CLAIM NO JE 057016

IN THE OXFORD COUNTY COUNTY

BETWEEN

AMANDA CLARK
Claimant

- and -

ARDINGTON ELECTRICAL SERVICES
Defendant

CLAIM NO JE 059931

BETWEEN

JULIAN DENNARD
Claimant

- and -

ROBERT PLANT
Defendant

CLAIM NO JE 055637

BETWEEN

ARJUN SEN
Claimant

- and -

STEELFORM ENGINEERING COMPANY LTD
Defendant

CLAIM NO JE 061176

BETWEEN

VICTOR LAGDEN
Claimant

- and -

PHILIPPA O'CONNOR
Defendant

JULY 31^ST, AUGUST 1^ST, 2^ND & 3^RD 2001

BEFORE JUDGE CHARLES HARRIS QC

Ian Milligan QC, Benjamin Williams and Neil Hext for the Claimants,
Julian Flaux QC, and Marcus Grant for Ardington Electrical Services, Steelform Engineering Co Ltd and P O'Connor Ian A B McLaren QC and Steven Turner for Robert Plant  

JUDGEMENT HANDED DOWN: 14 SEPTEMBER 2001    

1. These four cases constitute the latest campaign in the long-running and by now well-known contest between the Motor Insurance Industry and Credit Hire companies which provide innocent victims of road traffic collisions with car repair and hire services. The Helphire Group was the provider of such services in these cases, and it is one of the best known in the field. It brings these actions in the names of four drivers whose cars were damaged in 1999. Liability is nowhere in issue. The Insurers contest damages for hire and repair on a wide variety of grounds. The claims for the costs of examining engineers have been abandoned without explanation.
   
   
2. Many of the same points arise in this litigation as were dealt with in three case's which I tried in the Oxford County Court in August 2000, (Seddon –v- Tekin, Dowsett –v- Clifford and Beesley –v- Pit Columbus Healthcare). These all settled on arrival at the Court of Appeal thus affording no opportunity for definitive rulings for application to the many outstanding cases. It is the expressed intention of the parties in the instant litigation to use the decisions in these cases as the basis for further appeals.
   
   
3. Considerably more evidential material has been made available than there was last year. Fresh arguments have been developed and old ones refined, and a great deal of authority has been deployed over the four days the trials lasted. Even so, Counsel did not have sufficient time available for very prolonged or leisurely analysis, and they covered extensive ground with as much brevity as skill.
   
   
4. I will first set out a summary of the facts of the four cases.
   
   
THE FACTS IN CLARK


5. On 22^nd May 1999 Mrs Clark was driving her 1995 Vauxhall Cavalier when it was run into from behind by the Defendant's negligently driven vehicle. She left matters entirely for her husband to sort out. He rang her broker, A-Plan, and was told to take the car to a repairer called John Oliver Body Repairs in Witney. He did, and was there supplied with a car for her to use while the repair was carried out. Both he and Mrs Clark say that they thought this was a courtesy car supplied by their own insurers, as had happened on a previous occasion. But it was in fact supplied by Helphire who had an arrangement with A-Plan, whereby for a block policy consideration of £1 A-Plan was entitled to call upon the Helphire service for any of a large number of its own clients. Helphire paid A-Plan commission. Mrs Clark knew nothing of this arrangement.
   
   
6. Mr Clark thinks that he was given some documents at the garage and these I find included a Helphire hire and repair agreement which he was asked to get his wife to sign. This she did on 24^th May 1999. I accept as accurate and truthful her evidence that she thought that this was simply paperwork for a courtesy car, and that she did not read what she signed. She had other things to think about, being in an advanced state of pregnancy. Had she read the hire agreement she would have seen that it provided for the hire of a Vauxhall Vectra 1.8, that the period of hire "shall not exceed 12 weeks", and that "unless the hirer had entered into the companies [Helphire UK Ltd] supplementary credithire agreement the hirer shall make payment for the hire for the expected duration of the hire at the commencement of the hire and otherwise upon demand ...." She did sign a credithire agreement. It is necessary to set out its provisions in some detail. Under the heading Credit hire Agreement there appeared this, "This agreement is supplementary to a vehicle hire agreement between you and Helphire UK Ltd (Helphire) following a road traffic accident. It deals with your legal liability to pay for the hire of the vehicle and the costs of any claim against the other driver on your behalf. Read it carefully ensuring that you understand it before signing it. If you have any questions please ring legal advice. There then followed a number of conditions of which the following are salient.
   
   
7. Provided that you are not found to have caused or contributed to the accident you are entitled to a replacement vehicle while yours is unroadworthy or being repaired at the expense of the driver at fault or his insurers.
   
   
8. Helphire's credit hire scheme enables you to hire a vehicle from Helphire on credit. The credit is provided while helphire pursues a claim on your behalf against the third party, this will be done through Helphire's own legal department or by solicitors nominated by Helphire. The solicitors will be instructed by you and will act for you.
   
   
9. Subject to conditions 10 and 14 the credit period expires when the claim has been concluded either by completing negotiations with the third party or by a decision of the court. At that point you will be liable to pay Helphire's hire charges but if it has been established that you were not at fault the hire charges will be recovered by Helphire or the solicitors from the third party.
10. The legal costs and expenses incurred in pursuing the claim for you will also become payable at the conclusion of the claim, if however at the conclusion of your claim it is decided that that third party is to blame you are entitled to be indemnified by the third party for these legal costs and expenses.
    
    
11. What this means is that if you were not the one at fault in the accident and you have complied with the terms of this agreement all the hire charges and related legal costs and expenses will be recoverable from the third party.
    
    
12. If at the conclusion of the claim it is decided that you were wholly or partly to blame for the accident you will be liable to pay Helphire's charges and your legal costs and expenses immediately. You may also be liable for any such costs incurred by the third party.
    
    
13. Helphire's provision of credit for the hire vehicle is on condition that:
1. Helphire may bring a claim for the hire charges against the third party in your name or nominate solicitors for you to instruct in bringing the claim.
2. You will co-operate fully in the bringing of the claim to include coming to Court to give evidence in the unlikely event that this is necessary.
3. Any cheques made out in your name which include an amount for the hire charges may be paid into Helphire's bank account event if they are marked Account Payee only or similar or include any other money which is due to you if this happens Helphire will immediately send the other money on to you.
   
   
14. If the hire charges are paid to you for any reason then you will pay them to Helphire immediately.
    
    
15. You will pay the whole of the hire charges immediately if demanded by Helphire should any of the following occur [there then follow a number of provisions dealing with what are likely to be fairly unusual situations for example that the customer has misled Helphire or says that he does not wish to continue, or dies or becomes bankrupt.]
    
    
16. In the event that Helphire demands payment under condition 10, Helphire will postpone its demand pending the obtaining of a barrister's decision should you request it. You would be liable for the costs involved in obtaining the opinion and be required to pay the estimated amount of thecosts in advance and within 7 days of being notified of them
    
    
17. This agreement shall not apply to any vehicle hire agreement where the hire vehicle has been hired for a period exceeding 12 weeks.
    
    
18. The Credit period extended by this agreement shall expire in any event 51 weeks from the date of this agreement. At the expiry of the credit period you shall then become liable to pay the hire charges in full. If the charges are subsequently recovered from the third party Helphire will refund then to you.
    
    
19. There was also a credit repair agreement in similar terms between Helphire UK Ltd and Mrs Clark. At some stage (it is not clear when but the document is dated 12 May 1999 that is 10 days after the accident) Angel Assistance Ltd a Helphire subsidiary acting as agents for the Albion Insurance Company Ltd issued to Mrs Clark an Angel Assistance Protection Plan commencing on the 12^th of May 1999.
    
    
20. This provided that following an "insured incident" defined as an accident "which causes loss or damage to the insured vehicle.... Which we believe can be shown on balance to be the fault of another party... the accident must have occurred during the period of insurance...We will seek to recover an insured persons uninsured losses. We will instruct an approved lawyer on your behalf and pay the legal costs. If you use Helphire's credit hire or credit repair services we will pay Helphire's costs and interest on conclusion of your claim in respect of them whether by judgment or settlement in the event that the costs cannot be recovered from another party that you and helphire consider to be at fault. As Helphire's costs have to be paid within 51 weeks in any event we will pay if your claim has not been concluded by then even if the claim is continuing". There were a number of other clauses including one whereby "you", defined as the person who had paid the premium, "must co-operate fully" with us in a number of specified respects. Mrs Clark told me and I accept that she was at that time completely unaware of this Angel policy. She never paid any premium in respect of it and it is to be noted that the insured accident was outside the period of cover.
    
    
21. Helphire has disclosed a letter of the 24^th May 1999 addressed to Mrs Clark: "Further to your conversation with Marie a vehicle has now been arranged for you I enclose our hire agreements for your signature please sign them where indicated retain a copy for your records and post them back to us " Mrs Clark was quite clear in her evidence which I accept, that she had not had a phone conversation with Marie or with anyone else at Helphire. On the 25^th of May it appears that an engineer from H E Milburn Reading inspected that car (although repairs appear already to have started)and on the 28^th May reported to Experts Unlimited (another Helphire subsidiary) about the damage, and estimated repair costs of £1,150.00 including VAT. The repair period was said to be five days. On the 28^th of May 1999 Millburn invoiced Experts Unlimited in respect of its fees and expenses for the inspection at £35.00 plus VAT a total of £41.13.
    
    
22. Mrs Clark's car was returned on the 2^nd of June after 10 days of hire. Also on the 2^nd of June 1999 Experts unlimited drew an invoice addressed to Mrs Clarke "to the provision of an inspection and report" in the sum of £60.00 plus Vat a total of £70.50; this for £29.37 more than its bill from the engineer. This was never sent to her. On 3^rd June 1999 an invoice for hire charges addressed to Mrs Clark was produced in the sum of £575.00 being 10 days at £44.00 plus £2.00 for additional driver per day and £30.00 for delivery and collection. At its base in large print was written "Cheques should be made payable to Helphire UK Ltd". This invoice was never sent to Mrs Clark.
    
    
23. Over six months went by and then Helphire sent Mrs Clark a statement for signature. This stated inter alia : "(7) following the accident my vehicle was driveable however repairs needed to be carried out and I requested a replacement vehicle for the duration of the repair period. I was referred to Helphire UK Ltd by A-Plan Carterton whereby I was fully advised of the service they would be able to provide me. I understand I am liable to pay Helphire Group PLC after 51 weeks as per the agreement I signed and that I have the benefit of insurance policy to pay these charges if required. (8) I do not wish to utilise my comprehensive insurance policy as I did not wish to jeopardise my no-claims discount. (11) As a result of this accident losses have been incurred amounting to car hire £575.75, engineers fee £70.50 credit repair costs £1031.18 additional travelling £22.05, total £1699.48".
    
    
24. She agreed in evidence that a good deal of this letter, certainly the last two sentences of paragraph 7, and paragraph 8, were not correct and she did not know the prices involved, but that "as it had been prepared for her" she signed it and sent it back.
    
    
25. Time went by, On 3^rd April 2000 the Helphire Group PLC wrote to Hugh McMurray a firm of solicitors they use as follows: "We write to advise you that under the terms of your clients agreement with our subsidiary companies outstanding hire and/or repair charges and engineers charge will shortly become due. Your client has the benefit of an Angel policy this policy provides an indemnity for your client so that these charges will be met if your client has not paid them within the payment period allowed under the agreements. If your client wishes to make a claim under the Angel policy would they (sic) please countersign a copy of this letter and return it to Angel assistants LTD. If your client chooses to avoid the policy or if for any other reason they do not wish to rely on it, can you please ask your client to let us have their proposals to settle these charges in writing within the next 14 days, "and at the bottom there was a place for the claimant signature under the heading 'I wish to claim under my Angel policy in respect of Helphires outstanding charges referred to in this letter'. On the 19^th May 2001, Murrays wrote to Mrs Clark stating that 'the agreement you signed at the time of the hire agreement allowed you to defer payment to Helphire for a certain amount of time. This period of time is now elapsed and payment is now due" and they suggested that she might claim on her Angel policy by signing the letter of 3^rd April.' On the 23^rd May she did sign ' so as to have nothing further to worry about'. On the 2^nd June 2000 Angel wrote to Mrs Clark saying 'we write to confirm that the claim on your Angel Legal expenses policy has been accepted and your outstanding charges due to Helphire Group companies have been paid'
    
    
26. When the letter with Mrs Clarks signature on it dated 23 May was received by Helphire, it then appeared on a list of cases ' ready to be transferred to Angel'. This list was a long one and was explained by the only Helphire witness which was called, Mr Tilley, as having been produced by a computer in Helphire's central finance department, and it sets out the amount outstanding for each of many customers in respect of hire, repair and engineers charges. He explained that' all the individual amounts owed by customers and listed in the batch are then totalled up and payment is made by Angel of the batch total. Angel paid the amount owing the Helphire for hire charges to Helphire U.K, and for repair and engineers charges to Helphire Finance by a single cheque to each payee ( it was not challenged that cheques were drawn and presented). Mr Tilley explained that this system then generated the paid hire invoice and a standard letter to the customer confirming that Angel has made the required payments. Cheque stubs showing the total payments were dated 8^th June 2000. So the cheque payments had not been made by the 2^nd June 2000 as asserted in the letter of 2^nd June 2000 and were in fact made more than 51 weeks after the date of the Hire agreement. Furthermore the repair charge payment was not made to Helphire U.K but to Helphire Finance as provided in the repair agreement. It later appeared incidentally that the engineers fees were not re-imbursed to Experts Ltd at all. Mrs Clarks letter of claim was written on the 3^rd April 2000. However, proceedings were issued in her name on 1^st March 2000.
THE FACTS IN DENARD


27. On the 6^th November 1999 Mr Denard, a young investment manager, was driving his new Mazda MX5 sports car when the defendant negligently reversed into it doing damage to it's flank. Mr Denard was also with A plan. He rang his brokers and they told him he was entitled to use the Helphire service. He said he would like to, and someone from Helphire rang him, was satisfied that his was a no fault case, and offered him a choice of garages. He choose Lovekyn in Kingston which he went to, twice. On his 2^nd visit on 11^th November 1999 the Helphire representative gave him hire and repair agreements to sign and supplied him with a 1.8 Vauxhall Vectra. This of course was not a sports car like his own, it was an ordinary saloon car but he was prepared to accept it.
28. The agreements Mr Denard signed were similar to those in the Clark case save that the credit agreements stated that "the credit period extended by this agreement shall expire in any event 26 weeks from the date of the agreement. At the expiry of the credit period you shall then become liable to pay the repair charges in full. If the charges are subsequently recovered from a third party Helphire will refund them to you." Me Denard's policy was unlike Mrs Clark's in that it was a post-accident policy and it was with Europ Assistance not Albion.
    
    
29. On the 12^th of November an engineer, Mr Phillips, visited the garage. He agreed total repair costs of £1,150.00 plus VAT and said that the repairs should take approximately 5 days plus a possible allowance for obtaining parts. He said labour had been agreed at £560.00 although on the 9^th of November the garage had estimated labour charges at £480.00. In the light of this Mr Tilley agreed that the engineer did not seem to be ensuring that the claimant was not overcharged. The garage took a long time to mend the Mazda. Mr Denard had been told that it would take five days but although he chivvied them regularly on the phone it was not ready for collection until 12 days later. The hire charges came to £650.95. On the 15^th of November 1999 Phillips produced an invoice directed to Mr Denard for its inspection for £35.00 plus VAT a total £41.13 but did not send it to him. On 17^th November experts unlimited produced an invoice addressed to Mr Denard for the experts report in the sum of £60.00 plus Vat namely £70.50 which they did not send him either. Mr Tilley said that the purpose of this was for production to the Defendants insurers. He agreed that until investigations by Defendants insurers inquiry agents revealed this dual invoicing only the higher one was disclosed to a Defendants insurers.
    
    
30. On 22^nd May 2000 Helphire wrote to McMurray with a letter for Mr Denard to sign to claim on his Angel policy, again as in the Clark case, which he signed on the 31^st May. On 3^rd July 2000 Angel wrote to McMurray stating that it had "now paid" all money that "they" (meaning Mr Denard) owed to Helphire. " we enclose a hire invoice showing a zero balance... we act for the underwriter who has now subrogated rights in respect of the sums paid.... Please accept this letter as our instructions to act... to recover these sums". However according to the disclosed Helphire documents the sums had not been paid by 3^rd July 2000. They were included in a batch of some £3.2 million apparently paid by cheques dated on 10^th July 2000 well outside 26 weeks from the date of the agreement which was 11^th November 1999. Again the repair costs were paid not to Helphire UK but to Helphire Finance Co Ltd. A letter of claim was written in 22 May 2000. Proceedings were commenced claiming car hire charges of £650.95, engineers fee £70.50, credit repair costs £1136.88.
THE FACTS IN SEN


31. Dr Sen, a very precise witness, was involved in an accident on 31^st May 1999 when his Ford Fiesta was hit from behind by the Defendants BMW while he paused at a roundabout near Bicester. He took his car to a garage he knew, Midland Link Motors. Someone there told him about Helphire and how it would provide a hire car and deal with the repairs for him. He said he was told at the garage that if he took out an Angel policy then if the repair hire and engineers fees were not recovered from the other driver Angel would indemnify him for his losses. He confirmed that he would like to do this on the telephone from the garage to Helphire. He did not wish to prejudice his seven year no-claims bonus. He completed an accident report form on 2^nd June 1999 and the following day a Helphire vehicle hire agreement, credithire agreement (51 weeks) and a credit repair agreement were also filled in. He sent Angel a cheque for £10.00 dated 4^th June 1999 by way of a premium for the insurance.
    
    
32. He was provided with a Vauxhall Astra which he had for only three days, the 3^rd to 5^th of June 1999, while he visited his mother in Birmingham. The hire charges in his case were £190.35 and an invoice was addressed but not sent to Dr Sen on 9^th June 1999. Also on 9^th June Angel wrote to Dr Sen confirming receipt of his £10.00 and stating that he was covered by its cost cover policy commencing on 3^rd June 1999 a copy of which it sent to him. Midland Link Motors prepared but did not send to Dr Sen an invoice in the sum of £326.30 plus VAT. These repairs were of the simplest kind, all that was needed was one bumper and some rear lights. There was no engineers claim.
    
    
33. On the 3^rd of April 2000 Helphire wrote to McMurray reminding them that Dr Sen's charges would shortly be due under the terms of the agreement and asking them to get him to sign the claim on the Angel policy if he wished to claim. McMurray's wrote to Sen on 20^th April and Dr Sen signed this on 17^th May 2000. On 11^th June 2000 Angel wrote to McMurray "as requested by our mutual client we have now paid all the money that they (sic) owed to the Helphire Group.... We act for the underwriter who now has subrogated rights in respect of the sum paid to Helphire please accept this letter as our instructions to act". Dr Sen's figures were included in a list of payments totalling £934,081.00 paid by a cheque dated 13^th July 2000, so at the time the letter on 11^th June was written it was not accurate to state that the money had been paid and thus that the right to subrogate had arisen. In the letter of claim in Dr Sen's case was the 3^rd April 2000 proceedings were commenced on 15^th February 2000 claiming hire costs of £190.35 and repair costs of £383.40.
    
    
THE FACTS IN LAGDEN


34. Mr Lagden was an unusual man, an ex press photographer, now an unemployed Jehova's witness in poor physical and mental health, with memory difficulties and a house on Canvey Island He had very little money, he was indeed at all material times subject to an administration order. On the 19^th November 1999 his 10 year old Ford Granada was parked unoccupied when it was damaged by the Defendants Mitsubishi Shogun. Mr Lagden took his car to nearby Essex Coach Works and there he said he saw a Helphire poster on the wall and he rang Helphire from the Garage. On the 3oth November 1999 Essex Coach work addressed an estimate to Mr Lagden. He was given a Ford Mondeo at Essex Coach Works on 6^th December 1999 and "thought" he was given Helphire documents at the garage on the same day, he ' believed' he signed the documents then and believed he could say with confidence that he read and understood the paperwork. He said he was given a list of tariffs which he 'thought was reasonable' or was convinced 'were fair'. In his principal witness statement he said that he thought the chances of being actually responsible for the charges were minimal. In evidence however, he said differently. He said he thought he might have to pay them. Anyway, he signed a vehicle hire agreement, a credit hire agreement, a 26 week one, and a credit repair agreement. All of these were dated the 6^th December 1999. On the 8^th December 1999 HW Bell & Co sent an engineer to inspect the car and agreed with the garage a provisional figure for repairs including VAT of £1020.,00 and the next day invoiced 'the court c/o Helphire Ltd' for professional services in the sum of £60.00 plus VAT, totalling £70.50. On the 16^th December 1999 the garage invoiced Helphire Ltd c/o Hw Bell for £1018.34. The same day the Mondeo was returned. The total costs of the car hire claimed in this case is £659.76.
    
    
35. Mr Lagden was not a wholly convincing witness. He gave discrepant accounts on the same date in his witness statement and his part 8 responses about what documentation he had had and when. His answers about why he felt the Hire charges were reasonable were curious and he seemed for no very obvious reason anxious to assist Helphire if he could. His figures appear in a list of payments by Angel totaling £1,506,066.00 made on the 10^th July 2000 to Helphire finance for the repair and engineers fees and £2,354,966.,00 to Helphire Uk for the hiring. As in other cases these payments were proceeded by correspondence stating they had already been made. On the 4^th July Angel wrote to Mr Lagden to tell him that his outstanding charges "had been paid" and that "by making this payment on your behalf the underwriter is not entitled to continue the for these sums against the other driver..... your continued co-operation is required thereby the policy terms. "Also on the 4^th July 2000 Angel wrote to Hugh McMurray telling that firm that everything was paid and instructed them to act for the underwriter who now had subrogated rights.


INSURANCE


36. Common to all theses cases is an underwriting agreement between Angel and insurers, either Albion in the cases of Clark and Sen or Europ in the cases of Denard and Lagden. In the Clark document Albion is described as the insurer and Angel Assistance the cover holder. The agreement specifies that it is between Albion Insurance, Angel Assistance Ltd and the Helphire Group PLC and it provides under the heading 'general objectives' in a passage with faint echoes of the treaty of Rome that "the purpose of this agreement is to develop an even closer working relationship between the parties. All parties will strive to achieve an harmonious working relationship at all levels within their respective orgainsations. They will hold regular meetings to identify any problem areas and agree constructive solutions. The parties will work together to ensure that business accepted will be written at premium levels sufficient to achieve and maintain profitability". It stipulated that Albion the insurer "hereby authorises the cover holder Angel to (a) bind insurance's in respect of the arrangements for its account. (b) Issue certificates and policies of insurance and endorsements in respect thereof "all in accordance with the terms and conditions of this agreement and the operating guidelines set out. Various members of the Helphire Group including the Chief Executive and directors Helphire UK Operations Manager, and Angel Assistance Operations Manager were authorised to hold covered risks and deal with renewals and claims. The agreement provided by Clause 12.1 that the cover holder would apply "such rates as it shall decide subject to the insurer receiving a net premium of 5 pence per policy subject to a maximum annual charge of £13,500 regardless of the number of policies sold". By Clause 14.2 the cover holder would indemnify the insurers in respect of the first £10,000 of each and every claim made under each policy issued hereunder and by 14.3 the indemnity contained in clause 14.2 was guaranteed by the Helphire Group. Under the heading Administrative Procedures it was provided that full and proper records were to be kept by the cover holder for each insured although "it is accepted that proposal forms will not be completed in view of the type of insurance which this agreement relates". There was a requirement for a claim form to be completed and signed by the insured, and satisfactory evidence of loss and ownership "shall be waived in instances where such claims fall within the level of indemnity provided under clause 14.2 and are settled by the cover holder". Notable features of this agreement were the modesty of the premiums, perhaps unlikely to be commercially realistic as a conventional insurance exercise, and the fact that it envisages that claims worth less than £10,000 would result in no net payment at all by the insurer, for either the payment would be made by Angel or Angel would indemnify the insurer. It was not even envisaged that claims accounts would be rendered when Angel paid and sums were below £10,000.00.
    
    
37. The underlying agreement with Europ was dated 30^th June 1999, it was to operate for all risks attaching after 1^st July 1999, and was made between Europ Assistance Insurance Ltd, Europ Assistance Ltd, Angel Assistance Ltd, Countrywide Assistance Ltd, and Helphire Group PLC. Its objective was stated to be "to develop a long-term business relationship between the parties with the intention that they should work together in their mutual interests". Europ authorised Angel to "bind insurances for its account by marketing policies of a type and in a form contemplated by the agreement". Similar personnel were authorised to deal as under the Albion agreement. The agreement applied to Angel's cost cover and costcover plus policies amongst others. Angel could apply such rates as it decided subject to Europ receiving a net premium of 5p per policy in respect of the first 250,000 policies which would amount to £12,500.00 and 3p per policy thereafter. Angel agreed to pay by way of additional premium any claims costs net of recoveries together with the costs of settling claims incurred by the insurer up to a maximum of £10,000. Angel was authorised to exercise Europ's rights of subrogation when it, Angel, so deemed necessary. Similar provisions to the Albion policy applied in relation to records, claims forms and accounting procedures.


FACTORING


38. Helphire also had a factoring agreement with the garages as a result of which the garages received 10% less than the tortfeasor was charged. Helphire Finance purchased the debts represented by the repairers invoices at 90% of the face value, but sought to recover the full price from Defendants.


DISCLOSURE


39. One aspect of all these cases, which the insurers were as anxious to explore as Helphire was reluctant to have explored, was the financial relationship within the Helphire Group between the various companies, consisting of Helphire UK, Helphire Finance, Angel and Experts Unlimited. In CLARK v ARDINGTON 19^th September 2000, I had made various disclosure orders, which were appealed to and upheld by the Court of Appeal on 4^th April 2001. Disclosure was made in accordance with those orders. There were thereafter case management hearings at which it was decided that other cases would be selected to join Clark (which Helphire did not in fact want tried) and Helphire indicated that a witness would provide a statement explaining the Helphire system. Such a statement was provided, but it did not satisfy the Defendants. Barely a week before the hearing of these cases was due to begin, a further application was made for discovery of the internal accounts of the Helphire Group. This was hotly opposed upon the basis that it was not relevant and that even if it was it would be too great a burden of material and consequential evidential provision to be injected into a hearing listed for a trial period which was already a tight fit and just about to start.
    
    
40. The essential allegation to which this disclosure was said to be relevant was one of circular cross-financing by the companies in the Helphire Group, around which it was contended that money passed or purported to pass with little or no apparent relationship to the structure of payments which the credithire scheme provided for and which discovered documents purported to show. Amendments to the defences were put forward, also very late. It was essentially being suggested that one part of the group had been transferring funds to another, especially Angel, in order for it to be able to pay the insurance payments. Given the very late stage that these applications for disclosure were made, for which there was no very good explanation in the Clark case (it was more understandable in the other ones) and some of the considerations raised in opposition I refused the request for disclosure of the internal accounts documentation, which it seemed likely would require experts to dissect, explain and analyse. However some of the Helphire Group's publicised accounts were none the less incorporated into the trial bundles. These were referred to in cross-examination of the only Helphire witness which the Claimants called, Mr Tilley, who was responsible for setting up the scheme but who repeatedly indicated that he could not answer financial questions as he was not responsible for the financial dispositions and accounting methods adopted by the Helphire Group. Certain factors did emerge from the material and accounts which were before the Court. They were helpfully summarised in a note from Mr McClaren and Mr Turner and included the following: Angel's premium income from the policies relevant to these cases were £10.00 per policy if the Claimants paid it or £1.00 per year for a block policy for example with A-Plan. Its accounts for the year ended 31^st March 2000 show a turnover of only £1,826244.00 and a profit before tax of £133,618.00. Yet the evidence showed that it was making regular payments – about every 2 – 4 weeks – of millions of pounds being the sums due under the Claimants insurance policies to Helphire or Helphire Finance. I have already referred to some of these figures. In the Clark case the cheques for the batch including her claim totalled £2,065,892.00. In the Denard case the total came to £3,861,062.00, the Sen total was £934,081.00 and Lagden was £3,761062.00. It was not obviously clear why these figures seemingly found no reflection either in the accounts of Angel or of Helphire Finance (the latters principle activities described in the directors report as the financing of vehicle repairs arising from insurance claims). It apparently made a loss in the year ending 31^st March 2000 of £6,317,399.00 and with a bad debt charge of £6,432,000.00 it listed debtors of £23,348,346.00. All this on a turnover of £30,463,265.00. It is not clear why Helphire Finance should be in such an apparently perilous state if it was regularly receiving payments from tortfeasors and insurance payments from Angel in respect of those tortfeasors who did not pay up. It's accounts also reveal creditors of £29,186,721.00 which is a figure remarkably similar to the total for debtors of £23,348,346.00 plus the written off debt of £6,432,000.00 making £29,780,346.00.
    
    
41. The Helphire UK accounts showed that for the year to 31^st March 2000 debts (the sum of debts written off £19,244,000.00, and debtors £48,144,461.00) as a total of £67,388,461.00. This again is curious if its arrangements include insurance provision for when timeous payments are not made under the credit arrangements. As will later appear in this judgment I was asked to conclude that the accounts show that no true payments were being made, especially by Angel, and thus there were no payments discharging the liabilities under the policies and the whole arrangement was a circular pretence aimed at provided long-term credit which should have come within the Consumer Credit legislation and which was dressed up as exempt agreements in order to avoid this. Given the refusal of the very late discovery and the very late defence amendments Helphire and/or its advisors decided that no financial witness such as its finance director should be called to explain matters, although the Defendants invited this even without prior disclosure of any statement. This was perhaps an understandable stance on their behalf, though it was also perhaps a pity.
    
    
    
42. Finally a great deal of expertly collated evidence was made available in these cases concerning the rates at which cars can be hired on the open market, so-called spot-hire rates so that comparisons could be made with the Helphire rates, I will refer to this later when dealing with the legal submissions for which it provided ammunition.
    
    
THE STRUCTURE OF THE HELPHIRE ARRANGEMENTS


43. It can be seen that the scheme as apparently intended to operate by Helphire was as follows:
    
    
44. Helphire made itself known to garages and brokers who would bring it to the attention of people with damaged cars.
    
    
45. Helphire would ascertain that a Claimants claim seemed to be one to which there could be no answer on liability
    
    
46. It would take a small insurance premium, unless a block policy provision applied, and provide a replacement car and get the damaged vehicle repaired pursuant to hire and repair agreements. Credit would be given for the
    charges thus arising.
    
    
47. These agreements stipulated that credit would end when the claim was completed against the third party within the credit term, or save for certain unusual cases where immediate demand might be made, in any event either 51 or 26 weeks from the date of the agreement. These periods were chosen to ensure that the agreements were exempt ones under Consumer Protection Legislation.
    
    
48. At the end of the credit period the hirer "would then become liable to pay the charges in full"
    
    
49. If a third party had not paid up within the credit period then Angel would invite an insurance claim under the claimants policy, which was an integral part of the scheme, to pay the repair and hire charges.
    
    
50. The hirer would probably not know the hire charges before getting the letter inviting him to claim under his insurance policy
    
    
51. It was not envisaged that the hirer would ever personally pay the charges for which the agreement made him liable, because if the third party had not paid the insurer would.
    
    
52. The insurer itself made no payments under the policy, but Angel did, ostensibly on its behalf. It did this (probably at the behest of the Helphire groups finance department) by writing very large cheques in favour of two other companies in the Helphire Group to deal with batches of claimants at frequent intervals. These payments were commonly made after the expiry of the credit period and no real effort seems to have been made to see that they were paid before. Misleading letters about payment dates were produced
    
    
53. It is not been suggested that the cheques by which the payments were made were not valid cheques duly met, and instruments which could have been sued upon if not honoured. However it is not clear where Angel got the money from to write these cheques.
    
    
54. The whole scheme could accurately be advertised to the public as one in which the innocent victim of a car crash could for £10.00, or nothing if a group policy applied, get his car repaired and be provided with an alternative while his own was out of action. This was clearly a beneficial and attractive arrangement for the car hirers, who did not suffer in any way.
    
    
55. Proceedings were commenced and witness statements were produced with little or no reference to the customer /claimant.
ISSUES ARISING


56. I propose to deal with the contentions in this case in the following order:
1. Causation and relevence.
2. Was the whole Helphire arrangement a pretence or sham and thus void and unenforceable?
3. If not, what is the nature of these agreements, and do they on their true construction achieve exemption under the Consumer Credit Exempt Agreements Order 1989?
4. In the cases of Clark and Denard are there any valid or apt contracts of insurance at all.
5. Is the recoverability of repair costs to be treated in the same way as that of hire charges?
6. Do the agreements still give rise to valid obligations even though unenforceable (if they are) under the Credit Hire Legislation?
7. The measure of damage in respect of credit hire cases.
8. The position of impecunious victims with credit hire agreements, and other miscellaneous points.
9. Interest.
   
   
   
CAUSATION & RELEVANCE


57. Mr Milligan made a broad and fundamental submission to the effect that the whole package of agreements obtained by the Claimants in these cases is irrelevant and should not affect the defendants liability. This he argues, is because any payments under the Helphire arrangements were not caused by the negligently engendered collisions but merely by the defendants failure to pay damages within the time specified in the policies. He categorises the Helphire contracts as "speculations by the claimants for their own account" and therefore irrelevant, and relies upon a passage from Goff J's judgement in The Elena D'Amico [1980] I Lloyds 75, 88,89. I will not quote the whole passage, but, it concludes "the point is that his decision so to act is independent of the wrong ..... His decision..... in the context of the breach is merely a decision which is triggered off by the fact that there has been a breach but it is not caused by the breach." The distinction between causing something and triggering it off, is it seems to me, a pretty fine one. Perhaps discernible in a ship chartering context like that of the Elena d'Amico, but less clear in the case of a housewife or doctor in need of a replacement car. It is I think straining language to categorise a motorist entering into a credit hire agreement as entering upon a speculation for his own account.
    
    
58. It was also submitted that since the Angel payments were made in order to extinguish the Claimants liabilities to Helphire, they would not have extinguished the Defendants liability to the Claimants, and are therefore irrelevant for this reason too.
    
    
59. These arguments, while having the merit of attractive simplicity do have the disadvantage I think of being inconsistent with the decisions of the House of Lords in Dimond –v- Lovell [2000] 2 WLR 1121 which I am not in any position to depart from. They might perhaps be more fruitfully deployed at a later stage in this litigation.


PRETENCE: THE GENERAL APPROACH


60. Central to the Helphire scheme are the Credit Hire agreements. A good deal of ingenuity has been devoted during the history of this type of litigation to attacks upon the nature and validity of these agreements and their associated hire repair and insurance arrangements. This is because if they are not enforceable against the credit hire companies, then neither the Claimants nor of course anyone suing by subrogation can recover the charges from the tortfeasors Dimond –v- Lovell [2000] 2 WLR 1121 HL. Earlier in the course of such litigation attention was concentrated upon whether these agreements were exempt from the requirements of the Consumer Credit legislation, with which they did not comply. Later the attack broadened from an analysis of the written terms and the argument was advanced that the whole arrangement was a sham or pretence to avoid the Consumer Credit legislation and thus for that reason unenforceable. In the cases I tried in 2000 I held that the agreements were not a sham or a pretence. Helphire was entering into exempt agreements as provided for within the Consumer Credit Agreements Exempt order, and, most importantly "For actual documents to be a sham with whatever legal consequences follow from this all the parties thereto must have a common intention that the actual documents are not to create the legal rights or obligations they give the appearance of creating". Diplock LJ in Snook -V- London and West Riding [1967] 2 QB 786, 802.

61. There was no suggestion in last year's cases and there is none in the instant ones that any of the Claimants who entered into their credit or insurance agreements had any improper motive whatsoever. They merely and perfectly legitimately wanted their cars mending and a substitute providing without significant expense to themselves. There is no evidence that they had any intention to avoid, legitimately or illegitimately, the application of the Consumer Credit Legislation. Snook is not contended to be bad law by anybody.
    
    
62. In the present cases the pretence argument was substantially developed to demonstrate that there is a category of pretence cases in which it is not necessary for both parties an agreement to be complicit or culpable. There is no need for common subjective intention. It is said that Helphire was improperly seeking to achieve something which the law forbids. Or, in effect that it had failed to achieve something which the law allows. This the Defendants sought to show by the application of an approach the same as or similar to that taken in tax cases such as Ramsey –v- IRC [1982] AC 30 and in various other types of litigation such as agricultural tenancy cases, Gisborn –v- Burton [1989] 1 QB 390 CA, and the Rent Acts, eg Street –v- Mountford [1985] AC 809 and Antoniades –v- Villiers [1990] 1 AC HL and Bankway -v- Pensfold [2000] 1 WLR 1369 CA. Mr Faux submits that where particular legislation's has been enacted for the protection of members of the public, the Courts should be astute to examine closely attempts by individuals or entities to avoid or exempt themselves from the effect of what is intended to be a mandatory protective legislative regime. In particular he says the Courts will look at a series of transactions, especially pre-ordained ones, to see whether what has been created is merely a pretence or artificial device designed to avoid the statutory protection and whether the true commercial purpose is to create an agreement or relationship which should attract the statutory protection. In such cases the Court he says will strike down or disregard the pretence. He suggested that the reality here was the provision of long-term credit without payment and that the insurance provision was merely a front. Mr Mclaren formulated his submission in the following way: he said that the Court should investigate the operation of an agreement or pre ordained series of agreements whenever:
1. It is considering a statute enacted for the benefit of the public or a specific class of individuals
2. The statute contains a section which prohibits contracting out.
3. An agreement or part thereof purports to bring the transaction within the statutory exemption without which the transaction would be regulated
4. There is prima facia evidence that the operation of the agreement is not in accordance with its written terms
   
   
63. He says that if these four conditions are satisfied, unless the parties seeking to establish the exemption can show that it actually functions in accordance with the exemption provisions, the agreement should be held to be regulated. I understood him to be suggesting here an alteration in the evidential burden of proof and not the legal one. He submits that these four conditions are all satisfied.
    
    
64. The Consumer Credit Act 1974 is a very complex piece of legislation, excessively so for one intended to cover everyday consumer transactions. Its provisions do not always provide an obviously just result (see for example the position of the pawn broker in Wilson –v- First County [2001] 1 QB 407 at 419 per Chadwick LJ). The Act was intended to establish protection for consumers who enter into credit agreements, but it was passed at a time when credit hire was either unknown or extremely rare. The 'consumers' in these credit hire cases are people who have suffered no obvious disadvantage at all by entering into their credit hire agreements, indeed very much the contrary. But, the Defendants seek to avoid their liability to pay the costs of repairs and hire (which were met by the credit hire providers) by asserting that the hire agreements, to which they were strangers, are unenforceable by the hirers against the claimants and therefore that though the hire and repair costs have been met they should not pay them. "The solicitude of the Defendants and their insurers for the interests of their potential opponents may fairly merit a measured, if not sceptical regard" -per Mustill L J in Giles –v- Thompson [1994] 1AC 142 AT 165.
    
    
65. It is perfectly appropriate and proper for defendant insurers to seek to avoid unreasonable hire and repair charges. Here they seek to avoid paying them at all, though these are charges, which if reasonable and incurred directly by the claimants, the defendants would clearly have been obliged to pay. Furthermore it is virtually certain that they would have had to pay them if the claimants had themselves not sought to question the validity of the credit agreements, and paid Helphire before seeking recovery from the Defendants. For these reasons although the House of Lords in Dimond –v- Lovell held of course that non-enforceable agreements gave claimants no rights of recovery against tortfeasors, I do not regard it as obvious that public policy necessarily requires Courts to scrutinise the agreements here with the rigour, suspicion or hostility that is being urged by the Defendants. They are not concerned at all with the protection of the consumer/claimants, but rather with finding a means of reducing the liability of tortfeasors and their insurers for the consequences of their negligence. There may be a distinction between the approach to be adopted where one party to an agreement is trying to take advantage of another who will suffer a detriment if a pretence is effected, where public policy would certainly require careful if not sceptical investigation, and a situation where the arrangement is not to the detriment of any of the contracting parties and thus can be said to be benign. The consumer credit legislation is not aimed at protecting people from being able to obtain free car hire and repairs, and the Helphire set up, however complex and opaque, cannot realistically be presented as detrimental to the Claimants.
    
    
66. Against that background, I consider the Defendants contentions, really encapsulated by Mr Mclaren when he said that there is in effect long term credit, not short term exempt credit because there is never any true payment. The Claimant never pays and Angel never 'truly' pays.
    
    
    
67. It is clear that the Court must look at the substance and not at the manner in which the parties have chosen to describe or characterise what has been done. To take a simple example, has a license been created, or is it a lease camouflaged as a license. 'Where the language of license contradicts the reality of lease the facts must prevail' per Lord Templeman in Antoniades –v- Villiers [1991] 1AC 417 at 463. Secondly, the Court should look to see whether what has in fact and in substance been created is something which is within or without a particular statutory provision. To pursue the Landlord and Tenant analogy, if it is indeed a license, the restrictions and protections that the rent Acts apply to leases, will not apply. If it is a lease they will. Next, it is important to keep in mind the distinction between doing something which the law prohibits, which the Courts will not allow, and doing something which the law allows, which the Courts should not thwart. Thus to take the consumer credit legislation, the law allows people to enter into exempt agreements (see the Consumer Credit Exempt Agreements Order 1989). This means that the law allows agreements to which the requirements of the legislation do not apply, though it prohibits contracting out of agreements to which the legislation does apply: (S 173 Consumer Credit Act 1974)
    
    
68. The submissions based on Ramsey, Antoniodese, Bankway, and other cases invited the Court to give detailed consideration to the circumstances surrounding the agreements, and in particular to the subsequent acts of the Helphire group. Lord Jauncy observed in the Antoniades case (supra, at 475 E) "although the subsequent actings of the parties may not be prayed in aid for the purposes of construing the agreements, they may be looked at for the purposes of determining whether or not parts of the agreement are a sham in the sense that they are intended merely as dressing up and not as provisions to which any effect would be given", and Arden LJ in Bankway, dealing at 1380 with a "variant on the usual definition of sham where the question arises whether an agreement is not intended to have the effect stated and is intended to evade the operation of an act out of which the parties cannot contract", said that 'for this purpose the Court can look at all the relevant circumstances.' When she looked at those before her she found a clause which, "masqueraded as a provision for an increase in rent" but was not one in substance (1383H). It was, she felt "an improper attempt to evade the mandatory scheme for security of tenure out of which the parties cannot contract".
    
    
69. The starting point in cases of this kind in my judgment must be to commence with the documents and find out what properly interpreted is their legal effect, not to start with the background and say "this looks suspicious so let us approach the agreement in that frame of mind." To much emphasis should not be placed upon the fact that provisions of an agreement may not be enforced. Many agreements are entered into with the parties fully expecting that the contracts or clauses in them will never be activated; guarantees are one example, many clauses in leases are another. An agreement can be a perfectly valid agreement though compliance with it be waived. And as Lord Nicholls observed in Macniven –v- Westmoreland [2001] 2 WLR 377 at 381 "the paramount question always is one of interpretation of the particular statutory provision and its application to the facts of this case." Lord Hoffman said, at 386 "there is ultimately only one principal of construction namely to ascertain what parliament meant by using the language of the statute." Later at 397 when citing his judgment in Norglen –v- Reeds [1999] 2 AC at 1, 13 he said "I do not think it promotes clarity of thought to use terms like strategy or device. The question is simply whether upon its true construction the statute applies to the transaction. Tax avoidance schemes are perhaps the best example. They either work, Inland Revenue –v- Duke of Westminster, or they do not, Furniss –v- Dawson. If they do not work the reason as my noble and learned friend Lord Steyn pointed out in Inland Revenue Commissioners –v- McGucklan is simply that upon the true construction of the statute the transaction which was designed to avoid the charge to tax actually comes within it. It is not that the statute has a penumbral spirit which strikes down devices or stratagems designed to avoid its terms or exploit its loopholes".
    
    
70. It is entirely legitimate to enter into exempt agreements under the Consumer Credit Legislation; Parliament so decided. If the Helphire agreements are indeed exempt agreements under the Consumer Credit Legislation, then the fact that Helphire may not, or does not, conscientiously enforce its terms, (as for example by requiring payments in accordance with the provisions of the agreement) does not affect the validity or nature of the agreements. It is always open to a party to waive compliance with the terms of its contracts.
    
    
71. Helphire clearly does wish to avoid entering into regulated Consumer Credit Agreements. Why? No witness in this case or in any of the cases I have tried has ever come to explain. Thus it is presented by the Defendants as a somehow sinister, disreputable or suspicious objective. Mr Tilley the Helphire executive called to explain the schemes in the instant cases had no real answer to the question. But Mr Milligan in his final submission suggested (or rather stated explicitly) that there were three reasons. Firstly if the agreements were not exempt there would then be the need for the provision of a cooling off period and if this was available people might sign on, take the benefits in terms of a repaired car and substitute car and then excuse themselves from the agreements altogether. Nothing would be recoverable from them if this happened, the schemes would not of course be viable at all and would not exist. Secondly, those who referred Claimants to Helphire would probably need a credit license, unlikely to be available to the average garage. Thirdly there would probably be a need to fill in the hire charges which may not be readily ascertainable in advance. These do not seem illegitimate reasons to seek to take advantage of an exemption which parliament has provided.
    
    
PRETENCE: ANALYSIS


72. I will deal first with the no true payment submission central to the contention of pretence. I bear in mind that Arden LJ indicated in Bankway at 1383 that "the question whether a document is a sham or a pretence or in substance an unlawful contracting out or an evasion of an act of parliament is a pure question of fact".
    
    
73. Central both to the scheme and to the Defendants submissions is whether the Angel batch payments were true and sufficient to extinguish the Claimants liabilities to Helphire under the agreement or mere pretences. The Defendants said that they were merely "transfers" with no discharge of a debt, the snapshot of a moment in a meaningless, deceptive and incestuous circulation of internal group funds. They contend in effect that one part of the group must be paying Angel, Angel pays another part of the group and Albion, Europ and the Claimants pay nobody and nothing appears to be appropriately reflected in such accounts as have been seen. Mr Milligan says that manifestly they are true payments; cheques were written, presented and met. What the source of the money to enable them to be met was, is, he suggests, irrelevant. It may have been internal group transfer, bank borrowing, premium income, some other kind of support or various combinations of these, it does not matter.
    
    
74. I think this submission is correct. In Macnivon –v- Westmoreland [2001] 2WLR 377 HL Lord Hoffman said this "Payment of a debt... ordinarily means an act, such as the transfer of money, which discharges the debt... [it is not contended] that payment must involve a negative cash flow which is not compensated by a cash flow in the opposite direction... many commercial refinancing operations discharge old debts and create new ones without any cash flow either way". In the instant case cheques, valid instruments, were drawn and met. There must have been a payments out from Angels bank account and into Helphire UK or Helphire Finance's accounts. I accept the Defendants' submission that there may have been some other corresponding or sufficient money moving to Angel which we know nothing in any detail about and that the published accounts were not to a layman obviously consistent with the payments. But so long as Angel (the drawer of the cheques) and its payees were separate legal entities, even if as was the case closely associated and compliant with each others desires, I do not think that that can matter. One was paying another. Furthermore, the payments having been made either to Helphire the prima facie creditor, or at its direction to Helphire Finance, it is inconceivable that the Claimants could ever have been sued upon the agreement. So their debts were effectively discharged.
    
    
75. Thus I find on the material available in this case that there were valid payments by Angel.Though it may be that accountants given access to the internal accounts of the companies in the group might have some very interesting things to reveal.
    
    
76. Mr McLaren conceded that the absence of a valid payment was central to his submission on pretence, I am not sure that Mr Flaux made a similar concession.
    
    
77. Other aspects of the pretence relied upon include the fact that the various stages were pre-ordained or programmed (they were), that misleading documents were produced (they were), payments were represented as having been made before they had been (which is true), and that payments were not in fact made within the time stipulated in the agreements (which is also true). Furthermore it was said that the whole insurance arrangement was artificial and bizarre because the nominal insurer received negligible premiums and made no payments. Mr Flaux submitted that the arrangements were such that there was no "real requirement" upon the Claimants to pay within 12 months.
    
    
78. All these contentions were skillfully and powerfully made but they show to my mind not a masquerade or impermissible pretence to camouflage what was in reality a non-exempt agreement but a complex, artificial and sloppily executed and enforced scheme which was none the less based upon prima facie exempt agreements and not a mere pretence. The documentation did impose a real requirement to pay, though Helphire did not enforce it, and the insurance arrangement (artificial though it was) provided the Claimants with the wherewithal to pay.
    
    
79. I do not therefore find unenforceable pretence here. But Helphire, given its complex and caliginous arrangements, can hardly be surprised that the Defendants have sought to invoke and utilise the penumbral spirit of which Lord Hoffman spoke.
    
    
CONSUMER HIRE AGREEMENTS


80. It is now appropriate to consider whether the agreements were exempt or regulated. A point not taken in Dimond –v- Lovel) is whether these agreements were consumer hire agreements under section 15 of the 1974 act. If they were, then it is agreed that there is no relevant exemption and so they must be regulated agreements. Section 15 of the Consumer Credit Act provides as follows:
    
    
81. "A consumer hire agreement is an agreement made by a person with an individual (the hirer) for the bailment of goods to the hirer, being an agreement which: (a) is not a hire purchase agreement and, (b) is capable of subsisting for more than 3 months and, (c) does not require the hirer to make payments exceeding £25,000.00. A consumer hire agreement is a regulated agreement if it is not an exempt agreement".
    
    
82. The vehicle hire agreements in the present cases provided at condition 3 "that the period of hire shall.... In any event not exceed 12 weeks". Thus limiting the period of bailment to less than three months. But the liability to pay crystalised substantially later than three months. Thus it is submitted that the agreement itself is capable of subsisting for more than three months.
    
    
83. The question is whether the three month restriction applies simply to the bailment or to the duration of the whole period during which the credit and other provisions of the agreement remain effective. One might have expected that nearly 30 years after this act was passed the answer would be entirely clear. Mr Milligan submits that it is. He says the definition is directed to the period of bailment and relies upon the authority of Dimond –v- Lovell and that of Professor Goode.
    
    
84. In Dimond the court was dealing with an agreement which provided the "maximum rental period of this rental agreement must not exceed 28 days". The Vice Chancellor said at [2001] 1 QB 227 "It is beyond question an agreement for the bailment of goods to the hirer but it is not capable of subsisting for more than three months, condition 19 limits its duration to 28 days. So the agreement is not a consumer agreement under section 15." Later he said at 232 "It would also have been a consumer hire agreement if it had been capable of lasting more than three months". I am urged to take the view that these observations were obiter and need not be followed, and that the section clearly envisages limitation of the agreement as a whole and not simply the bailment. It is said that the Vice Chancellor had simply not applied his mind to this. I note that in Khadim –v- Brent [2001] 2 WLR 1674 Buxton L J at 1684 said, " We therefore conclude, not without some hesitation that there is a principle stated in general terms that a subsequent court is not bound by a proposition of law assumed by an earlier court that was not the subject of argument before or consideration by that court."
    
    
85. Mr Flaux says that if the bailment only was to be restricted, 15.1(b) would read "is for bailment for a period of more than three months" and that the words of the section are clear. I was at first attracted to the argument that the words are perfectly clear but on more prolonged reflection than is possible when Counsel are moving swiftly through more submissions than there is comfortable time for I find the contention less obviously good. Inserting the preliminary words directly before sub section b produces "an agreement... for the bailment of goods to the hirer... which is capable of subsisting for more than three months". On that basis the clause "capable of subsisting for more than three months" could be said to qualify bailment, though it would certainly read more felicitously with an indefinite article before bailment.
    
    
86. I was referred to an edition of Professor Goode's work in which at 456.3 he states "Section 15.1(b) is plainly referring to the duration of the agreement as it applies to the bailment of the goods".
    
    
87. Confronted with concurring opinions from the Vice Chancellor, who even without the benefit of submissions, was certainly considering the point, and from an authority whom the Vice Chancellor has called when disagreeing with him on another topic an "acknowledged master of the intricacies of consumer credit control", I think it would be inappropriate for me at this level to differ from them both. I therefore follow and apply what Sir Richard Scott said. I find that these agreements are not consumer hire agreements within section 15 of the act.


EXEMPT OR NOT?


88. It is now necessary to consider the other almost traditional arguments put forward about the interpretation of the credit agreements in order to decide whether they fulfill the requirements of the consumer credit exempt agreements order 1989. If they do not then they are unenforceable (unless an enforcement order were to be made). If they are unenforceable than neither the Claimant hirer nor anyone exercising rights of subrogation can recover from the Defendants in respect of the charges due Dimond –v- Lovell [2000] 2 WLR 1121 HL.
    
    
89. Clause 3.1 of the order which governs exemptions provides so far as relevant that "the act shall not regulate a consumer agreement which is an agreement of one of the following descriptions that is to say; a debtor/creditor supply agreement being either: 1. an agreement for fixed sum credit under which the total number of payments to be made by the debtor does not exceed 4, and those payments are required to be made within a period not exceeding 12 months beginning from the date of the agreement" .
    
    
90. Thus to qualify both stipulations must be met. The Defendants argue that neither is. First it is said that the credit agreement is not one under which the total number of payments to be made does not exceed four. This is a contention which I dealt with in Seddon –v- Tekin and Dowsett –v- Clifford where the agreements were in similar form. I said this at page 40, "It seems to be clear that the agreement in the instant case does not envisage instalment payments, it envisages a single payment of hire charges 'in full', though there are different possible moments when it might be due; on the happening of any of the events in clause 10, if the claim has been concluded by the third party paying up, or at the expiry of 26 or 51 week credit periods. I think that what clause 9(5) was intended and is apt to deal with is a situation in which a third party tortfeasor or his insurer sends a cheque to Helphire with the hirer claimant as the payee. The use of the plural 'cheques' does not in my judgment amount to making provision for multiple payments exceeding four. Clause 9(6) is a perfectly straightforward stipulation again not making payment for multiple payments, merely stating that if a Claimant is sent the hire charges direct he must send them on to Helphire.
    
    
91. "A hirer would no doubt be free to proffer early payments as and when and as often as he chose, if for some unlikely reason he might want to, and indeed, Helphire might accept such voluntary payments. That does not alter the nature of the agreement itself which is one which provides for one payment. It is thus in my judgment within the exemption 3(1) of the order., Likewise if payment should be accepted as an indulgence outside the period stipulated in the agreement that does not alter the nature of the agreement, nor its qualification for the exemption either. It merely shows that in a particular case Helphire did not insist on enforcing its terms, and a party to a contract may always do that. Subsequent conduct does not change the categorisation of a contract from what it was when it was made."
    
    
92. I adhere to what I held on that occasion notwithstanding Mr Flaux's reference to Council directive (87/102/EEC). The agreement envisages payment in one go. The combination of clauses is in my view reasonably clear and it is not providing for a total number of payments to exceed four. Note for example clause 3, "the credit period expires when the claim has been concluded either by completing negotiations or by a decision of the court. At that point you will be liable to pay Helphire's hire charges"; Clause 10 "the credit period shall expire in any event 51 weeks from the date of the agreement. At the expiry of the credit period you shall then become liable to pay the hire charges in full". Those are simply not provisions providing for multiple payments.
    
    
93. The Defendants second argument, is that the stipulation in the order that payments are "required to be made within the period of 12 months," is not met by the contractual provision in (Clark and in Sen) that at the expiry of 51 weeks "you shall then become liable to pay the hire charges in full." It is contended that "liable" does not mean the same as "required to". It is argued that before the charges are payable under the agreement there would need to be a demand for them. Mr Flaux submitted that there can be a notional liability before there is a requirement to pay and that after a liability arises a reasonable time, not less than 14 days,must be permitted before the consumer can be required to pay. Mr McLaren argues that the word 'liable' is used only to devote a possibility rather than a requirement within the 1989 order. Both he and Mr Flaux observed the use of the words in clause 11; "you would be liable for the costs involved in obtaining the opinion and be required to pay... within seven days of being notified of them". These arguments are again similar to those advanced in Seddon –v- Tekin before me last year in which I said this. "It should no doubt be kept in mind and I do that the legislation of which the order forms part is for consumer protection, and that contract was drafted by or for a commercial enterprise with the putative objective of achieving exemptions, so the approach to interpreting the requirements of the act and whether the provisions of the contract fulfilled them should not be too indulgent. Clause 14 of the contract could certainly have been drafted in more imperative terms such as were used elsewhere. Thus in clause 10 "you will pay the whole of the charges immediately if demanded" and in clause 9.6 if the hire charges are paid to you then you will pay them to Helphire immediately..." In argument various principles of interpretation were identified and deployed. For example the Defendant said that this was the sort of contract to be interpreted where ambiguous contra proferentem, and Mr Williams amongst other things urged that where two constructions are plausible the court should lean to the construction which validates the instrument. But the starting point in construing a contract is not to hold a tournament between rival maxims, it is that words are to be given their ordinary and natural meaning. Liable is a word which in common speech is capable of being used in at least two senses. One of its meanings is "bound or obliged by law", that is one of the definitions in the shorter Oxford dictionary. In that sense the expression "liable" would certainly suffice, for the hirer would be bound or obliged by law to pay in full at the expiry of 51 or 26 weeks, that would meet a provision that payments are required to be made within 12 months.
    
    
94. "There is another possible meaning, that of expressing a contingent or potential obligation which one might be called upon to fulfill, in that sense the meaning of 'liable' is 'obliged if asked'. Thus in times of conscription a man might be liable for military service though under no obligation to attend until actually called up. A tax payer is liable to taxation in the sense of being subject to it, but usually under no obligation to pay until the sum is demanded. There are liable persons for the purposes of child support and excise regulations; people under a duty to pay when told to do so, and guarantors who are liable (or more accurately potentially liable) under guarantee and are not required to pay until money is demanded. Someone on a jury roll is liable for jury service but he may well avoid it.... Thus liable as a word on its own does not necessarily have only one meaning. The word must however be looked at in the background in which it appears, in a contract setting out obligations to pay. The courts task is to "ascertain the meaning which the document would convey to a reasonable person having any background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract... The meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean". Lord Hoffman in ICS –v- West Bromwich [1998] 1WLR 896 at 912.
    
    
95. "The background here involved three documents: a hire agreement stating that unless the credit hire agreement had been entered into hire charges were payable at the commencement of he hire and otherwise on demand, the credit hire agreement itself which states that the credit shall expire in any event 26 weeks or 51 weeks from the date of this agreement and "at expiry of the credit period you shall then become liable to pay in full", and the insurance policy which states "as Helphire costs had to be paid within 26 or 51 weeks in any event we will pay them if your claim has not been completed by then".
    
    
96. "The background is thus unambiguously that of a contract with stipulations about when payment is due. It is a background in which a period of credit is both extended and bounded. I think in that context looked at in a straightforward way by a reasonable eye and not that of a lawyer sedulously seeking out possible ambiguities clause 14 is to be read as meaning that payment is due 26 or 51 weeks from the date of the agreement and that "liable" in this context means in simple lay terms "you must pay then" and not "at that time we can ask you to pay and you must do so later". In my judgment a hypothetical reasonable person reading the stipulation "you shall then become liable to pay in full" would understand that to mean that he was required to pay then and not that he may then be asked to pay thereafter".
    
    
97. "This approach also accords with the nature of credit. In the Court of Appeal hearing in Dimond –v- Lovell [1999] 3 WLR 561 the Vice Chancellor referred to Grant –v- Watt in [1999] STC 330 and cited Pumfrey J where he said "credit is granted where payment is not demanded until the time later than the supple of services or goods to which the payment relates. Credit is the deferring of payment of a sum which in the absence of an agreement would be immediately payable". And he said that he entirely agreed with this. Thus at the end of 51 or 26 weeks credit expires and the charges are immediately due, and due without further demand or particularisation. The hirer if he doesn't know what they are can always ask.
    
    
98. "The Vice Chancellor also said when considering article 3 of the 1989 order "Hire companies can prevent [consumer credit agreements] from being regulated agreements by limiting the period of credit to a maximum of 12 months ([1999] 3 WLR 571). He added nothing about having explicitly to ask for payment within that period although it is to be observed of course that Sir Richard Scott was not dealing with this particular argument when he said what he did."
    
    
99. "The conclusion that I reach is also consistent with the general rule of law that payment under a contract is due without demand (see for example Treitel on the laws of contract 10^th edition 1999) Though the matter is of course one ultimately of what the contract actually provides."
    
    
100. There is no doubt that this is not an entirely felicitously drafted agreement, and the Defendants arguments are not devoid of ammunition but I have not been persuaded that my former conclusions were wrong. I note the differential use of 'liable' and 'required' in paragraph 10 of the agreement. That clause is doing two things: indicating that Counsels opinion is something that the customer has to pay for not Helphire, and telling him when, viz, in advance and within seven days of being told what they are. It is perfectly clear. So too I think is paragraph 14. It is stating in effect that the charges are to be paid by the customer in full at the expiry of the credit period, and would so be understood by the parties or by a spectating reasonable man.
     
     
101. I was somewhat troubled by the point that the Claimant might not know how much to pay if no formal requirement or demand was needed. Mr Flaux submits that there can be no realistic requirement to pay because the hirer having signed a blank agreement could not and would not know how much he was required to pay. But there are two answers to this. The letters sent out asking whether the Claimants wished to claim (in Mrs Clark's case the one she signed on 27^th January 2000) did specify the amount due. Secondly it was open to a claimant to ask if uncertain.
     
     
102. Reliance was also placed by the Defendants upon Ketley –v- Gilbert [2001], but I do not find that case of assistance here. It was concerned with whether a contractual provision to pay "on the expiry of 12 months" complied with the legislative stipulation that payments were required to be made "within a period of 12 months beginning with the date of the agreement" which it did not, by one day. In any event I do not see why 14 days should be allowed as contended by Mr Flaux and anything less than six or seven would still be within the period specified by clause 3 of the order.


MODIFICATION


103. A further point was made that in the case of Dr Sen there was a modification of his original agreement. The argument was that he first entered into an oral agreement which would have been regulated, and then subsequently into a written modifying agreement in terms drafted to achieve exemption. This would not be effective by virtue of the provisions of section 82.3 of the Consumer Credit Act which provides that "if the earlier agreement is a regulated agreement but (apart from this sub section) the modifying agreement is not then... It shall be treated as a regulated agreement". I think Mr Flaux made this submission with a little less than his normal high level of conviction and I accept Mr Milligan's submission that it is not sound. There was no sufficient concluded contract before the signed agreement. What was done before then was undertaken in expectation and anticipation of the signed agreement.
     
     
104. Accordingly I find that these agreements were exempt agreements and are not to be set aside for failing to achieve exemption.
CONSIDERATION


105. I next consider arguments relating to Mrs Clark that there was no effective policy of insurance at all. Firstly because she paid no premium nor gave any other consideration (similar arguments apply to Mr Denard), and secondly because the policy expressly provided that the incident giving rise to the claim had to have taken place during the currency of the policy, which it did not.
     
     
106. Conventionally the consideration for a contract of insurance is a money premium, and certainly Mrs Clark's Angel policy specifically envisaged this, for one of the definitions it provided was as follows: "you yours – the person who has paid the premium". Furthermore the insured person was defined as "you and any other person authorised by you to drive or to be a passenger".
     
     
107. Mr Milligan argued that consideration need not be financial. He cited the judgment of Channel J in Prudential Insurance –v- IRC [1904] 2 KB 658 "A contract of insurance... must be a contract whereby for some consideration, usually but not necessarily for periodical payments called premiums...". He urged that consideration could be found in the instant case in the obligation or undertaking to "co-operate fully" in the specified ways as provided for in the conditions.
     
     
108. But that obligation is headed 'you must', and the 'you' is the person who has paid the premium. Mrs Clark did not pay the premium and therefore by the terms of the contract itself the obligation to co-operate or the consideration of co-operation cannot be said to apply to or to come from her. I am not indeed at all sure that Mrs Clark had any intention to create relevant legal relations either.
     
     
109. Secondly it was an expressed term of Mrs Clark's contract that the insured incident must involve an accident which "must have occurred...during the period of insurance". What purports to be Mrs Clark's policy cover was said by Angel in it's schedule of cover to commence on the 12^th of May 1999. Mrs Clark's accident happened on the 2^nd May 1999 outside the period of cover. Mr Milligan sought to argue that this inconvenient provision could be disregarded as obviously not what the parties had in mind when they entered into the agreement. He relied upon some of the observations of Lord Hoffman in ICS –v- West Bromwich [1998] 1WLR 8896 at913 where he said "If one would nevertheless conclude from the background that something must have gone wrong with the language the law does not require judges to attribute to parties an intention which they plainly could not have had." Thus says Mr Flaux both sides to the agreement must have meant the clause to say something which would cover what had happened. What ever may have been Angel's intention, which presumably must have been to issue a post-incident policy, I do not think such an intention can very readily be attributed to Mrs Clark since she seemed to believe that all she was doing was signing something appertaining to the provision of a courtesy car, not entering into an insurance policy at all. Accordingly in Mrs Clark's case I hold that there was no valid policy of insurance. This is probably why Helphire was reluctant to have this case tried.
     
     
110. Mr Denard too paid no premium. It appears that the only mention of the word premium in the Europ policies is under condition 2f whereby Europ "may pay any cheques made out in your name into our bank account if they include any premium due..." But the agreement between Europ, Angel and Helphire certainly envisaged and made provisions about financial premiums and did not apparently envisage any other kind of consideration. I do not think that the token amount paid by A-Plan can constitute Mr Denard's consideration on normal principles, and so in Mr Denard's case too I conclude that there was no adequate consideration passing from the insured to the insurer and thus no valid policy of insurance , and thus the payments made by Europ fall into the same category as those by Albion in the Clark case.
     
     
111. In these circumstances Angel's payments discharging the Helphire debt for hire and repair in the cases of Mrs Clark and Mr Denard were not the fruit of a valid insurance policy, and therefore Mrs Clark, Mr Denard and those suing in their names cannot recover in respect of them since it is only insurance payments or the proceeds of benevolence that are exceptions to the rule against double recovery.
     
     
112. Furthermore it might be said that since insurers subrogate by virtue of the contract of insurance and here there was no valid contract then there is no right to seek these sums in the Plaintiffs name in any event. Thus in the Clark and Denard cases the claims for the hire charges fail.


REPAIR CHARGES


113. Does the same apply to the repair charges? In Seddon –v- Tekin and in Taylor –v- Cooke [1999] I found that a century of authority from The Endeavor [1896] 62 LT 840, via Derbyshire –v- Warren [1963] 1 WLR 1069 CA and culminating in James –v- Stroud [1986]1WLR 1141 showed that the measure of damages in cases of damage to property was the diminution in value of the chattel, which was normally measured by, but which was not the same thing as, the cost of repair. Thus the recoverability of the repair charges was irrelevant. The contrary argument was that James –v- Stroud was "impliedly overruled" by Hunt –v- Severs [1994] 2 AC 350 and Dimond –v- Lovell, though it was not mentioned in any of the judgments in those cases which were not dealing with diminution in value claims.
     
     
114. However in Burdis –v- Lidsey 21^st May 2001 Leeds Crown Court Gray J rejected submissions made by Harvey MacGregor QC and held that James –v- Stroud could no longer be regarded as good law. All three leading Counsel in the instant case felt that Burdis –v- Lidsey was authority binding upon me (there is a different view articulated informally to DCJ's by a senior member of the Court of Appeal that it would be persuasive only). In the circumstances, though I retain the view of the law I have earlier expressed, I think that Burdis probably is binding upon this Court and so though I do not agree with it I shall follow it. I understand that it is subject to appeal which might usefully be listed with the appeals in this case if that is possible. Accordingly I hold that neither Mrs Clark's nor Mr Denard's repair costs are recoverable.
     
     
OBLIGATION UNENFORCEABLE BUT VALID?


115. An argument not presented in Dimond –v- Lovell is that even if Helphire was unable to enforce its credit agreements still the Claimants would have a valid obligation to pay Helphire. This emerges from an analysis of the structure of the act, a point dealt with by Sir Andrew Morritt VC in Wilson –v- First County [2001] 3 WLR 42 CA at 52 where he said this. "It is essential... to appreciate that there is nothing in the 1974 act, which prevents an improperly executed regulated agreement from giving rise to contractual rights. Nor is there anything in the act which prevents the right to possess goods pledged as security for the borrowers contractual obligation under such a contract passing on delivery of the goods by the pawnor to the pawnee. The effect of the 1974 act in the present context is limited to restricting the ability of the pawn broker to enforce its contractual rights or to enforce its security as the person in possession of the goods pledged. The point is made by section 65(1) and 113(2) of the act Section 65(1) provides for an improperly executed agreement to be enforced on an order of the court. When the court makes an enforcement order, it enforces the contractual rights under the agreement, subject to the reduction or discharge of any sum payable thereunder... Where following an enforcement order security is enforceable under section 113(2) of the act it is the security that has been provided in relation to the agreement that is enforced. Section 65(1). and 113(2) of the act do not make the rights conferred on the creditor by the agreement or by the delivery of the pawn unenforceable. Rather, those sections recognise that those rights exist and are enforceable but enforcement is made subject to judicial control". He went on to deal with the application of this consideration to the matters in issue in that particular case, observing later at page 53 paragraph 27 "as we have said a proper analysis of the 1974 act does not lead to the conclusion that a creditor under a regulated agreement who fails to obtain a document signed by the debtor which contains all the prescribed terms is without rights. The true analysis is that the agreement, and the delivery of the pawn, do confer rights on the creditor, but those rights are subject to restrictions on enforcement".
     
     
116. Since a valid obligation to pay Helphire exists, albeit unenforceable, it is argued that there is no reason why the Claimant should not recover damages in respect of the cost of discharging the obligation, in reasonably paying a debt. If this was done there would be no double recovery as the Claimant would be accountable by virtue of 9VI of
     
     the Credit agreement and on ordinary subrogation principal.
117. Counsel for the defendants submit that it is inconceivable that the five members of the House Of Lords in Dimond would not have understood the difference between a void and a valid but unenforceable contract and that they could have left room for the present argument. Indeed Lord Hobhouse at 1139c did carefully say 'the contract cannot be legally enforced' and went on ' I agree with your Lordship that there is no basis for implying an obligation of the hirer to pay contrary to the statute. Nor is there is any basis for the application of some restitutionary of principle'.
     
     
118. Against that background I do not find that the Claimants damages may be recovered by this route.
THE MEASURE OF DAMAGES HIRE CHARGES


119. In Dimond and Lovell, Lord Hoffman indicated [2000] 2 WLR at 1135: "Mrs Dimond acted reasonably ... but that does not necessarily mean that she can recover the full amount charged by First Automotive. By virtue of her contract she obtained not only the use of the car but additional benefits as well... English law does not regard the need for any of these additional services as compensatable loss. As Sir Richard Scott VC said ' Damages for worry and the nuisance caused by having to deal with the consequences are not recoverable' He cited British Westinghouse [1912] AC 673 HL. He went on 'How does one estimate the value of these additional benefits.... It seems to me that prima facia their value is represented by the difference between what she was willing to pay First Automotive and what she would have been willing to pay an ordinary Hire Car company for the hire of the car. As the Judge said, First Automotive charged more because they offered more, the difference represents the value of the additional services which they provided. I quite accept that the value of the benefits which must be brought into account will depend upon the facts in each case. But the principal to be applied is that in the British Westinghouse case and this seems to me to lead to the conclusion that in the case of a hiring from an accident hire company the equivalent spot rate will normally be the net loss after allowance has been made for additional benefits which the accident hire company has provided."
     
     
120. Lord Saville agreed with Lord Hoffman, as did Lord Hobhouse who said "the cost of mitigating the loss of use of her car was about £24 per day." (This was an average I understand of the locally available spot hire rates). He said that another way of looking at the matter was that preferred by Judge LJ in the Court of Appeal "the excess cost was not reasonably incurred as costs of hiring the substitute car," but he said he preferred the approach of making a "commercial apportionment between the cost of hiring a car and the cost of the other benefits included in the scheme."
     
     
121. It is against that background that this Court has to decide what are the appropriate awards in the instant cases. Furthermore as Insurance and Credit Hire providers are understandably anxious to have a straight- forward means of working out recoverable sums I have been asked to give some guidance of general application for the solution of claims of this kind. This I will endeavour to do, though it is expected that the Court of Appeal will have an opportunity to consider the position before very long. In Seddon I said this: "it is clear that car hire rates are remarkably variable things as is widely known, they may change according to location, point of collection, delivery, season, special offers, demand and no doubt for other reasons too.... In any given case no doubt both sides would be able to find figures to suggest that what is claimed is either to high or very modest. If such evidence is to be gathered analysed and argued about in each case of this kind much more effort, time and cost would be devoted to this than is reasonable in what are usually small claims." The evidence provided in the instant cases bore this out. Hire rates appear to be in constant flux. I was told during the course of these trials that the position is so fluid and transient that companies cannot even look up what their rates were for a particular car at a particular place two years ago, which would have been obvious starting point. It is a strange state of affairs, probably caused by the marginal profitability of the hire companies..
     
     
122. There are essentially two problems, firstly, in the light of the majority opinions in Dimond, this Court must accept that a Plaintiff is not entitled to be relieved of the trouble and anxiety involved in hiring and mending cars and litigating against the tortfeasor responsible for the collision. These additional benefits have to be taken into account by way of a reduction. How is this reduction to be calculated? Secondly, if the bench mark is the available spot rate, how is it to be ascertained what the local spot rate is or was at any particular place and time?
     
     
123. One approach to the first problem is to break down and analyse the hire providers own figure. What the car supplied has cost the provider, plus no doubt some reasonable mark up to make it worth while, but without all the other incidental benefits and services. Thus Lord Hoffman said ' the equivalent spot rate will ordinarily be the net loss after allowance has been made for the additional benefits which the accident hire company has provided'. This solution is also perhaps Lord Hobhouse's "commercial apportionment." It is clearly conceptually sound but it is likely to be cumbersome and expensive to work, as it would require detailed discovery and analysis in thousands of small cases where the cost would not be proportionate. For this reason I do not favour it as a practical solution.
     
     
124. The second approach is to make an arbitrary but reasonable discount. In Sedon –v- Teken I suggested the approach common in fatal accident dependency cases, where the Courts adopt the practice of taking a fixed percentage of earnings, commonly two thirds or three quarters. This approach seemed generally just and had the great merit of simplicity, I held that a prima facie deduction of 30% in the Helphire rate seemed appropriate. I believe this approach has been applied in many cases with results acceptable to both sides, but one drawback in this solution is of course that once it becomes known that the courts will discount the sum claimed then the claim may well be increased in a way in which a deceased's past wages never could be. From what I have seen of Helphire's methods of operating it would certainly be capable of building in an increase in order to sustain a discount.
     
     
125. A third solution is to look at actual locally available figures in each case. This is what Lord Hoffman seems to have had in mind in referring to what the Plaintiff "would have been willing to pay an ordinary car hire company," but this leads to the second difficulty. What figures are to be taken and from whom, and should the highest figure be taken or the lowest, or the average and for what sort of car and with what sort of extras?
     
     
126. It should be kept in mind that it is highly desirable in this area, as in most others, to achieve simplicity if this can be done consistent with authority. It will generally be reasonable for a motorist to hire a car of comparable engine size, price, type and prestige viz, like for like, though some drivers will be content with a more modest temporary vehicle than their usual one and this principle might not extend to the highly exotic. In Giles –v- Thompson [1994] AC 2 HL Lord Mustill envisaged at 164 "the hire of a car of the same type as the motorists damaged vehicles".
     
     
127. In the instant cases, expert evidence about hire rates was provided by Mr McClain for Helphire, Mr Mainz for three of the Defendants and Mr Barnet for the other Defendant. Mr Mainz (Forensic Accounting Limited) produced a snapshot of hire rates in January 2001. He was a highly intelligent, fluent and experienced expert witness. His survey included the best-known national companies and a good selection of smaller local concerns. Mr McClain is an ex chief executive of a credit hire company and is now a managing partner for a management consultancy offering specialist support to the "automotive sector", a company which provides detailed monthly rate analysis for the self drive car hire industry. He had not given evidence previously. His survey was largely restricted to national companies A very wide diversity of prices was apparent. For example in Mrs Clark's case Mainz recorded in January 2001 a variation of daily rates for a Vauxhall Vectra of between £26.40 and £65.80. Mr McClain in Sen, for an Astra, found figures varying between £28.00 and £45.00. In Lagden Mr Mainz's figures for a Mondeo 1.8 varied between £12.00 and £50.80. Mrs Clark might reasonably have rung Budget, perhaps believing its name to be an indication of its pricing policy, and have been "willing" in Lord Hoffman's expression to hire a car at £65.80 a day, almost 2 ½ times more than the cheapest available (Euro Drive). Is it appropriate for Helphire to point to this figure, a higher daily rate than its own, as an indication of the appropriate spot rate?
     
     
128. The key to this problem is I think to be found in Pearson LJ's analysis in Derbyshire –v- Warren [1963] 1WLR 1067 CA not a case cited to me in argument. He said "It is important to appreciate the true nature of the so called duty to mitigate the loss... the true meaning is that the Plaintiff is not entitled to charge the Defendant by way of damages with any greater sum than that he reasonably needs to expend for the purpose of making good the loss". This is probably much the same as Judge LJ's test, set out in Dimond in the Court of Appeal at 240 "reduced to a
     single word the test is reasonableness".
     
     
129. So the question is what sum does a Claimant "reasonably need to expend" to hire a substitute car without the credit hire extras? In different circumstances different solutions at different prices may be reasonable. A travelling midwife or highly stretched businessman might have urgent need of a substitute car very quickly indeed and would not be expected to ring round for competitive quotations or to analyse the possible permutations of excess, extra driver, and charging period. But a retired man of leisure, merely wanting to get to the golf course in two days time might reasonably be expected to sit at his desk for half an hour to compare a few rival quotations from companies listed in Yellow Pages.
     
     
130. So insofar as I am being asked to provide a formula by which all cases can be judged I am not sure that can validly be done, since the variation in circumstances will be so infinite. But this conclusion, though it might have appealed to Pontius Pilate, would be of limited assistance to the insurance and credit hire industries, and I think that it is possible to give some guidelines of general if not universal application.
     
     
131. It cannot be right that if there is a local price as high as or higher than the credit hire price then the credit hire price is recoverable, because it includes services the cost of which as explained by Lord Hoffman are irrecoverable. Equally I do not think it proper for the credit companies to be able to point to the highest local price available since it would not generally be necessary to pay the highest local price so it would not normally be reasonable to do so.
     
     
132. Furthermore it cannot be appropriate for insurers to point to the very lowest local price which might have been available because for a Plaintiff to happen to stumble upon the lowest available rate in the lottery that is hire car pricing would be the purest serendipity. This leaves either a band or an average.
     
     
133. A band is not much use as what is wanted is a single figure that compares with the single figure invoiced by the credit hire company, and anyway where is the band to start and to stop? There remains an average. Averages can of course be misleading since a very few very discrepant figures can distort them seriously. Statisticians and actuaries no doubt guard against these dangers with sophistication. But an average can be a useful working tool and an average of 5 – 10 local spot hire rates is in my view going to afford sensible practical guidance as to what local rates were available and thus as to what would have been the reasonable cost of hiring a car during the periods of repair if a victim had done that rather than gone to Helphire. This was what Lord Mustill had in mind in Giles –v- Thompson [1994] 1 AC 142 HL at 164, "Shrewd and experienced insurers will be well equipped with information about local tariffs".
     
     
134. The very process of establishing an average is of course selective since it depends on which individual companies are chosen to take an average from, therefore broadly speaking the larger the range sampled the more reliable the average can be.
     
     
135. The parties' experts produced figures taking into account the costs of an additional driver and with excess waiver, though it was often not possible to get a waiver down to or below £100.00. The evidence of both Mr Mainz and Mr McClain was challenged to some extent, and there was an entertaining clash of wits between Mr Mainz and Mr Milligan in which each acquitted himself with distinction.
     
     
136. One of the many variables in car hire rates is the time of year at which the car is wanted. The hirings in Clark and Sen were in May 1999 and Denard and Lagden were in November of that year. Mr Mainz took most of his figures in January, Mr McClain in July, so nothing coincided. The evidence did not convincingly indicate any significant increase or decrease over the last two years but did indicate that there were seasonal variations, Mr McClain felt rates were higher in May than in June or July and when Mr Mainz took some figures in June 2001 they were 20% higher than the figures he had got for the same car hire in January of that year.
     
     
137. In the Denard case where Mr McClain was opposed by Mr Barnet their figures for a twelve days hire (the Denard period) were very close. Mr McClain had eight companies and averaged out at a daily rate of £29.83 total £357.90 Mr Barnet had four and averaged £32.70 total £392.00. With the exception of one figure there was no great spread either. In the Clark case McClain averaged £45.77, a total of £457.00 Mr Mainz averaged £34.85 a total of £348.53. But when Mr Mainz took figures for late June 2001 they coincided much more closely with £41.65 and £416.00. In percentage terms using the summer figures Mr McClain's figure was some 84% of what Helphire had charged and Mr Mainz's was 77%. Mainz's winter figure was only 64%. In Sen the figures were also quite close: McClain's average for 3 days hire was £38.42 & £115.27 and Mr Mains £34.21 and £105.14, respectively 74% and 66% of Helphire figures. In Lagden too the discrepancies in the average figures were not great, Mr McClain's were of £40.36 £443.93 for 11 days and Mr Mainz was £39.24 and £431.00 or it may have been £36.50 and £401.00 (there was a correction made at some stage in that figure). Both figures were quite close to 70% of the of Helphire sums, Mr McClain being a little the higher.
     
     
138. There are of course difficulties involved in trying to compare excess waiver costs when companies do not quote like for like, and extra driver charges differ sometimes too. Mr Mainz produced for potential general use a countrywide report dividing the UK into five regions and taking a city and two towns in each. This exercise was intended to produce information to which reference could readily be made in other cases to enable a valuation or settlement in present or future claims. Mr Milligan attacked it somewhat, as being based to too great an extent upon the subjective selection of cities towns and individual hire companies, and for other reasons including the effects of brand recognition and availability. However Mr Mainz defended himself adroitly and persuasively, contending that he had no doubt whatever that the outcome was valid and reliable. He pointed out tellingly that his survey covered 56% of all the car hire companies listed in yellow pages for the chosen cities and 68% of all the companies in the chosen towns. The cities he surveyed were London, Birmingham, Manchester, Newcastle and Bristol, in each city there are at least 15 randomly selected companies of which a maximum of five would be nationals. In all 146 companies were sampled, and he said in his report "in order to remove any bias from these choices I recognised from the start of my work that the survey would need to be expanded to cover different cities and towns if it became apparent that there were widely varying vehicle rates in other cities and towns. The results of our survey illustrate that the range of car hire rates for each of the cities and towns chosen for our survey were similar and therefore representative of the country as a whole". These cars he sought rates for were in groups A, B and C, exemplified by a Vauxhall Corsa 1.2, Astra 1.6 and Vectra 1.8, over one day, seven days and 28 days. He excluded extra drivers insurance excesses and delivery but included VAT and insurance. No active negotiation was engaged in and Mr Mainz felt that in consequence of this the rates obtained may in deed be overstated. I am satisfied having heard Mr Mainz who was an impressive witness that the figures he produced are a reliable guide to the reasonable cost of hiring a car for the periods and at the times of the year he dealt with.
     
     
139. I do however think it likely that his January figures are a little low for peak seasons, like May, and if it is desired to have one set of figures applicable in a somewhat rough and ready basis all the year round, then some increase would be appropriate. I have already referred to the fact that Mr Mainz own June figures were 20% higher than his January ones. I think in the circumstances that Mr Mainz' figures plus 10% might reasonably be accepted as a guide for general all round use.
     
     
DELIVERY CHARGES


140. The Helphire rates included delivery charges. Delivery is manifestly a convenience. Many companies do not offer delivery, others do, at widely differing rates. According to Mr Mainz 62% would deliver, the majority of those that did would do so free. But in the light of the Dimond decision I do not think that delivery charges can be generally recoverable in ordinary cases, since convenient delivery is an additional benefit to the use of the car, and going to get a hire car is presumably part of what the Vice Chancellor called the "nuisance caused by having to deal with the consequences of an accident". [2001] 1 QB 216, 219. However, for some people it may be reasonably necessary to have a delivery if for example the victim was handicapped or had no practicable or cheaper way of getting to the car himself. A long taxi ride might cost more than a delivery charge, in which case the latter should be recoverable.
     
     
ENGINEERS CHARGES


141. Helphire abandoned its claims for engineers/assessors charges without explanation. Clearly on the evidence in some cases where there was only light damage the engineers employment served no purpose other than to provide a profitable turn for the Helphire subsidiary which furnished them. But they are commonly a feature of this type of litigation. I dealt with this in the Seddon –v- Tekin case, at p 64 in the following way "Is it a recoverable head of damage at all or is it one of the additional benefits referred to by Lord Hoffman, I think it is the latter. It is saving the Claimant the trouble of taking his car round several garages in order to get competitive quotations and so decide whether the price at which the car is mended is reasonable. Accordingly on the authority of the majority in Dimond I hold that the cost of a repair assessor is non recoverable." I adhere to that view.
     
     
THE IMPECUNIOUS HIRER


142. There will be some motorists who are too poor to be able to afford to hire a replacement car at commercial rates, Mr Lagden was such a person. For such people hiring on the spot market is not an option. Mr Lagden had no other choice and could not obtain a Helphire package without extra benefits. It was therefore in my view reasonable both for him to take the package, and that the total sum should be recoverable. To allow recovery of a greater sum than was strictly necessary to rent a car is in these circumstances as legitimate as allowing the degree of betterment that there is in repairing or replacing new for old, when this is all that can practicably be done. I would again refer to the passage in the citation of Pearson L J in Derbyshire –v- Warren [1963] 1 WLR 1067 CA; "the Plaintiff is not entitled to charge the Defendant by way of damages with any greater sum than that which he reasonably needs to expend for the purpose of making good the loss". If an impecunious Claimant can only get himself a replacement car as part of a credit hire package then he reasonably needs in my judgment to expend the sum which that package costs.
     
     
143. The Court in Dimond –v- Lovell did not specifically consider the position of the impecunious victim and in those circumstances I see no impediment to my finding that where a Claimant like Mr Lagden has no other cheaper way of getting himself a replacement car than via a credit hire scheme then the full reasonable costs of such a scheme are recoverable. It would of course be open to the Defendants to argue that there were other rival credit hire schemes which charged less than the one that he had chosen.
     
     
THE REPAIR WHICH TAKES TOO LONG


144. Mr Denard's case gives rise to two other points. the garage took longer than it should have, though the Claimant had acted reasonably in going there. How is that to be approached? Repairers will normally contract on an implied term to do the work in a reasonable time. If they do not complete within it that may be because they are themselves at fault as in Charnock –v- Liverpool Corporation [1968] 1WLR 1498 CA, or because they are let down by others, for example a parts supplier. On one analysis the added expense from the delay is caused by the supervening fault of a party other than the tortfeasors. Another way to approach this problem is to take the view, as sometimes happens in personal injury cases, that inexpert treatment which lengthens recovery does not break the chain of causation of the loss. It is the kind of thing which may happen.
     
     
145. In my view the sensible and proper approach is to say that the Defendant should be responsible for the cost of a repair of reasonable length appropriate to the damage and for consequential hire of similar duration. If repairs should reasonably have been completed, objectively looked at, in five days but were not, then the Defendant should not have to pay for costs caused by a longer duration since these were not caused by him but by someone else. That means that in Mr Denards' case the award in respect of the car hire should be 5/12's of the sum I mentioned earlier namely £143.00.
     
     
DIFFERENT CARS


146. The second issue which Mr Denards' position gives rise to is this, his car was a sports car and it is clear that had he gone into the market to hire a sports car he would have been charged a rate well in excess of what he actually was charged for the saloon vehicle that he took. In those circumstances can the Defendants say that there should be any deduction on the credit hire costs when the credit hire costs were in all probability less than what would have been the spot hire rate for a sports car? I think the answer is that had Mr Denard decided that he must have sports car to replace his damaged sports car he would have been entitled to have done so, but since he did not then he is entitled merely to the appropriate costs for the type of car which he decided to accept, and that must be in the light of Dimond not the credit hire cost but the spot hire cost.


THE SOLUTIONS IN THE PARTICULAR CASES


147. Messrs Mainz and McClain cannot perfectly be compared save in the Clark case since their figures were taken at different times, Mr Mainz' figures were based on a larger sample and included the local providers, to this extent his figures are a little more valuable.
     
     
148. Had it been appropriate to make an award in the Clark case I think that the fair solution would simply have been to average the June figures of McClain and Mainz (that is to say £457.00 and £416.00) which would produce an average of some £436.00, with no allowance made for delivery. The tenday period was in any event too long. On Helphire's own engineers evidence the repair should have taken five day so £436.00 would be halved to £218.00.
     
     
149. Likewise in the other cases the difference between the rival figures are not very great and I think that an average between the two authors would produce a just outcome. This means that in Denard I would have averaged £357.00 and £333.00 to produce £345.00. In Sen £115.00 and £105.00 produces£110.00. I award the impecunious Mr Lagden £659.76.
     
     
150. Since there will be no recovery in Clark and Dennard, the only material figures are those for Dr Sen and Mr Lagden, to which need to be added their repair costs, which are not in dispute, namely, in Sen £383.40, and in Lagden £1020.00.
     
     
151. Thus there will be judgement for Dr Sen for £443.40 and Mr Lagden for £1679.76. There will be judgement for the Defendants in the case of Clark and Dennard.
     
     
152. I give leave to the losing parties to appeal, and direct pursuant to CPR 52.14 that the appeals be direct to the Court of Appeal.


INTEREST


153. The Claimants themselves have paid nothing ( or in two cases £10.00 for an insurance policy) and have never been out of pocket. However, the Helphire insurance arrangements – in practice Angel – has paid the independent garages for the car repairs, and other Helphire companies in respect of the hire provision.
     
     
154. In Cousins –v- D&C [1971] 1H11ER 55 CA Widgery LJ said at 58: "n matters of discretion such as the award of interest, I think it right that the Court should look at the reality of the matter and should take note of the right of the parties under any relevant insurance cover if this is neccesary in order to do justice," and at 59 "the exercise of its discretion will depend on whether the interest remains in the Plaintiffs pocket or can be claimed by the insurers." He concluded at 59, that "interest could have been claimed by the insurers as against the Plaintiff, and therefore that it was recoverable." Davies LJ in the same case, said at 60 "the only substantial argument put forward by the Defendants was that, since the insurers only take by subrogation such rights as the Plaintiffs themselves enjoyed and the Plaintiffs having been paid out had no right to claim interest, therefore the insurers could not claim interest for the period after the date of payment to the assured: but that proposition cuts at the root of the whole principle of subrogation. If it were right, it would prevent the insurers, after indemnifying the assured, from recovering the amount of the cost from the wrongdoer who had caused it, which they admittedly can. The truth of the matter is that the insurers after indemnifying the assured have the right to sue the wrongdoer in the name of the assured in order to recover the amount of the loss, there goes with that right the ancillary right to ask the court in its discretion to award interest." Karminski LJ at 61 said the insurers "should recover interest for the period during which they have been kept out of their money."
     
     
155. In Giles –v- Thompson [1994] AC 142 at 168 Lord Mustill said this of the award of interest "The exercise of the right should correspond with reality." In that case there was no liability to pay the hire charges until judgment was given.
     
     
156. It seems to me that in reality from the time Helphires arrangements paid out to the repairers, Helphire has been standing out of its money. It brings these claims by subrogation and should be entitled, on the principles set out in Cousins, to claim and be awarded interest on the sums it has paid (which was not in the case of the repairs the full price but the factored price).
     
     
157. The position is slightly less clear as far as the car hire is concerned because there the payments seem to have been made from one company in the Helphire group to another. But if it is accepted (as I have) that despite the artificially of what was being done, nonetheless true payments were being made by Angel, then there is no reason why the same principle should not apply.
     
     
158. There is of course no doubt that as far as the Defendants are concerned, if the claimants had paid for the car repairs and hire themselves they would clearly be entitled to interest. I see no reason in principle or in commonsense why the Defendants should be relieved of that liability because the claimants have arragned the repairs and hire via Helphire.
     
     
159. Accordingly, I find the position analogous to that in Cousins, and would award interest, in the cases where the claimants succeed, from the dates upon which the payments in respect of repair and hire were made.