POTENTIAL CLAIMANT IN CREDIT HIRE CASE MUST GIVE PRE-ACTION DISCLOSURE OF DOCUMENTS RELEVANT TO IMPECUNIOSITY

March 17, 2022 · by · in Applications, Disclosure

I am grateful to Garry Herring of Keoghs solicitors for sending me a copy of the judgment of HHJ Harrison in Allianz Insurance PLC -v- Holt (3rd December 2021). It is an example of the court exercising its discretion to order pre-action disclosure from a claimant in a credit hire case.  The claimant was ordered to deliver up documents relating to his bank statements and income in a case where, if issued, the question of impecuniosity would be central to the question of damages.

The judgment can be found here. Allianz v Holt – Approved Judgment

The order dismissing the respondent’s application for permission to appeal can be found here. Allianz v Holt – PTA refused

THE CASE

The defendant insurer was a prospective defendant to an action by the claimant. The claimant was seeking damages for losses, including car hire claims, and had indicated a claim was to be brought which included the cost of car hire.

THE DEFENDANT’S APPLICATION FOR PRE-ACTION DISCLOSURE

The Defendant issued an application for pre-action disclosure seeking the documents that would, ordinarily, be disclosed by a claimant in such a case where the claimant’s impecuniosity is in issue.

  • Statements in respect of all bank, credit cards and saving accounts covering the period of hire and 3 months before.
  • Wage slips or other proof of income covering the period of hire and 3 months before.

A number of similar applications had been made and the District Judge invited the parties to select a lead case, this was the case that was listed before the Circuit Judge.

THE CLAIMANT’S OBJECTION TO THE APPLICATION

 

The judge considered, and rejected, a number of objections by the claimant.

 

  • The claimant argued that the applicant insurer was not likely to be a party to the action, the defendant being the employer of the negligent driver. This argument was not accepted. Insurers are routinely joined into actions, further “In reality it is the insurer who meets the claim and makes the decision in the case”.
  • There was evidence that showed that the BHR (Basic Hire Rate) was much higher than that normally found (£345 as opposed to £61.94).
  • The respondents declined a clear invitation from the applicant to indicate whether impecuniosity was an issue.
  • There was sufficient information for the court to conclude that the issue of impecuniosity was “likely to arise” in any subsequent proceedings.

 

DISCLOSURE IS DESIRABLE

The judge held that impecuniosity in the context of credit hire is central because it governs the basis by which damages are calculated. Disclosure as soon as possible of evidence in relation to impecuniosity if the case were to be issued was, in the judge’s judgment, desirable.

THE EXERCISE OF DISCRETION

The judge was mindful of the risk of seeking unnecessary personal information from a prospective claimant.

However it was wrong for there to be a policy of not addressing the issue of impecuniosity in credit hire cases before issue of proceedings. This issue is central to the calculation of damages.  A prospective claimant in a credit hire case should not be able to avoid the issue of impecuniosity by saying they would not deal with it at the pre-action stage.  To do so would be contrary to the overriding objective and practice direction for claims.

Further there was a clear desirability of an individual, entering into a credit hire contract in these circumstances, being aware of the relevance of their financial situation at the earliest stage possible.

MAKING THE ORDER

The judge was of the view that this was one of those occasions when an order should be made. The jurisdictional requirements were met.  This was not an attempt to engineer a pre action protocol for credit hire cases that does not exist, “rather it is an attempt to apply the principles of the overriding objective to the use of the relevant practice direction”.

THE RESPONDENT’S UNSUCCESSFUL ATTEMPT TO APPEAL

The respondent was not granted permission to appeal. The order dismissing the application can be seen above.

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