Credit Hire –
Defendants fighting back
Gavin Clark
5th September 2013
Agenda
Ramirez -v- EUI Ltd
Bicycle Credit Hire
Recovery and Storage
Intervention
What does the future hold?
Ramirez -v- EUI Ltd
Pre-issue advice
 Is liability disputed?
 Settle non-contentious heads
 Consider hire
• Issues on locus standi, enforceability, need?
• Make admission to ensure balance is below SCT
limit and discharge by way of interim payment
Background
The claim comprised:• Repairs of £1,588.65.
• Hire charges of £5,907.60.
• Miscellaneous expenses of £50.
Liability not disputed
Repairs were admitted
Admission made of £3,459.60 for hire
An interim cheque issued leaving a balance of £2,498.
Proceedings
 Issued for the full amount.
 No credit given for the interims.
 We admitted liability, quantum for
repairs and the claim for hire up to the
admission i.e. £3,459.60.
 We put the claimant to proof as to the
balance and argued that this was a SCT
matter.
The arguments
CLAIMANT
 The admission was not accepted
by the claimant and therefore
the whole of the claim for hire
charges was disputed.
 This was a clever ploy to deprive
a claimant of his costs and to put
pressure on claimants to under
settle claims
DEFENDANT
 No issues re locus standi, enforceability
or need and therefore the issues were
not at all complex.
 By virtue of the admission the amount in
dispute was just £2498.00.
 If the claimant was awarded less than the
admission we would not seek repayment
of the balance.
 This was a FT matter.
 This was a SCT matter.
Judgment
 DJ Wakem cited the explanatory note in Part 14
“It follows from these provisions that if in relation to a claim the
value of which is above the small claims track limit of £5,000, the
defendant makes before allocation, an admission that reduces the
amount in dispute to a figure below £5,000 the normal track for the
claim will be the small claims track”.
 Matter allocated SCT but gave permission to appeal.
 NB – the claimant did not apply for costs
The appeal
 When considering allocation the court must consider:– Any amount for which the defendant does not admit liability is in dispute.
– Any sum in respect of an item for which judgment has been entered is not in
dispute.
– Any specific sum claimed as a distinct item and which the defendant admits
he is liable to pay is not in dispute.
– Any sum offered by the defendant which has been accepted by the claimant
in satisfaction of any item which forms a distinct part of the claim is not in
dispute.
 As to recovery of pre-allocation costs, the claimant can, before allocation, apply
for judgment with costs on the amount of the claim that has been admitted
Court of Appeal

Withdrawn at eleventh hour

Appeal marked as dismissed

Appellant to pay costs

But is this the end?
Benefits
Cost savings
Pre-August – £1000s
Post August
Willingness to negotiate
More favourable outcomes?
Pre-allocation
Post-allocation
Pre-listing
Potential saving
-
£1160 + VAT + 20%
£1880 + VAT + 20%
£2655 + VAT + 20%
£1495 + VAT
The new battleground
 Cycle Accident Management Services (CAMS)
 Agreements typically claim charges in the
region of £35.00 plus VAT together with an
additional daily amount of £5.00 plus VAT for
CDW.
 Also claimed are charges for delivery and
collection.
 Charges are often grossly disproportionate to
the value of the bicycle.
How to defeat these claims
 Enforceability
 Need
 Higher threshold?
 Alternatives
 Period
 Rate
 Impecuniosity
 Londonbicyle.com (£50.00 p/week)
 Intervention?
 Johnston -v- Loizou
Recovery & Storage Charges
 Increase in frequency of Recovery
& Storage
 The arguments:
– Enforceability
• Valid credit agreement?
• Regulations 2008
– Need
– Mitigation
 Hasnath -v- Shahid
Intervention - Prevention is better
than cure
 ABI/GTA restrictions
 A successful intervention:
– Telephone calls
– Telephone transcripts
– Copley compliant letter
 Smith -v- Currier
What does the future hold?
Post-LASPO
The referral fee ban
Closer cooperation
between CHOs & solicitors
Increase in the small
claims limit to £10k
The future of the ABI GTA
 Office of Fair Trading &
Competition Commission
 GTA mediation
 The GTA Portal
 Hire rate reviews
Office of Fair Trading – report May 2012
 Inflating the costs of replacement vehicle.
 Estimated increased cost - £560.00/hire
 Remedies:
– Reforming the GTA
– An extension of the referral fee ban
– The at fault insurer to have first option
of supplying a vehicle
– The introduction of a first party
insurance model
 Referral to the Competition Commission
Competition Commission
Possible Remedies
 Improvements to the GTA.
 An extension of the referral fee ban
 Non fault insurer having first option of intervention
 Each insurer deals with its own policyholder.
 An independent monitoring and rate setting scheme for
non fault claims.
 http://www.competition-commission.org.uk/ourwork/private-motor-insurance-market-investigation
Summary
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Ramirez -v- EUI Limited
Bicycle Credit Hire
Recovery and Storage
Intervention
Credit Hire - Post LASPO
What does the future hold?
Any Questions