It is coming up to nine years since the CA gave judgment in the conjoined test appeals in Clark v Ardington & Others. Many had hoped that their Lordships decision would have put an end to the ongoing battle between the motor insurers and the credit hire industry. It did not. In fact, in many respects Clark gave rise to an increase in the volume of claims proceeding in the county courts on satellite issues.
Credit hire litigation has a habit of making a comeback in more ingenious ways than Madonna (that is to say the mega-popstar), and I am not talking about adopting kids from Africa!
The most recent guise has been the spate of test cases on enforceability. I don’t propose to use this posting as an in-depth analysis of these judgments; it is a pointer to those who are unaware of the litigation under the Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc Regulations 2008. Yes, the length of the title along with the inclusion of abbreviation ‘etc’ in it says it all. It is probably best described as a turgid bit of consumer law.
Like the Consumer Credit Act 1974, the 2008 Regulations were never designed with regulating credit hire as its purport. By chance credit hire agreements entered into by individuals, not companies, fall within its scope. The purpose of the 2008 Regulations is, inter alia, that the consumer’s rights to cancel an agreement be set out in the proscribed way and manner. Failure to do so renders the agreement irredeemably unenforceable as against the consumer. And so the argument goes: if the agreement is unenforceable between hirer and credit-hire company, the former cannot recover the charges from the tortfeasor as that would amount to an unjust enrichment.
Because of the pitfalls in non-compliance, some credit-hire organisations have chosen to re-structure their agreement in order to comply.
However judges in the county courts are reaching inconsistent decisions on the question of whether the 2008 Regulations have been complied with. Take for instance the decision by HHJ Vosper QC in Guerro v Nykoo (2010) Swansea CC. In that case a compliant notice of cancellation had been served on the hirer but because the terms and conditions, incorporated in a separate document, made no mention of it, the agreement was found to be in breach of the 2008 Regulations. In Orley v Viewpoint Housing Association Ltd (2010) Gateshead CC, HHJ Armstrong reached a different conclusion on more or less identical facts. Both judgments, at least at first blush, appear to be fully reasoned.
Whilst there is uncertainty in the law there will always be work for lawyers. However in this field it is unlikely that there will be finality, for the foreseeable future.