Court of Appeal credit hire judgment in Sayce v TNT

Copley v Lawn stands

The Court of Appeal has now handed down its judgment in the credit hire appeal of Sayce v TNT, hot on the heels of the decisions in Pattniand Bent.   Gavin Perry, Head of Credit Hire at DWF highlights the key findings.

This case concerns an issue of significant importance to insurers, namely the provision of vehicles on an intervention basis.

District Judge Flood originally heard the case and found that by failing to accept a replacement car from the Defendant, the Claimant had failed to act reasonably in mitigation of her loss, and because the replacement would have obviated any need to hire a car on the open market, the Claimant was not entitled to recover damages from the Defendant (in line with the original decision in Copley v Lawn).

The matter then came before His Honour Judge Harris QC on Appeal, but in the intervening period, the Court of Appeal had determinedCopley and concluded that a Claimant’s loss was not wiped out by an offer of a replacement vehicle at no cost to the Claimant. Even if the Claimant acted unreasonably rejecting such an offer, they were entitled to recover an amount equal to “the actual reasonable cost of hiring a replacement” as reflected by the costs that the Defendant would have incurred in providing a substitute vehicle.  

HHJ Harris QC declined to follow the decision in Copley having considered that it was inconsistent with previous decisions in both the Court of Appeal and the House of Lords. That refusal gave rise to the present appeal.

In respect of this appeal, the parties had prepared a joint statement in support of the order that the appeal be allowed (on the basis that it was inconsistent with the binding authority that was Copley) but that the Defendant intended to seek permission to appeal to the Supreme Court on the grounds that Copley was inconsistent with established authority and wrong as a matter of principle.

In the circumstances, it therefore comes as no surprise that the appeal was allowed.

The court did however consider the matter in more detail given the expressed intention to appeal to the Supreme Court.

The Court of Appeal strongly criticised HHJ Harris QC, with Moore-Bick LJ stating it was quite wrong of him "to decide the appeal on the basis contrary to that on which it had been argued without indicating to the parties the course he was minded to take and without giving them an opportunity to address him on the question… the Judge’s failure to follow Copley v Lawn whether or not he was bound by it was a serious procedural irregularity … for that reason alone I think that the appeal must be allowed”.

The court then considered the reasoning in Copley, and stated that HHJ Harris QC was bound to apply it to give effect to the adoption of precedent, which requires lower courts to accept and apply the decision of higher courts even though they may consider them to be wrong.  Rather, he should have followed the decision whilst voicing reasoned criticisms of it – which may have led this to be an appeal by the Defendant as opposed to an appeal by the Claimant.

Having accepted the District Judge's view that the Claimant acted unreasonably in failing to utilise the service offered by the Defendant, the Court of Appeal also touched on the issue as to what damages would flow from that decision.

At paragraph 27 of his judgment Moore-Bick LJ stated: “I can understand why some find it difficult to see why the Claimant should be entitled to recover anything from the Defendant in respect of the loss of use of his own car, since it was a loss that he could, and ex hypothesi should, have avoided”. He went on to say: “I also have difficulty with the conclusion that a Claimant who has unreasonably refused an offer from the Defendant of a free car can recover at least the cost which the Defendant can show he [i.e the Defendant] would reasonably have incurred”, and states again, that it is not a decision that it easy to reconcile with the principle relating to avoidable loss.  


Moore-Bick LJ concludes that the appeal has brought to the surface important questions about the current status of the law on mitigation which have implications beyond the confines of road traffic accident cases.

Usually, this would give adequate grounds to grant the permission to appeal sought by the Defendant. However, due to the serious procedural irregularities in this case, which led the Defendant to accept that the appeal should succeed, this case was not the appropriate one for testing the point.

The Court of Appeal were aware that permission to appeal to the Supreme Court was sought in Copley. The applicant referred to the principles of mitigation to which HHJ Harris QC referred in his judgment,  but permission was refused. Moore-Bick LJ went onto say that “I think that it would be beneficial for these questions to be considered at the highest level as soon as a suitable opportunity arises” which suggests that he  thinks that permission should have been granted in the case ofCopley.

Practical effects

Copley remains good law, and insurers/compensators will continue their intervention policies.  Intervention letters should be comprehensive and set out clearly the cost to the compensator of providing the replacement vehicle, to include the necessary insurance/additional drivers etc.

Remember that the ABI GTA scheme dictates that in the event that a participating compensator is first to the Claimant with the offer of the vehicle, the CHO should not put the Claimant in a replacement vehicle.

Compensators now need to give consideration to finding the appropriate test case to go to the Supreme Court on the issue of intervention.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Gavin Perry

Partner - Head of Credit Hire

I am a Partner in the Insurance team and Head of Credit Hire.