due to delay caused by the tortfeasors’ insurance company, hiring a rental car was the woman’s only means of transport for 445 days from the date of the accident –resulting in nearly £40,000 for the rental costs alone. Ms Justice Siobhan Keegan was satisfied that the woman had acted reasonably in all the circumstances, and made a decree of £51,210 to include the 445 days of car hire costs.

Background

In 2009, Ms Karen McCauley, a single mother in receipt of State benefits, bought a three-year-old second-hand car by way of hire purchase agreement.

In April 2010, she was hit from behind by another car driven by Francis Brennan in a collision which was not her fault.

Ms McCauley was injured as a result, and the repair bill for her car came to around £3,000, however she could not afford to pay that bill.

After five weeks with no car relying on family and friends to get around, Ms McCauley contacted Accident Exchange (AEL) and they agreed to take over her case.

Ms McCauley gave evidence that she needed a car particularly given her child care responsibilities.

When asked why she did not claim for her car repairs on her own insurance, Ms McCauley simply said that she could not afford the £200 excess.

The High Court

Sitting in the High Court of Justice in Belfast, Ms Justice Siobhan Keegan stated that the three main principles at issue in this case were:

Counsel on behalf of the plaintiff submitted:

On behalf of the defendant/third party, it was submitted that it was ‘totally disproportionate to allow for nearly £40,000 worth of hire’. Referring to comments in Zurich v Umerji EWCA Civ. 357, Counsel stressed that res inter acta alios could not be an immutable principle and to maintain it would lead to a perverse result. As such, it was argued that the plaintiff was entitled to only ten weeks hire.

Invoking her own insurance policy

Justice Keegan stated that it was important to note that Ms McCauley:

It was put to the Court that Ms McCauley should have invoked her own policy of insurance, however Justice Keegan stated that this was a matter of choice given the privity of contract between Ms McCauley and her own insurer.

Justice Keegan explained that if she were to find that Ms McCauley should have invoked her own policy that led ‘to a situation where the conscientious person who takes out comprehensive insurance and pays for that is penalised’ whereas a person who takes cheaper ‘third party insurance may be placed in a better position’.

Impecuniosity

Justice Keegan stated that Ms McCauley was clearly a woman on the breadline with a small child, and so impecuniosity was a strong factor in the case.

It may have been a different issue if Ms McCauley was pecunious, as a court would look to see how the repairs or a replacement car could be paid for within a reasonable timeframe.

Even if impecunious, the court might have considered clear evidence as to the potential to borrow as per Opoku v Tintas EWCA Civ 1299 – however there was no argument made that Ms McCauley could have raised such an amount of money by her own borrowing.

In response to the suggestion that Ms McCauley could in some way have funded the £200 excess on her own policy with a loan from her father – Justice Keegan emphasised that it was important not to rush to create a position whereby benevolence from another party is used to assist the tortfeasor.

Fundamentally Ms McCauley must be put back in the position she was in prior to the actions of the tortfeasor.

Delay

Justice Keegan described the delay in this case as a ‘striking feature’

The insurers on behalf of the tortfeasors took ‘a very long time in apportioning liability, getting the documents together, and settling this case’, and that there ‘was clearly a battle of wills’ which had nothing whatsoever to do with Ms McCauley

In all the circumstances of the case, Justice Keegan was satisfied that Ms McCauley acted reasonably; and that by contrast there were delays and disputes between insurers who also knew that the hire costs were rising.

Accordingly, ‘the insurers could have worked out an arrangement between themselves whereby damages were paid to compensate Ms McCauley at a much earlier stage which would have reduced the hire’.

Ms McCauley was therefore awarded £51,210; to include an agreed figure of £36,210 for hire along with £15,000 general damages.