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House of Lords Judgement Dimond
-v- Lovell The House of Lords judgment (11th May 2000) dealt with the issues surrounding obtaining of a replacement car by the innocent (not at fault) party in a Road Traffic Accident (R.T.A.). In brief; you must act reasonably in incurring car hire costs.
The
ABI, supported by most motor insurers, launched an initiative in September
1999, designed to enable the innocent party in a motor accident to have quick
and easy access to a free replacement vehicle, where necessary. The innocent
party's replacement vehicle will be paid for by the insurer of the driver
responsible for the accident.
The. House of Lords ruled that agreements for
'free' car hire following an R.T.A. were invalid. The House of Lords upheld a Court of Appeal decision in 1999 Dimond could not recover monies from the insurers of Lovell. Lovell crashed into the rear of Dimond's vehicle i.e. Lovell was 'at fault'. Dimond hired a replacement car for more than £45 / day. A typical rate for a similar vehicle at the time was £about half this. However, Dimond was advised by the hirers that payment was not required until Lovell's insurers made settlement - this was 'credit hire'. Lovell's insurers accepted liability - that their Insured was 'at fault', but refused to pay Dimond's hire charges for two reasons:
The first point was was accepted by the Lords - it was the hire company who were out of pocket and they had no ability (due to the 'credit' contract not having been made in the approved manner) to seek payment (recovery of their loss) from Dimond. No. Use a 'reasonably competitive hire company' when
acquiring a vehicle. Full details
of the ABI scheme, including details of the hire companies involved and their
rates, can be found on the ABI website http://www.abi.org.uk/tphire.
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