Appeal sheriffs find hire driver whose leased vehicle was struck has title to sue insurer of other driver for cost of replacement vehicle

Appeal sheriffs find hire driver whose leased vehicle was struck has title to sue insurer of other driver for cost of replacement vehicle

The Sheriff Appeal Court has overturned a decision that a man who made a claim against the insurer of a driver who struck a hire vehicle for the costs of hiring a replacement vehicle did not have title to sue.

Appellant Robert McGarrigle was forced to hire another vehicle to continue working as a self-employed private hire driver. He sought the sum of £8,495.28 from UK Insurance Ltd, which was the cost of hiring a replacement vehicle for 81 days. He challenged the sheriff’s decision that he had no title to sue on the basis that a link existed between him and the hire company giving rise to title.

The appeal was heard by Sheriff Principal Nigel Ross and Appeal Sheriffs Robert Fife and Brian Mohan. McLean, solicitor advocate, appeared for the pursuer and appellant and Mulhall, advocate, for the respondent.

Legal relationship

On 9 June 2019, a driver insured by the respondent drove into a parked vehicle that the appellant leased from a third-party company. The damage caused to the vehicle was sufficient to render it unroadworthy, however the leasing company had no other vehicles which they could supply to the appellant. The appellant accordingly approached another vehicle hirer and entered into a credit hire agreement for a replacement vehicle for 81 days.

It was accepted that the respondent’s insured was responsible for the accident and that the appellant had interest to sue. However, the respondent challenged the appellant’s title to sue on the basis that, as he was not the owner of the damaged vehicle, he could not recover any loss flowing from the damage to the vehicle. The sheriff, who noted that the appellant was not in the vehicle when it was struck, decided that the appellant had no title to sue as he had not suffered personal injury or inconvenience arising directly as a result of the accident.

Counsel for the appellant submitted that he had suffered loss as a result of the accident, namely the loss of his right to use the vehicle, and the sheriff had not explained why title did not arise from this. The contract of hire had given rise to a legal relationship sufficient to create the necessary title to sue.

The respondent submitted that the sheriff had correctly recognised that the legal relationship with a third party was irrelevant in any claim directed against the respondent. Any loss had been sustained by the leasing company, and the contract between the company and the appellant did not create any relationship with the respondent.

A victim has title

Sheriff Principal Ross, delivering the opinion of the court, observed: “The first question is whether the appellant is a party to any ‘legal relation providing some right’. That relation need not be with the respondent. The appellant is entitled to pursue the respondent if the respondent “either infringes or denies” that legal relation. The origin of the appellant’s legal relation, whether with the respondent or anyone else, is not of relevance to this test.”

Addressing the nature of any legal relationship, he said: “Clearly, the appellant’s contract with the original hire company did not create any relationship between appellant and respondent. There is, nonetheless, a relationship between the parties. That relationship arises out of the occurrence of the accident, and from the respondent’s insured’s alleged negligence.”

He continued: “There is no doubt that a victim has title to raise an action against their wrongdoer. A legal relation providing some right arises out of the relationship of wrongdoer and victim created by the negligent act. It arises in delict. The record contains averments relating to the delictual wrong. On the particular facts of this case, there is a further legal relation giving some right, namely the pursuer’s rights under a third party contract with the original hirer.”

Turning to whether the respondent had infringed the appellant’s right, the Sheriff Principal said: “In our view the appellant is a party (in its widest sense) to a legal relation providing some right, which the respondent’s insured has infringed or denied. The appellant’s claim is that he was party to some legal relation (the original hire contract) which gave rise to some right (the right to use the vehicle for the purposes of trade) which the respondent’s insured has infringed (preventing use) by his negligence. As a result of the collision, the appellant was unable to earn a living, and took steps to remedy that, for which he seeks reimbursement. The definition in [Macphail’s Sheriff Court Practice] is satisfied.”

He concluded: “We are fortified in our view of title to sue by considering alternative facts. If the appellant had owned the damaged vehicle, there would be no dispute that relevant heads of loss arose, and the hire of a replacement vehicle would be a relevant ancillary claim. Similarly, had the appellant suffered personal injury, the present claim would also have been a relevant ancillary claim. In neither case would a claim for loss of use have been separately challenged on the basis of title to sue.”

The Sheriff Appeal Court therefore recalled the sheriff’s interlocutor and remitted the cause to the sheriff to proceed as accords.

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