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Steadman v TNT Express Ltd, Dudley County Court, 19 June 2008

31 July 2008
The issues

Credit hire – mitigation – whether Claimant should have accepted offer by Respondent to provide her with a replacement car at no cost – Evans v TNT Ltd.

The facts

In April 2006 the Defendant’s lorry driver drove an IVECO rigid goods vehicle into a collision with the Claimant’s parked, unattended Seat motorcar. The car was damaged beyond economic repair. Proceedings were brought claiming credit hire charges of £2,332.38 plus £40.00 collision damage waiver insurance. Liability was admitted. Entitlement for damages for hire was disputed.

On the day of the accident the Claimant hired a replacement vehicle from Help Hire (UK) Ltd and retained the vehicle for 43 days at a daily rate of £45.00 plus VAT. The contractual documentation was signed on the 13th April 2006, 8 days after the accident. At the scene of the accident the Defendant’s driver handed the Claimant a “company driver information card” which contained on one side “important information for the other party mitigation of losses”. This stated that TNT would, if necessary and subject to liability, be able to assist the “other party” with vehicle repairs and arranging a replacement vehicle free of charge. It was recommended that if the “other party” chose not to contact TNT direct that they should show the slip to their insurance or legal representative and reminded the “other party” of their legal duty to keep expenses and losses to an absolute minimum. This document was passed to the Claimant’s insurance brokers without the Claimant having read it. The District Judge found, as matters of fact, that following the accident the Claimant needed to hire a replacement vehicle urgently; that all her enquiries were delegated to her insurance brokers, Swintons; that Swintons made no enquiries at all of the Defendant or ever considered the Defendant’s offer; that the Defendant’s offer was “a genuine scheme”; that, had the Claimant taken up the scheme, she would have been put in the same position as if she had had a second car provided at her disposal cost free; that she should have accepted the Defendant’s “perfectly good offer”; that the whole of her costs had been incurred as a result of her decision or that of her broker; and that the Claimant had failed to mitigate that loss in its entirety. On appeal, the Judge found the issue before him to be the same issue that had been before the Court in Evans v TNT, the decision of the Pontypridd County Court, namely:-

“Whether, when a Claimant has failed to mitigate his loss by accepting an offer made by the Defendant which would have reduced the value of the Claimant’s damages to nil, he is never the less entitled to recover, by way of damages a) the sum representing the Defendant’s outlay, where he, the Claimant, has in fact expended more than that sum, or b) any sum which is less than the Defendant’s outlay.”

The decision

It was important to distinguish between the duty to mitigate loss on the one hand and the measure of damage where loss had not been mitigated or mitigated to a reasonable extent on the other.

In this case the District Judge had found that the Claimant had failed to mitigate her loss by not accepting the offer of a replacement car. Following the decision in Darbishire v Warran the principle was that the Claimant was not entitled to charge the Defendant by way of damages with any greater sum than that which was reasonably needed for the purpose of making good the loss. Applying that principle to the District Judge’s findings the questions ‘what sum did the Claimant reasonably need to expend for the purpose of making good the loss?’ and ‘what was the loss for which such expenditure would make good?’ had to be answered as follows:-
Firstly, the Claimant did not reasonably need to expend anything in accepting the offer of a replacement car, and secondly, the loss was the loss of a useful chattel and this loss could be made good by the provision of a substitute chattel. It was important to analyse the nature of the loss. Where goods were destroyed the owner of the goods was entitled to restitution, ie putting the Claimant back into the position they would have been in if the destructive damage had not occurred. Generally this was the award of the market value of the goods with which the Claimant could obtain a replacement. The Claimant’s loss in this case was the value of her car. The Defendant had said that its offer satisfied this entitlement, pending the payment of the value of the car by her insurers. In fact, the Claimant’s loss was a consequential loss, i.e. it was a consequence not of the damage to the vehicle but rather of the fact that the tort feasor failed to provide immediate restitution either of the vehicle itself or its value. It was common, for those who were placed in the position in which this Claimant found herself, to hire a substitute vehicle pending payment of the value of the vehicle. The Judge had, with reluctance, to depart from the decision of the Judge in Evans v TNT. The problem lay in a non sequetur in that Judgment, namely the conclusion of the learned Judge that “acceptance of the Defendant’s offer would have reduced the value of the Claimant’s damages under this head to nil”. This was a confusion of the principles relating to mitigation of loss and the principles as to the measure of damages, once there has been a finding of a failure to mitigate. The only relevant loss was the loss suffered by the Claimant, and for which the Claimant claimed. If a Defendant chose to make an offer to satisfy the principle of restitution then that was entirely a matter for the Defendant and the cost to the Defendant for doing so was irrelevant to the measure of the Claimant’s damages. The Judge was wrong to find that the refusal of the offer of the car should be treated as the refusal of an offer of cash, where the reference to cash was intended to be to hire costs. That could only be right if the Defendant intended to offer the car to the Claimant as a permanent replacement for the damaged vehicle and that the replacement was of equivalent value to the damaged vehicle. Nor did the decision in Evans v TNT deal with the issue as to the measure of damages.

The Court had to evaluate the Claimant’s loss in the light of a clear finding of fact that the Claimant should have accepted the car offered by the Defendant. The District Judge had been right to dismiss the Claimant’s claim.


The Judge noted that much of the so called credit hire litigation might have been avoided if the Defendants or their insurers instituted schemes to provide the innocent victims of vehicle damage with suitable alternative means of transport. Such schemes would, if properly formulated, result in Claimants being able to avoid loss and would be very attractive to the victims of such accidents.

Many thanks to Darran Harris of Pollard Bower who brought this case to my attention.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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