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Personal injury claims

Impecunious - If so, prove it!



The decision of the Sheriff Principal in the case of Gee v Axa to refuse to allow recovery of credit hire charges incurred demonstrates that, in establishing impecuniosity, the onus is squarely on the pursuer.

Facts of the case

Jacqueline Gee obtained a replacement vehicle from Accident Exchange on a credit hire basis following a road traffic accident in July 2006.  The hire ran from 19 September until 16 October 2006 at a cost of £4,299.18.  Liability, pre-litigation, had been agreed on a 50/50 basis between the defender and Accident Exchange.  The pursuer insisted upon 100% once the action was litigated.  The issue of the contractual reliance on liability and the question of quantification of damages came before the court.

Prior to the hearing on evidence the defenders placed a call on the pursuer to state “whether she had sufficient funds to pay for the cost of hiring a vehicle other than by credit hire”.  The pursuer’s pleadings merely stated that “the pursuer was impecunious at the start and during the hire period.”  Nevertheless, the proof went ahead and the pursuer was awarded the total hire claimed.

The Appeal

The defenders lodged an appeal with Sheriff Principal on the following issues:

  1. Whether there was an agreement prior to proof that liability be split on a 50/50 basis
  2. Whether the credit hire charges incurred by the pursuer were recoverable from the defenders

Point 1

There was an exchange of emails pre-litigation between Accident Exchange and the defenders agreeing a 50/50 split.  The Sheriff Principal held that this arrangement was irrelevant to the present court proceedings as it was Accident Exchange, and not the pursuer, bound by that agreement with the defenders.

Point 2

The Sheriff Principal decided that the Sheriff at first instance was wrong to find that the pursuer’s oral evidence alone, in the absence of any supporting documentation, was sufficient to prove impecuniosity.  The defenders had enrolled a specification of documents for the pursuer’s bank statements during the course of litigation.  This had been opposed by the pursuer’s solicitors and ultimately refused by the Sheriff.  Accordingly, the only evidence of the pursuer’s financial status at the time of hire was that of the pursuer herself.

Precedent is clear that a pursuer cannot recover more than the “basic hire rate” (previously spot rate) for a replacement vehicle unless they are impecunious.  This precludes recovery of the more expensive cost of a credit hire vehicle.  Whether the pursuer is impecunious depends on the facts and circumstances relating to the pursuer’s financial circumstances which are only within the knowledge of the pursuer.

The Sheriff Principal ultimately decided that the onus of proving impecuniosity will be on the party arguing it, namely the pursuer, and held that in the present case the pursuer’s oral evidence failed to discharge this burden.

The defenders had led “best hire” evidence at proof. However, because the Sheriff at first instance made no finding in relation to these rates, the Sheriff principal was unable to grant Decree for a lesser sum, therefore, she allowed the Appeal and no sum in respect of the credit hire charges were payable.

Click here for the case link.


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