This case is the latest instalment of the credit hire litigation. Members of Thirty Nine Essex Street played a prominent part in the first significant case on this issue, Giles v Thompson  3 All ER 321. Almost twenty years later, the disputes between motor insurers and hire companies appear no closer to resolution.
The issue in this case was the impact of the Cancellation of Contracts Concluded in a Consumer’s Home or Place of Work etc Regulations 2008. These little known regulations were introduced to allow consumers to cancel contracts made after home visits by salesmen. However, they are so broadly worded as to apply (apparently) to any contract entered in the home – such as an agreement with a tradesman, or with a car hire company which delivers a car.
If, in default of the regulations, the consumer is not given written notice of his right to cancel a “home” contract, the contract is unenforceable.
In Mr W’s case, a hire car was delivered to his home, and he signed a hire agreement at the point of delivery. No notice of the right to cancel was given. The defendant therefore rejected the claim for hire charges, contending that the hire contract could not be enforced, and therefore that there was no loss.
The hire company met this challenge by procuring the payment of the hire charges, in W’s name, by W’s credit protection insurer. The hire company had arranged, and paid for, this insurance when the claimant hired the car. It did so in order to be able to market the arrangement as “cost free” – either the defendant’s insurer would pay, or the credit insurer would.
The hire company’s argument was that, in light of this, the unenforceability of the hire agreement was irrelevant. The claimant had suffered a loss, as the hire charges had been paid, and in law the payment by his insurer was a payment by him. The claimant did not act unreasonably in paying the hire charges, as his duty to mitigate did not require him to dispute payment for a hire car he had received and used, in reliance on an alleged breach of highly technical regulations intended to benefit him and not the defendant.
The hire company also argued that the regulations were to be construed so as not to apply to this transaction, as the contract did not follow a sales visit. Only the regulation of such visits was consistent with the true purpose of the regulations. To the extent necessary, it was further argued that the regulations were incompatible with the hire company’s right to peaceful enjoyment of its possessions under article 1 of the 1st protocol to the European Convention, and should be “read down” under s 3 of the Human Rights Act 1998.
The case was tried by Judge Mackie QC in the Mercantile Court of the QBD. He accepted the claimant’s argument that the hire charges had been paid, and that the alleged unenforceability of the hire contract was therefore irrelevant. Equally, he accepted that the claimant had no “duty” to dispute the validity of the hire contract by way of mitigation. He therefore awarded the full charges claimed.
Obiter, the judge rejected the claimant’s attack on the validity and meaning of the regulations. There was no reason not to give them their literal meaning, and the interference with possessions which resulted was a proportionate measure for Parliament to adopt in the implementation of a consumer protection policy.
Permission to appeal was given to the defendant. If the appeal proceeds, the claimant has indicated that the attack on the regulations will be renewed by respondent’s notice.
Benjamin Williams represented the claimant.