Advice on Need

I have been authorised to share the below advice from Ben Williams KC on the issue of need. It raises important points in favour of the Claimant. It follows several decisions recently (some of which are subject to appeal) where Judges have dismissed claims for hire with an erroneous finding that the Claimant had no need.

Relevant Case Law

Singh v Yaqubi [2013] EWCA Civ 23 held that a claimant seeking to recover his charges needed to prove his need for a replacement vehicle.  The argument that, since this was an issue of mitigation, it was for the defendant to prove unreasonable conduct, was rejected.

This decision contradicted the previous statement of the Court of Appeal in Pattni v First Leicester Buses(aka Bent v Highways & Utilities Construction (No 2)) [2012] RTR 17 at [32] that it was for the defendant to prove that hiring was unreasonable (“The injured party cannot claim reimbursement for expenditure that is unreasonable. If the defendant can show that the cost that was incurred was more than was reasonable… by proving that the claimant had no use for a replacement car in part or at all… the amount expended on the hire must be reduced …”)

We believe that the Supreme Court’s decision in Armstead v Royal & Sun Alliance [2025] AC 406 now shows that Singh was wrong and Pattni was right, and the line that should be taken at court is that Singh cannot now stand with the latest decision of the Supreme Court.  The allegation that C did not need to hire a replacement vehicle is an allegation of a failure to mitigate.  It is therefore for D to prove it – and the standard to be applied to C’s conduct is not demanding, given that proving a failure to mitigate is difficult.

Clearly, where the reasoning of a Court of Appeal decision is inconsistent with the ratio of a later decision of the House of Lords, it is the latter that must be followed.  There is no rule which requires a decision of the Court of Appeal to have been expressly overruled: see Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384, 405e - accessible at https://www.dropbox.com/scl/fi/fzsf6hajftzaj5jamguni/Midland-Bank-v-Hett-Stubbs-Kemp.pdf?rlkey=38a3l2858nv5ukpxp8c6e9hgu&dl=0.

Armstead was itself a credit hire case.  The issue was whether the claimant could recover a charge made by a credit hire company from a negligent motorist.  Under the credit hire agreement, if C had an accident in the hire car, she remained liable for the hire rate for up to 30 days while it was being repaired.  The lower courts held that this charge was irrecoverable, but they were reversed by the Supreme Court.

One of the issues the Supreme Court had to consider was who bears the burden of providing consequential losses suffered after property has been damaged: see para 58.  Charges under the credit hire agreement were the relevant consequential loss.

While in Armstead the relevant charge under the hire agreement was the charge for damaging the vehicle, the principle would obviously be the same if the charge in question had been the hire charges themselves.

The Supreme Court’s answer to the burden of proof question was given at para 59: ‘the correct analysis is that once the claimant has proved that a tort has been committed and that the loss claimed was in fact caused by the defendant's breach of duty, it is for the defendant to assert and prove that one, or more, of the principles mentioned at para 23 above applies to limit the damages recoverable by the claimant.’

At para 23, the court had said: ‘Where it is shown that loss has (factually) been caused by the defendant's breach of a duty of care, five principles are capable of limiting the damages recoverable by the claimant. They are: (i) the scope of the duty; (ii) remoteness; (iii) intervening cause; (iv) failure to mitigate; and (v) contributory negligence.’

How to use Armstead

In the vast majority of credit hire claims, there will be no difficulty in showing that the hire charges are a consequential loss caused by the defendant breaching its duty to the claimant by negligently damaging their vehicle.  As such, it will be for the defendant to prove that the charges are irrecoverable because of one of the five limiting principles identified in Armstead at para 23.  Obviously, in most cases the principle that will be relevant is that of mitigation. 

This issue should be raised with Defendant’s during the course of litigation upon the Claimant’s need to hire being set out. Simply putting the Claimant to proof as to his need to hire is not sufficient when the burden is on the Defendant to show the Claimant acted unreasonably. Previous authority to the contrary like Singh is wrong, and has been overruled by Armstead.

Similarly this should also be brought to the attention of Trial Counsel in order for the same to be made via submissions. By doing so this will strengthen any appeal should one be necessary.

Finally, it may be said that Giles v Thompson – a decision of the House of Lords, so of equal status to Armstead – also places a burden of proving need on C.  The answer to this is:

(1)    The question of the burden of proof is not addressed in Giles, and was certainly not decided.  Ultimately, on the question of need, the House of Lords just said that they would not disturb the factual finding of the circuit judge.

(2)    By contrast, burden of proof was explicitly analysed and answered in Armstead, and it is part of the ratio of the decision.

(3)    The passage in Giles is anyway far from clear.  The court asks whether there is proof that the claimant acted reasonably.  This is the language of mitigation, where it is now settled that D must prove a failure in mitigation.  While the court then goes on to say that reasonableness is “not self-proving” it is may well be that it meant by that only that there is no irrebuttable presumption of reasonableness.  A few lines later, the court referred to the defendant needing to “displace the inference” of reasonableness, which certainly sounds as if it was placing a burden on the defendant, and was approaching the question of reasonableness as a rebuttable presumption.  Clearly, this is how the court in Pattni/Bent read Giles, as the court actually cites the relevant passage in Giles as authority for the proposition that it was for D to disprove need.   

For these reasons, Armstead should be taken as vindicating the statement in Pattni/Bent that it is for the defendant to prove that hiring a replacement vehicle was an unreasonable failure to mitigate loss.”