Calculating the BHR or spot rate in credit hire claims.

Darren Bent v Highways and Utilities Construction 2011

This is a first for me – writing about a case where one of the parties used to be in my fantasy football team (he’s not now, Demba Ba partners Van Persie). Of course this case is not about football it’s about the far more exciting issue of determining the correct BHR (basic hire rate or “spot rate”) for a credit hire vehicle.

This judgment was delivered along with the case of Pattni v First Leicester Bus Limited. In both cases the claimants were not “impecunious” (see Lagden v O’Connor [2003] UKHL 64)

In Darren Bent v Highways Utilities Construction [2011] EWCA Civ 1384 the Court of Appeal three issues arose to be determined:

1. The correct method of calculating the BHR;
2. Whether a car should have been hired on the 7 day rate or the cheaper 28 day rate;
3. If he 28 day is preferred what discount should be applied to the 7 day rate?

The case has a very useful summary of the background law at paragraphs 29 to 41. As far as the first issue is concerned Aikens LJ who gave the judgment of the court said at para 73,

To summarise, the questions are: (i) did the claimant need to hire a replacement car at all; if so, (ii) was it reasonable, in all the circumstances, to hire the particular type of car actually hired at the rate agreed; if it was, (iii) was the claimant “impecunious”; if not (iv) has the defendant proved a difference between the credit hire rate actually paid for the car hired and what, in the same broad geographical area, would have been the BHR for the model of car actually hired and if so what is it; if so, (v) what is the difference between the credit hire rate and the BHR?

For present purposes the important point to note is that (assuming the answer to questions (i), (ii) and (iv) above is “yes” and that to (iii) is “no”) the aim of the judge’s fact finding exercise is to ascertain the BHR for the model of car that the claimant actually hired and to do so on an objective basis.

The court held the trial judge had erred in law. There was evidence available of the BHR for an Aston Martin DB9, the car Darren Bent hired whilst his Mercedes CLS 63 AMG Coupé was being repaired. The figures were £470, £500, £691 and £695. The claimant was seeking to recover £573.28. In the circumstances the appellant failed to prove that the BHR for an Aston Martin DB9 was less than £573.28.

The court accepted the appellant’s argument that the car should have been hired on a 28 day rate as it was reasonably apparent from the outset that the repairs would take a considerable time – the discount to be applied was 12%. Mr Bent was awarded 94 days hire at £504.48 plus VAT, which is a tad under 50 grand.

See the related case of Pattni v First Leicester Bus Limited.

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