NEW RULES COMING INTO FORCE: PLEADING SPECIFIC ISSUES IN RELATION TO THE HIRE OF A REPLACEMENT VEHICLE

The 113th update to Practice Direction Amendments comes into force on the 6th April 2020. It introduces new, and quite specific, obligations on a claimant claiming the cost of a replacement hire vehicle.

THE NEW RULE

There is a new Paragraph in PD16 – this imposes requirements in relation to the way a claimant’s case is pleaded.  It may well be prudent for anyone drafting such pleadings now to bear these requirements in mind.

PRACTICE DIRECTION 16 – STATEMENTS OF CASE

1) After paragraph 6.2 insert—
3
“Hire of replacement motor vehicle following a road traffic accident
6.3 Where the claim includes the cost of hire of a replacement motor vehicle
following a road traffic accident, the claimant must state in the particulars of
claim—
(1) the need for the replacement vehicle at the relevant time;
(2) the period of hire claimed (providing the start and end of the period);
(3) the rate of hire claimed;
(4) the reasonableness of the period and rate of hire; and
(5) impecuniosity (if the claim relates to credit hire).
6.4 In paragraph 6.3—
(1) “relevant time” means at the start of the hire and throughout the period of hire;
(2) the obligation to state the matters there set out includes an obligation to state
relevant facts.”.
2) In paragraph 8.2(8), for “mitigation of loss or damage” substitute “a claim for
mitigation expenditure”.

NOTE THE NEED TO PLEAD “A CLAIM FOR MITIGATION EXPENDITURE”

I have written elsewhere about how the old rule on pleading mitigation of loss did not make sense.   However the new rule does.  It reflects the observations made in a Note to a judgment by the Court of Appeal in Zurich Insurance Plc -v- Umerji [2014]  EWCA Civ 357

“Para. 8.2 (8) of the Practice Direction reads rather oddly in the light of the well-established principle that the burden of proof on the issue of mitigation is on the defendant (see McGregor on Damages, 18th ed., para. 7-019); and we were told by both counsel that in this field it is not generally observed. I can see that it is hard on a claimant to expect him to anticipate and rebut points made about avoidable loss: it seems obviously preferable that he should plead his primary loss, wait and see what criticisms are made, and then if necessary plead to those criticisms by way of Reply. But the position is different in the case of a claim for expenditure reasonably incurred in mitigation of the primary loss. In such a case the claimant should plead his case as to reasonableness, including any assertion of impecuniosity”

 

Paragraph 37 of that judgment is also important:

It also follows from foregoing that I cannot accept the Recorder’s proposition that “impecuniosity-as-it-relates-to-rate” is to be distinguished from “impecuniosity-as-it-relates-to-duration”; and that the burden of proof as regards the latter is on a defendant. As I have already said, impecuniosity is the same concept in either case, depending on essentially the same evidence, and it makes no sense to treat it differently according to the particular head of claim in relation to which it is relied on. I am not sure that the burden of proof is in fact of central importance in this particular case, in view of the fact that an order was made for the Claimant to (in effect) state his case. But I should make it clear that, quite apart from that order, I would regard the burden as being on a claimant to plead and prove his case on this point. The correct analysis would appear to be as follows. A claim for the cost of hire of a replacement vehicle is, strictly, a claim for expenditure incurred in mitigation of the primary loss, namely the loss of use of the damaged vehicle: see the speech of Lord Hope in Lagden v O’Connor at para. 27 (p. 1077H). The burden is thus on the claimant to prove (and therefore plead) that such expenditure was reasonably incurred: see the authorities reviewed by Sir Mark Potter P in Beechwood Birmingham Ltd v Hoyer Group UK Ltd [2011] QB 357, at paras. 25-28 (pp. 367-8). There is no doubt a grey area about how much needs to be pleaded and proved to establish reasonableness before the evidential burden shifts to the defendant to show that the expenditure was unreasonable. But in this kind of case it is clearly right that a claimant who needs to rely on his impecuniousness in order to justify the amount of his claim should plead and prove it. I note in this connection that the Claimant’s advisers plainly thought that it was incumbent on him to address the point in his witness statement, which was served at an early stage in the proceedings: see para. 13 above.

THE NEED TO PLEAD FOR “MITIGATION EXPENDITURE” IS A GENERAL ONE

It is important to note that the need to plead “mitigation expenditure” is a general one, not confined to car hire cases.