Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH NUMBER 173
A531/09	OPINION OF LORD MATTHEWS in the cause ALEXANDER GREENLEES Pursuer; against ALLIANZ INSURANCE PLC Defender: ­­­­­­­­­­­­­­­­­________________

Pursuer: Casey; Thompsons, Solicitors

Defender: Balfour; HBM Sayers, Solicitors

18 October 2011

[1] The pursuer is Alexander Greenlees. The defenders are Allianz Insurance Plc who at the material time were the insurers of a Mercedes motor vehicle driven by a gentleman named John Allsop. On 10 November 2008 the pursuer's Jaguar Sovereign motor vehicle, registration number A6 EXG, was parked and unattended at a car park in Hamilton, Lanarkshire. Mr Allsop was driving his Mercedes, registration number SF56 MWO, when it struck the pursuer's vehicle causing damage. For the purposes of the action the defenders admit liability.

[2] The issue, when the case called before me for proof before answer, was as to the measure of loss, if any, sustained by the pursuer.

[3] Broadly speaking, the pursuer's vehicle was written off as being beyond economical repair although he eventually managed to have it repaired and is now still driving it. In any event, after the collision he entered into a credit hire agreement with Accident Exchange Limited, (AEL) a credit hire company who provide a number of benefits including the use of a replacement vehicle. The nature of the services provided by such companies has been the subject of a considerable amount of litigation but their role is generally now well understood. It is admitted on record that the pursuer was not impecunious and the proof proceeded on the basis that assuming he was entitled to hire a replacement vehicle he would only be entitled to recover what are known as spot hire rates. That concept is also reasonably well understood. He had access to the credit hire vehicle between 10 November 2008 and 20 February 2009. He avers, and it is admitted, that he is contractually obliged to pay to AEL the costs of the report by an engineer instructed by them and also the hire costs for the replacement vehicle, including credit hire rates and interest on all sums until payment. In the circumstances which I will set out it is argued that the pursuer is not entitled to recover any sums at all but in any event the sums sought are said to be excessive. It is averred on behalf of the defenders, amongst other things, that the vehicle taken on hire by the pursuer was not an equivalent one, that he was aware as early as 13 November 2008 that his vehicle was a total loss and that the length of the hire was, in any event, excessive.

[4] At the outset Mr Balfour, who appeared for the defenders, moved me to allow a number of late productions as to the rate of hire of what was said to be an equivalent vehicle. The motion was opposed by Ms Casey who argued that the pursuer's case would be prejudiced if I were to allow the productions to be lodged at that late stage.

[5] I agreed with her submissions and refused the motion.

[6] Thereafter the pursuer gave evidence. He spoke of parking his vehicle in the car park at Hamilton and finding out about half an hour later that a bin lorry had reversed into it. He said it was about nine or ten years old at the time and had done about 72,000. It had also just had a replacement engine put into it. He thought it was worth, at most, £6,000 or £7,000. The wheel base was 69 inches longer than normal. It was a chauffeur driven car used by brewers and the like and he bought it. He had always liked that sort of vehicle, which was beautiful to drive. It weighed some two and a half tons and was a very safe vehicle. It was one the last of that style made and he expected that the value would go up eventually. Number 6/10 of process was an invoice for a replacement engine dated 1 August 2008. It was in the sum of £2,653.28 and a firm in Partick by the name of Lorimer and Findlay had done the work. It was a reconditioned engine because the original one was not perfect and would have cost more than that to strip and rebuild. The pursuer explained that this was his seventh or eighth Jaguar. He had bought and sold them since he was seventeen or eighteen and he was now forty-eight. Most of them had been long wheel-based Sovereigns. One of them was a 1979 Mark II in British racing green for which he had paid £2,500 and which he had sold seven or eight years later for £15,000. Ms Casey asked a number of questions about the pursuer's finances but objection was taken to this on the basis that there was no Record for it and in any event it was admitted that he was not impecunious. I allowed the evidence to be led subject to competency and relevancy but I am satisfied now that the objection was well founded, although nothing turns on it. He had insured his vehicle through Lawrie Ross Insurance Brokers in Maryhill on a fully comprehensive like for like basis. He expected that if his vehicle was damaged he would receive a replacement car on a like for like basis that same day. That is what he paid insurance for. After the accident he phoned his brokers and they sent out a transporter for the car. They called back in the afternoon to say that someone would be there with a replacement car for him. He knew nothing about AEL until that time. Later on that day, when it was dark, a man showed up with a 2.7 Jaguar diesel which, he said, was in beautiful condition. It did not even have 1,000 miles on it. The person who brought it ran through the controls etc and the witness said that he signed for it. He thought that the document he was signing was simply an acknowledgement that he had received it and that there was no damage on it. 6/1 of process was a statement of the hire charges. The daily rate for the vehicle which was in fact an XJ 2.7 TDVi Sport Premium, four door automatic, was £283.59 per day. There was a surcharge because it was an automatic of £7.50 per day and a further charge called CDW, or collision damage waiver, of £12.50 per day. The hire ran for 103 days, so the total charges were £31,369.77. With the addition of a delivery and collection fee of £100 as well as VAT of £4,705.47 the total came to £36,075.24.

[7] He was then referred to 6/2 of process, a copy of the agreement he signed with AEL. Objection was taken to this as it was an uncertified photocopy but that objection duly resolved itself since the original was ultimately produced.

[8] Mr Greenlees said, and I accepted his evidence, that he did not examine the agreement but just signed it. While he thought it was a receipt for the vehicle it is in fact a vehicle rental agreement. There is a non-waivable excess of £200. Clause 1.5 indicates that the "AX charges" are the hire charges and any repair charges. Clause 1.6 defines his claim as his claim for compensation for the hire charges and any repair charges against the third party. The rental period is described in Clause 1.12 as "the shorter of the period for which you have a reasonable need for a vehicle by reason of the accident and the period of 85 days from the date of this agreement." The obligations of AEL to the pursuer are set out in Clauses 2.1 and 2.2. 2.1 reads as follows:

"2.1 Where you cannot use your motor vehicle as a result of an accident which in our opinion was the fault of a third party we may hire you the vehicle for the rental period and allow you credit on the AX charges in accordance with this agreement."

Clause 3.4 reads as follows:

"3.4 You must take reasonable steps to keep the rental period to a minimum." Clause 3.6 reads as follows:

"3.6 You will authorise us to monitor the repair or replacement of your vehicle and will provide us with all information reasonably needed for this purpose."

Clause 5.1 reads as follows:

"5.1 You grant us the exclusive right to pursue the claim on your behalf."

[9] He reiterated that he had not read the agreement but had just signed it. He was then referred to 6/3 of process, a witness statement by a gentleman called John David Kyle. He was the branch manager of AEL's Glasgow depot. The statement set out a timetable of events and Clause 16 reads as follows:

"27/11/2008 10:54:00 D Pritchard at AEL called the pursuer's partner Mrs Tremble as they had received a payment that is not acceptable to them."

He said Mrs Tremble was his partner Margaret. The third party had sent a cheque for £1,000 less than they should have. He could not have got a vehicle for the money they sent. They wanted to know the details of the new engine and he said that those details were sent several times. He said that on 27 November 2008 he had not yet received any payment. He had received a cheque for £2,500 but had never cashed it. It was not enough. That was their first offer and he thought they had made a mistake. Clause 17 of Mr Kyle's statement reads as follows:

"27/11/2008 10:58:48 J Law at AEL spoke to the pursuer who called again and advised not accepting payment."

Again the pursuer said that the payment was not sufficient. He was referred to 7/4 of process, a letter from a firm called Strange Jeens & Mathison (North) Limited dated 20 November 2008 to Accident Exchange. The salient parts read as follows:

"We have been contacted by the insured who has advised they have had an engine fitted at a cost of over £2,500. On this basis we have amended the valuation to £4,700. Please note this valuation is only agreeable if a valid receipt is made available and agreement with the third party insurers."

[10] He said that, although he had not seen this letter before, it might explain why the original cheque was not acceptable. He reiterated that he could not have bought a replacement Jaguar for the amount sent. Clause 18 of Mr Kyle's statement was read. It is in the following terms:

"27/11/2008 11:16:50 D Pritchard at AEL called the TPI and spoke to Mark who advised that amended report has been received and is due for review for today and called and advised pursuer that this is an interim payment and that TPI should issue remainder soon to bring up the balance."

He understood that the third party insurers were going to send him more money but could not remember if he had sent back the original cheque. He understood the amended reports referred to in paragraph 18 to mean that the third party insurers had received an interim report and knew that he had a new engine. Clause 20 of Mr Kyle's statement reads as follows:

"04/12/2008 11:06:28 C Goceci at AEL spoke to the pursuer who called in to advise that the other cheque has not been received as yet and advised it is in the process of being issued and can she advise us when it arrives."

Mr Greenlees said that the third party insurers said they had sent him a cheque but he had not received one. They kept asking for details about the new engine and he kept sending copies of the invoice. He thought he would be getting the money soon and made a number of phone calls because he was getting fed up with the whole thing. Clause 24 of Mr Kyle's statement reads as follows:

"11/12/2008 16:03:26 D Pritchard at AEL called the pursuer and left message requesting call back as pursuer needs to re-send purchase invoice to AEL."

He said he had sent about three copies of the invoice by that time. Margaret had sent one, his brother and eventually someone called Peter Lorimer sent one. He also sent one himself from a travel agents via fax. As well as sending it to AEL he also sent it, he thought, to the insurers. Clause 25 of Mr Kyle's statement reads as follows:

"17/12/2008 11:37:08 J Law at AEL spoke to the pursuer who called very unhappy that she has not received payment. AEL advised no notes to advise that we have received it. Pursuer wants it chased up and called back today."

This was a reference to Margaret phoning. The pursuer was getting fed up with the whole thing and wanted the right amount of money sent to him. He wanted AEL to get their car back. When he found out what it was costing he said that they were joking. It was costing around £11,000 per month and he could buy one for £38,000. As far as he was concerned however it was nothing to do with him. Clause 26 of Mr Kyle's statement reads as follows:

"17/12/2008 12:33:15 D Pritchard at AEL called the pursuer to advise not received purchase invoice, but pursuer advised have sent invoice on several occasions."

He said they had sent five or six or perhaps more invoices by that time. Clause 28 reads as follows:

"17/12/2008 12:42:38 D Pritchard at AEL called pursuer who advised of Mrs Tremble's number and that she will know the number documents were faxed on. AEL spoke to Mrs Tremble who could not advise of number however advised that she had spoke to someone previously who advised AEL had received document. AEL advised not the case and to fax over again."

The pursuer said that it was becoming silly. They were sending a copy invoice almost every day and AEL were saying they had not got it or it was blurry. That is when he got Peter Lorimer to send a copy. By that time he had already asked AEL to take away the car. Clause 29 reads as follows:

"13/01/2009 14:30:07 D Pritchard at AEL called pursuer's mobile and got no response. AEL left message advising they will need to terminate hire as he has not provided receipts after numerous requests. AEL sent the pursuer a letter requesting purchase invoice. I refer to a copy of this document as production C."

Page 15 of 6/3 was a copy of the letter, dated 13 January 2009. It reads as follows:

"Following our previous conversations on the telephone regarding an increase to your pre-accident value, I have noticed that we have still not received the purchase invoice for the new engine. As this is an ongoing issue, I will need to request that you submit the purchase invoice to myself before 15:00 January the 15^th 2009. Failing this we will be left with no option other than to terminate our hire agreement with you. Please make sure you fax the purchase invoice to 08700 116725 before the given time and date and contact myself on 0845 050 9582 to confirm this has taken place....Many thanks.

Daniel Pritchard..."

The fax number referred to in that letter was, said the pursuer, the number to which he had been sending the document. Clause 30 of the statement reads as follows:

"14/01/2009 09:45:08 D Pritchard at AEL spoke to the pursuer who called to discuss the matter and AEL advised of our position with purchase invoice and that if not received by time given (15.00 on 15/01/09) then we will look to take vehicle back. The pursuer advised he had sent purchase invoice over 7 times. AEL advised to send to AEL on 08700 116725 with reference number on and to call once sent so AEL can confirm document scanned onto system."

By this time he had already sent it seven or eight times. Clause 31 of the statement reads as follows:

"14/01/2009 13:09:22 S Brookes at AEL spoke to the pursuer who called in to check if copy of invoice received. AEL advised received but cannot read details."

Clauses 32 and 33 read as follows:

"14/01/2009 13:17:13 D Pritchard at AEL received a fax and it was illegible. AEL called the repairers to confirm if they have received a copy of the purchase invoice and Marie advised nothing has been received in likeness to a purchase invoice.

14/01/2009 13:31:58 D Pritchard at AEL called the pursuer to advise of update and he advised that he had spoken to Peter Lorimer who AEL believed the pursuer bought the engine from. AEL called Mr Lorimer who advised he has faxed over purchase invoice several times and is reluctant to fax again and AEL advised of situation with pursuer and requested he fax over to 01675 435123 with reference number on."

[11] The pursuer said that he told AEL that he would get Peter Lorimer to send the original invoice. Clauses 34, and 36 read as follows:

"14/01/2009 13:43:17 D Pritchard at AEL called the pursuer and advised that the copy from Mr Lorimer is better however still slightly illegible. AEL requested that a hard copy be posted to AEL, Special Delivery tomorrow so AEL are in receipt by Friday and AEL will try and speak to the TPI with copy on the system...

21/01/2009 18:01:39 D Pritchard at AEL called the pursuer to confirm if the TPI have issued any additional payment and pursuer advised he has not received any increase as of yet. AEL advised will chase the TPI tomorrow and will have the hard copy received from Mr Lorimer."

The pursuer said that Mr Lorimer had posted a hard copy and his own priority by that time was to give the car back. Clause 39 reads as follows:

"03/02/2009 11:27:54 D Pritchard at AEL received a letter from the TPI and called the pursuer to confirm why engine replaced. AEL called the pursuer and advised of letter. He advised the engine had a fault so was replaced. AEL advised will call engineers and the TPI and confirm details."

Clause 40 reads as follows:

"09/02/2009 09:45:42 D Pritchard at AEL called the pursuer to confirm payment has been received and was advised nothing as of yet, however they will call once received."

That meant there was still no money by that stage. Clauses 43 and 44 read as follows:

"10/02/2009 14:00:03 D Pritchard at AEL called the pursuer and advised that payment has been received and advised to call once received.

14/02/2009 11:04:59 T Hiley at AEL called the pursuer and confirmed the payment received and arrangements made to collect replacement vehicle for 20/02/2009."

[12] The pursuer said that he must have got payment then but he gave the car back before he put the cheque into the bank. He could not have coped without a car. He had a jewellers shop and was picking up jobs involving hand engraving. He was asked why he had used AEL and said that he did not. As far as he was concerned he was using his own insurance company because somebody crashed into his car. He expected what he got, namely a like for like car. It did not particularly bother him not having his car because he had a hire car. It was a bit stressful and annoying having to make continual phone calls but when he found out that the hire charges were around £11,000 a month he realised that it was not right and asked AEL to take the car back. He had no idea what the problem was. He was on the phone all the time asking what was happening. There was nothing he could have done to expedite the process.

[13] In cross-examination he confirmed that he thought that the document was simply an acceptance of the motor vehicle and a confirmation that it was undamaged. He did not agree that he should have read the document. He had not heard of AEL before signing 6/2. He agreed that he had signed it three times. He did not discuss a collision damage waiver. He agreed that for that kind of car a hire charge of £350 per day sounded about right. However, if he had understood that he was hiring a vehicle at that sort of price he would not have signed the document. This was because he expected his insurance company to provide a car. He thought that the third party's insurers would have to pay the charges. He did not think they would amount to as much as they did and said that he should not have had the car as long as he did. He had no responsibility himself to pay that sum and AEL had not asked him for it. He had not been told anything by AEL as to what would happen if his action was not successful. He never considered trying to hire an alternative vehicle from anywhere else. He simply thought that his insurance company had provided the document per the policy. 7/6 of process was a total loss report by Strange Jeens & Mathison who were engineers. The loss date of 10 November 2008 was the date of the accident. The engineers were instructed the following day, they inspected the car on the 12^th and they reported on the 13^th. The vehicle was registered on 25 June 1999. The mileage was recorded as 84,156 but the witness said that the reconditioned engine had around 36,000 miles on it. The repair costings were set out, amounting to £3,810.77. The engineers commented that their valuation of the vehicle was £3,700 so the costs of repairs exceeded that. He was asked when he was told it was a total loss and he agreed that it was probably shortly after the accident. There was, however, an argument about how much he was to receive. The first payment was £1,000 short. It was suggested to him that he initially received £3,700 and he agreed that that was possible. He also agreed that he might have got this £3,700 towards the end of November 2008. He realised right away that he was not happy with the valuation of £3,700. He probably heard about this a couple of weeks after the accident but he was not sure. 7/4 of process was a letter to which I have already referred dated 20 November 2008 indicating that the valuation had been amended to £4,700 and it recorded that the pursuer had contacted them to advise that the new engine had been fitted. He agreed that that suggested that he must have known of the valuation before 20 November. He also agreed that a receipt had to be provided for the reconditioned engine. He was first asked for the receipt round about that time. He had a copy and it was faxed to AEL and the garage who were doing the work. He said it was his partner Margaret who did that. He was not sure if it was sent to AEL or to the engineers or both. He agreed that there was no reason why a valid receipt could not have been produced and shown to the third party insurers at the outset. He had given it to everyone who had asked for it. He did not remember when he found out that the cost of hire was £11,000 per month but it was in a telephone call from his solicitor. It was almost at the end of the hire period. His reaction was to return the hire car because he thought it was too expensive but he was told not to return the car until he got the money. It may have been AEL or the garage who were doing the work who told him that. He got a further £1,000 around 9 February 2009. The car was returned within days of his getting the cheque. It was pointed out to him that the hire continued until 20 February and he said he could not have got the cheque then. It was then suggested that he got the cheque on 14 February but he said he did not know. He got it and put it in the bank and the car was returned within a day or two. Clause 44 of 6/3 of Mr Kyle's statement, was read to him. That indicated, as I have said, that on 14 February 2009 at 11:04:59 a T Hiley at Accident Exchange called the pursuer and confirmed that payment had been received and arrangements were made to collect the replacement vehicle for 20 February 2009. He was asked why he continued in the hire and he said it was because he was supposed to cash the cheque first and he did not. The car was returned before he cashed the cheque. His car was repaired around that time and it took four days and cost under £1,200. It was the same garage who had made the initial quote. He got that done just as the cheque was its way. He said he did not cash the £3,700 cheque. It was put to him that he could have used that cheque to pay for repairs but he said that at that time he did not know it could have been done for £1,200.

[14] He said that the hire car was much the same as his. He did 26 miles a day. A brand new car would cost from £40,000 to £60,000. He would not have bought a new one as a replacement because it would have been worth half that value after driving it out of the showroom. The hire vehicle was only superior to his own in that it was newer but it was the same kind. It did not strike him as strange that he could drive it because of his policy. If he had known it was not provided by his insurance company he would never have taken it. It never occurred to him to stop using the vehicle when he got the £3,700 because he never cashed it. He did not know his insurance company had not provided the vehicle until his lawyer phoned him. He never thought it was unreasonable. If he had damaged the car himself he would have sent it to Peter Lorimer to fix or to another person he used to work with years previously. He was referred to 6/4 of process and in particular to page 8. This was a document which was spoken to in due course by another witness. In the meantime he was asked if he had heard of a number of the insurance companies referred to therein, namely Sports Car Hire, Pearl Car Rental, City Inter Rent, Rapid Drive, Guy Salmon, Dream Car Hire and Express Rent-a-Car. He said he had never heard of them. He had, though, heard of other firms referred to therein namely Exclusive Car Hire and Prestige Car Hire. He also said, contradicting himself, that he had heard of City Inter Rent. He had not heard of Thrifty Car Rental but he had heard of Enterprise and Europcar.

[15] In re-examination he said that he was dyslexic and he confirmed that he had sent the invoice on a number of occasions. He first did it pretty soon after the valuation was received. He was asked if he ever sent the receipt directly to the third party and said he probably did. He sent the invoice everywhere. Clause 18 of Mr Kyle's statement was read. That indicated that on 27 November 2008 D Pritchard of AEL called the third party's insurers and spoke to Mark who advised that the amended report had been received and was due for review that day. Mr Pritchard also called and advised him that the payment was an interim one and that the third party's insurers should issue the remainder soon. This appeared to indicate that someone called Mark at the third party insurers had received an amended report. In other words the insurers must have known about the engine but were waiting for a receipt.

[16] The next witness was John David Kyle, the Glasgow branch manager for AEL. He explained that their business was to provide a replacement vehicle for someone in a no fault accident and to help to manage the claim against the third party. Contact with them could come from a number of sources, for example body shops or dealerships or insurance companies. 6/2 of process was the rental agreement signed by the client at the point of delivery of the vehicle. The lessor was AEL. In the instant case the vehicle provided was a Jaguar XJ Saloon 2.7 TDVi Sport Premium Diesel automatic and the mileage was 5,668. A non-waivable excess of £200 was payable in the event of an accident. The excess varied with the type of vehicle and the age of the driver. For this type of vehicle it would normally be between £1,000 and £1,500, perhaps up to £2,000. The pursuer had taken out collision damage waiver which reduced the liability. The vehicle was insured using AEL's own insurance. The witness said that the saloon hired was comparable to the pursuer's own vehicle. Both of them were four door saloons. It was agreed that the value of his was around £4,700 depending on its condition. A Sovereign was becoming a cult car and a collector's item. Good examples could go for £15,000 to £20,000 potentially. The pursuer's car fell into a group known as P8A. The replacement was also a P8A but its specification was not as high as the pursuers. The word "Sport" was a marketing term more than anything else. The vehicle hired was a lesser car than the pursuer's. Jaguar Sovereigns used to be called Daimler Sovereigns but the word "Daimler" was dropped when Jaguar took over. The Sovereign title was retained for the very top of the range. He was invited to look at number 7/2 of process, a report by a gentleman called Thomas Smith. Page 16 referred to a GTA agreed maximum settlement rate (excluding VAT) for all car hire claims from 1 June 2008 till 30 June 2009. The witness explained that GTA was a general tariff agreement set up between the Association of British Insurers and credit hire companies through a joint committee. It established the category for a vehicle and also certain trading conditions and rates for that category if a settlement was made within specific time limits. The vast majority of insurers signed up to the GTA. It allowed companies like AEL to ensure that if a client had, for example, a vehicle in the P4 category he would be provided with at least a P4 vehicle as a replacement for his own. The suffix "E" would indicate that the vehicle was an estate and "A" would indicate that it was an automatic. The pursuer's car was in the P8 category as also were such vehicles as a BMW 540, a BMW 550, a BMW 730, an Audi A6, an Audi A8, a Mercedes CLS 320, R320, E500 or S280, a Jaguar XJ6, a Jaguar S type, a Mercedes CLS 350 and a Lexus GS 450H. All of these were big cars. A Jaguar XJ6 2.7 was supplied and it was also a P8. The second column in the table on page 16 was, said the witness, the rate for settlement under the GTA terms of payment. It was the agreed discount rate if a bill was settled within a period of, say, thirty days. It was one of the elements of a daily hire rate. It could be uplifted by £5 per day for an automatic and for an estate. One could normally negotiate a rate if one knew how long a hire would be for but invariably one did not so it was hard to determine what other rate could be negotiated. This rate would be quoted at the point of settlement, not at the beginning. Collision damage waiver would normally be between £12 and £15 per day. That would bring the excess down. All these rates were exclusive of VAT. He was referred again to 6/2 of process and in particular to clauses 1.5, 1.6, 1.11 and 2.1. He was also referred to clause 3.4 which bound the hirer to take all reasonable steps to keep the rental period to a minimum. I have already referred to Clause 3.6 and Clause 5.1.

[17] He said that 7/4 was the advice from the engineers who had valued the pursuer's vehicle, Strange Jeens & Mathison. They had been given additional information about a new engine and this was acknowledgement of the new valuation on that basis. The insured must have told them about the reconditioned engine either that day or some time before it.

[18] 6/3 of process was a statement which was compiled on the basis of entries on his company's CMS. He said that the company's team in Birmingham compiled it and he validated the document. It set out a timescale of various events which took place. The client's vehicle was hit in a car park and was a total loss when valued. A replacement vehicle of the same type was provided until the claim settled and the witness supervised the allocation of the vehicle and its delivery and collection. A credit repair instruction was sent to the repairers on 10 November 2008. That was the date of the accident. The repairers were Mitchell Inglis in Glasgow. The plan amounted to an agreement with the repairers that they would be paid within 30 days. Notification of the claim was sent to the third party insurer, the defenders, that same day. On the following day the repairers confirmed that the engineer's instructions had been received. Strange Jeens & Mathison were independent engineers. They went to the repairers and had a look at the vehicle before reporting. On 13 November 2008 AEL were told that the vehicle was deemed a total loss. On 19 November 2008 Mr Pritchard from AEL called the defenders and told them that the vehicle was a total loss. He was advised that liability was not in dispute. On 24 November 2008 Mr Pritchard called the defenders to confirm that the engineers report had been received and to ask if they were in a position to make payment. Clause 14 reads as follows:

"204/11/2008 12:59:58 D Pritchard at AEL called the TPI to confirm the engineer's report received and if in a position to make payment. AEL were advised to fax over amended report and advised original received and will call back in a few days to confirm payment has been issued."

The witness assumed that the amended report would be a copy of the letter from Strange Jeens & Mathison accepting the increase in value because of the reconditioned engine. Presumably the defenders knew of the new engine then. On 25 November 2008 AEL received payment from the defenders and on 27 November 2008 Mr Pritchard called the pursuer's partner Mrs Tremble as they had received a payment that was not acceptable to them. That same day J Law at Accident Exchange spoke to the pursuer who called again and advised that he was not accepting the payment. That same day, shortly afterwards, D Pritchard called the defenders and spoke to someone called Mark who advised that the amended report had been received and was due for review for that day. Mr Pritchard called and advised the pursuer that the payment was an interim one and that the defenders should issue the remainder soon. On 4 December 2008 an S Lawson at AEL spoke to Derek from the repairers to say that the vehicle was still there. AEL advised that the pursuer was keeping the vehicle so would probably collect it once the remaining balance had been paid to him. That same day G Coceci at AEL spoke to the pursuer who called in to advise that the other cheque had not been received as yet and was told that it was in the process of being issued. On 8 December 2008 D Pritchard called the defenders and spoke to Mark Kent. He advised that no payment had been released as the defenders were awaiting a purchase receipt to validate the increase in the pre-accident valuation. AEL asked Mr Kent if the engineers had been contacted to confirm that they had one. Mr Kent requested that AEL call the engineers and ask them to fax over the receipt. AEL advised it would be quicker for him to confirm with the engineers and organise it himself. Mr Kent advised that he would request the engineers to send a copy and raise payment. On 8 December 2008 K Shelley of AEL spoke to Mr Kent who called to advise that he had spoken to the engineers about the receipt and had been advised that it should come from AEL and not the engineers.

[19] On 11 December 2008 D Pritchard spoke to the defenders to confirm that the increased payment had been issued and was advised that the purchase invoice was still unavailable. AEL called the engineers who told them that the invoice was not on file. That same day, at a later point, D Pritchard called the pursuer and left a message requesting that he called back as he needed to re-send the purchase invoice to AEL. On 17 December 2008 J Law at AEL spoke to the pursuer or Margaret Tremble who called and was very unhappy that he or she had not received payment. AEL advised that they had no notes to confirm that they had received payment. Later that day D Pritchard called the pursuer to advise that they had not received the purchase invoice but the pursuer said that it had been sent on several occasions. A minute or so later D Pritchard made enquiries and confirmed that no documentation had been received and nothing had been scanned on the system. Attempts were made to call Mrs Tremble but the number kept ringing out. A few minutes later D Pritchard called the pursuer who gave him Mrs Tremble's number and indicated that she would know the number the documents were faxed on. AEL spoke to Mrs Tremble who could not advise the number but she said that she had spoken to someone previously who had said that AEL had received the document. AEL told her this was not the case and asked her to fax the document again. The witness said that thereafter Christmas and New Year intervened and that was their busiest period of the year. The next entry was for 13 January 2009. D Pritchard of AEL called the pursuer's mobile and left a message to the effect that they would need to terminate the hire as he had not provided the receipt after numerous requests. A letter to that effect was also sent.

[20] On 14 January 2009 D Pritchard spoke to the pursuer who called to discuss the matter and indicated that if the document was not received by 15:00 hours on 15 January then the vehicle would be taken back. The pursuer advised that he had sent the invoice over seven times. He was advised to send it to AEL on 08700 116 725 with the reference number on it and to call once it had been sent so that AEL could confirm it had been scanned onto the system. That same day the pursuer called to ask if the copy invoice had been received. AEL told him it had been received but the details could not be read. A fax was received later on that day by D Pritchard but it was illegible. AEL called the repairers to confirm if they had received a copy of the invoice and were told that nothing like that had been received. Shortly after that on the same day D Pritchard called the pursuer to advise him of the position and the latter said that he had spoken to Peter Lorimer from whom the pursuer bought the engine. AEL called Mr Lorimer who said he had faxed the purchase invoice several times and was reluctant to do so again. He was nonetheless requested to fax it again on 01675 435123.

[21] A few minutes later D Pritchard called the pursuer and told him that the copy which had been received from Mr Lorimer was better but was still slightly illegible. The pursuer was requested to send a hard copy to AEL by special delivery on the following day and they would then try to speak to the defenders.

[22] A few minutes later D Pritchard called the defenders and spoke to someone called Adam. He was advised to email the copy invoice over. AEL told him that the copy was not the best but a hard copy had been requested. The witness said that the defenders would have received the email that same day.

[23] On 21 January 2009 D Pritchard called the pursuer to confirm if the additional payment had yet been made but it had not. On 22 January 2009 D Pritchard called the defenders to ask when they were going to issue the increase to the pursuer. Someone called Kelly told him that they had written to them and advised that they could not open the attachment with the purchase invoice and requested that a hard copy be posted to the claims department at Milton Keynes. The witness pointed out that the defenders did not email them to say they could not open the attachment. They could easily have done so. They only found out that that was the position when D Pritchard called them. Opening attachments should be an easy thing to do. While there was an indication that the defenders had written to AEL he would have expected a response by email. On 29 January 2009 D Pritchard called the defenders to find out if the increase had been issued to the pursuer. Someone called Sue Chafer said that a letter was issued on 28 January 2009 advising that the purchase invoice attachment could not be opened and requesting information as to what purpose it would serve. The previous conversations and details were relayed to her and she was told that the pursuer needed the increased payment. She advised that she would place an urgent memo on the claim. The witness said that there was no note in the case management system about sending a hard copy of the document to Milton Keynes but it was sent at some point. On 3 February 2009 D Pritchard received a letter from the defenders and called the pursuer to confirm why the engine had been replaced. He said that the engine had a fault. AEL indicated that they would call the engineers and the defenders and confirm the details. The witness had no idea why the defenders needed to know why the engine was replaced. He suspected that it might be because different people had been dealing with the claim. On 9 February 2009 D Pritchard called the pursuer to find out if payment had been received and was told that there was nothing as of yet. D Pritchard called the defenders a few minutes later and spoke to someone called Kelly who advised that payment was issued on 6 February 2009. Payment was received by AEL on 9 February 2009 and it was passed to the handler to confirm that it was in order to send it to the pursuer. On 10 February 2009 D Pritchard called the pursuer and advised that payment had been received. The pursuer was asked to call once he himself had received the payment.

[24] On 14 February 2009 K Hiley at AEL called the pursuer and he confirmed that payment had been received. Arrangements were made to collect the replacement vehicle for 20 February 2009. The credit hire was terminated on that latter date. It was put to the witness that the pursuer had indicated that he returned the car before he cashed the cheque. The witness said that that was possible because they allowed a period of grace after receipt of the cheque for clearance and possible replacement of the vehicle by way, for example, of buying a new car. He said that the new valuation would have been apparent to AEL and the defenders around 24 November. He could not say exactly when the pursuer knew of the need for the replacement receipt. He might have been informed on the phone informally or he might not have been. Certainly by 11 December 2008 he was being asked to re-send it so presumably it was some time before that. If the pursuer had sent it seven times or so, it had, for some reason, disappeared into the ether. Another problem was the defenders' inability to open the attachment which took up another six to eight days. There were several more days delay when the defenders wanted to know why the engine was replaced and there was no reason why they needed to know that. If the pursuer was sending things as he said he was then he was acting quite reasonably and any delay was outwith his control.

[25] In cross-examination he was asked if any attempts had been made to recover the hire charges from the pursuer. Objection was taken to this line on the basis that the contract was enforceable and the line was irrelevant. Mr Balfour's position was that he was concerned that the agreement would not be in force rather than whether it was enforceable. I allowed the questioning to continue subject to competency and relevancy. The witness was not aware that any attempt had been made to recover from the pursuer. He was asked if AEL would sue him if the current action was unsuccessful and he answered in the affirmative. He said that this was the standard practice. He was asked if he was aware of the case of Clark v Edinburgh City Council, of which more later. Again objection was taken to this and I allowed the line to continue subject to competency and relevancy. He said he did not know if the balance had been sought from Mr Clark. He would not accept a suggestion that if the pursuer was unsuccessful no attempts would be made to recover from him. In the circumstances the evidence did not advance the defenders' case and the objection is effectively superseded. He was asked whether AEL were agents for the pursuer and he said he would not say that. He agreed that they were authorised to act on his behalf. He also agreed that AEL were advised of the total loss on 13 November by Strange Jeens & Mathison. While AEL were told of the total loss on 13 November the defenders were not told about this until 19 November. He was asked why there was a delay of six days and he said he suspected that there was a weekend in there. He agreed that the 13 November 2008 was a Thursday and that 19 November was a Wednesday. When it was suggested that they could have been told sooner he indicated that one could always contract the timeline. He agreed that it was clear from 7/4 of process dated 20 November that a receipt for the reconditioned engine had to be produced. He agreed that it should be possible to obtain and produce a receipt very quickly but it was not always the case. He did not know when the pursuer was first asked to provide a receipt. It was suggested that when K Shelley at AEL spoke to Mark Kent on 8 December and was advised that the receipt had to come from AEL and not the engineers it was plain that AEL were to obtain it. In response he said that the responsibility was placed back on them. He denied the suggestion that it was in AEL's interests for the period of hire to be as long as possible. Their performance was measured by efficiency and they would be doing themselves no favours in the market place otherwise. He reiterated that the defenders did not get back to them about the difficulty in opening the attachment. He agreed that by 14 January 2009 Mr Lorimer had sent a better copy which was still slightly illegible and that AEL had requested a hard copy. He said that AEL wanted it to be the best. He did not know which part the defenders thought was illegible or what they thought was important. He could not say when AEL obtained a hard copy or sent it on. It was suggested to him that since reference was made to a letter being sent on 28 January 2009 stating that the purchase invoice attachment could not be opened it was plain that the defenders had not even by then received a hard copy but he did not know the answer to that. He suggested that perhaps it might have been in the internal mail for a couple of days. The person dealing with this matter for the defenders kept changing. He was asked whether the payment on 9 February was by cheque or bank transfer and suspected that it was a cheque payable to AEL. The pursuer would then get a cheque going out from them the same day. He had no knowledge of the suggestion that the defender had paid a total of £4,482.87 to AEL but in fact that was not disputed. The valuation of the pursuer's vehicle was £3,700 before it was known that there was a replacement engine. He was asked what he thought the value of the hire vehicle was and indicated that he thought it was probably in the low £40,000s. It was much newer than the damaged one. It was suggested that it was a far superior vehicle and he said that it was like for like. The pursuer's vehicle had a very low mileage for its year and it was in good condition. Its age did not make it any less of a good vehicle. It was a good swap in terms of drivability.

[26] In re-examination he said that 6/2 was a contract to supply a rented vehicle and the pursuer and AEL were the parties. The word agency was not used. In terms of paragraph 3.6 the pursuer authorised them to monitor the repair or replacement of his vehicle and was to provide them with all the information reasonably needed for that purpose. AEL were the interface between the pursuer and the third party. He confirmed that around 24 November 2008 the defenders knew of the increase in value. The replacement vehicle fell into the P8 category. He did not know what else, if anything, the defenders did to expedite the process. He did not think that they were particularly proactive since most of the calls came from AEL rather than the other way around.

[27] The next witness was Kenneth Perry. He worked with a company called APU Limited and referred to 6/4, a witness statement which he had prepared. APU owned and operated a software programme called Spot Rate Check to show spot hire quotes for various groups of cars in different areas. Analysts entered information into it and the programme would collate it so that others could access it later. There were around fifteen solicitors in the UK and five or six credit hire organisations who were registered users. Four data analysts were employed full-time and they used the internet to check the rates and enter them on a bi-monthly basis. The database was divided into 73 areas and they were checked for the groups of cars designated by the Association of British Insurers. Quotes had been obtained from the internet websites of over fifty five rental companies since April 2009 and in excess of 55,000 rates were obtained and collated in each bi-monthly survey. Spot hire charges were usually lower than credit hire charges. Anyone who registered could use the service. It covered the whole of the UK and all of the groups of vehicles available and no-one else in the UK had collated this sort of information. The witness thought that this was the best programme he had seen for producing this type of information. The second page of the annex to his statement contained details of the pursuer, his vehicle and the daily rate of hire from AEL. He said that when the information in the instant case was put in, 29 companies in the Glasgow area were capable of providing a quote but in fact 15 individual quotes were obtained from 9 companies. The top rate was from a firm called Sports Car Hire who charged £405 net of VAT and had a non-waivable excess of £5,000. The lowest was from Prestige Car Hire whose spot rate net of VAT was £75 and who had a non-waivable excess of £2,000. In summary the system searched a total of 40,762 spot rate quotes nationally and identified that it could return a quote or multiple quotes from 9 companies of the 29 companies in the Glasgow zone. There was a filtering process to see whether they could provide the type of car and also took account of the age, driving experience, driving qualification and employment experience of the driver. The witness went on to explain the methods used. The rates were gathered for comparison on the basis of a hire period where the hire was for between 7 and 28 days, they included the excess waiver charge and excluded VAT, the driver had to meet the minimum age requirement for the rental company. Any additional charge for delivery and collection was excluded, the hire was for a start date 24 or 48 hours after the inquiry, the driver must not have had more penalty points or an excluded endorsement on his or her licence than permitted by the rental company and had to have had more than the minimum years of driving experience required by the rental company. Reference was made to the grouping of the motor vehicle as well as to geographic factors and availability of the vehicles. The analysed results were set out at page 7 of 11 of the annex and related to a number of vehicles including certain models of Audi, BMW, Mercedes and Jaguar. The witness indicated that these were all P8 vehicles. Sports Car Hire's spot rate was £405 per day with a non-waivable excess of £5,000. Pearl Car Rental's rate for a BMW 730(A) and for an Audi A8 3 litre (A) were both £225 with a non-waivable excess of £3,000. City Inter Rent's rate for a BMW 730(A) was £200 per day with a non-waivable excess of £2,500. Rapid Drive's rate for a Mercedes CLS 350(A) was £195 per day with a £2,000 non-waivable excess, Exclusive Car Hire's rate for the same model was £185 per day with a non-waivable excess of £2,500. Rapid Drive's rate for a BMW 730(A) was £185 per day with a non-waivable excess of £2,000, Prestige Car Hire's rate for the same vehicle was £175 per day with a non-waivable excess of £3,000, Guy Salmon's rate for a Jaguar XJ6(A) was £173.61 per day with a non-waivable excess of £500, Dream Car Hire's rate for a BMW 730(A) was £170 with a non-waivable excess of £3,500, City Inter Rent's rate for a Mercedes CLS 350(A) was £150 per day with a non-waivable excess of £2,000, Prestige Car Hire's rate for the same model was £145 per day with a non-waivable excess of £2,000, Guy Salmon's rate for the same model was £139.50 with a non-waivable excess of £500, Express Rent-A-Car's rate for the same model was £100 per day with a non-waivable excess of £1,500 and Prestige Car Hire's rate for a Mercedes R320(A) was £75 per day with a non-waivable excess of 2,000. AEL's credit rate was less than the spot rate charged by Sports Car Hire.

[28] He was referred to 7/2 of process, the statement of Thomas Smith. Page 12 of that showed results for three companies when they were contacted on 31 December 2009. Thrifty Car and Van Rental's rate for a Mercedes CLS four door or similar (automatic) was £148.16 daily or £674.12 weekly. There was an excess (non reducible) of £1,000 and a deposit of £1,000 by way of credit or debit card was required. The vehicle was said to be available on 10 November 2008. Enterprise Rent-A-Car would charge £119.99 daily or £839.93 weekly for a Mercedes Benz E Class, a BMW 5 Series or similar (automatic) with a non reducible excess of £1,000 and a deposit of £500. Such vehicles were available on 10 November 2008. Europcar would supply a Jaguar XJ 2.7 D Sovereign 2 or similar (automatic) for £224.10 daily or £1,190.73 weekly with a non reducible excess of £1,000, a delivery charge of £10 and a deposit of £250. Such vehicles were available on 10 November 2008. Mr Perry said that Mercedes Benz E Classes and BMW 5 Classes were not in the P8 category and the Jaguar XJ 2.7 D Sovereign might be P8 or in a lesser group. The witness said that when the spot rate check was carried out these companies were not advertising these cars. If they had been they would be on the report which he had produced. He did not know how Mr Smith's methods compared with his own. It appeared that he had not used a computer programme but had spoken to people within a short time and he did not know what he said to them. For all he knew when people told them that a vehicle was available in November 2008 they might have said anything to him.

[29] In cross-examination he agreed that he had been with AEL before he joined APU in June 2010. APU was a wholly owned subsidiary of AEL. It was suggested that he was not independent but he said the information could be taken from a screen and could be checked. He did not know if the solicitors who used the firm's services worked for credit hire companies. It was suggested that the database was put together to justify the rates which AEL charged but he denied that. It also showed the lowest rates. At one point during his evidence in chief he referred to AEL as "we" and again it was suggested that he was not independent but he denied that. He had no input into the report himself. He checked that the data was correct and that the basic hire requirements were there and he just pushed the button. The report would look for the information nearest the date under consideration. He himself did not compile any of the data in the database. The companies surveyed were all in the Glasgow zone or could provide a car there. They might not have an office there. He knew of Thrifty Car and Van Rental and was asked why they were not in the survey in the Glasgow zone. His answer was that the survey listed the companies who had the vehicles in their listing at the material time. It was put to him that there was no listing from Enterprise and Europcar but he said that Guy Salmon was the same company as Europcar. A number of the companies were interlinked. It was suggested that Mr Smith did not get a quote from Guy Salmon which suggested that the database was not comprehensive but the witness believed that it was. He did not know, for example, if when Mr Smith phoned Europcar he was put through to Guy Salmon. Mr Perry's document contained a number of references to the individual companies. City Inter Rent were not based in Glasgow but would deliver. Dream Car Hire were based in Abingdon and again would deliver to Glasgow. Exclusive Car Hire supplied throughout the UK. Express Car Rental was based in London and would have to deliver.

[30] In re-examination he said that the programme was a scientific one. He was asked what the effect of delivery would be on a spot rate and said it would increase the charges. That was why he simply showed the flat rate.

[31] With that evidence the pursuer's case was closed.

[32] The only witness called for the defenders was Thomas Smith, to whom I have already referred. He was a technical claims manager of Ravenstone - UK. They were a firm of claims consultants who offered a range of services to, primarily, the motor insurance industry. He was a claims assessor and part of his role entailed surveying rates available in the UK self drive hire market. He had never been employed in the motor trade but had knowledge of their operations. His company received instructions from the defender's solicitors to conduct inquiries into the spot hire rates for a Jaguar Sovereign 4 litre automatic or similar type of vehicle in the Glasgow area on 10 November 2008. Page 16 of his statement was the GTA table to which I have already referred which showed the groupings of various vehicles. If there was no like for like he would look for a similar vehicle to make comparisons. In order to conduct the survey he used a checklist/information sheet. The essential details of it were the location of the hire, the claimant's personal details, the date and duration of the hire, details of the claimant's own vehicle and the vehicle hired and the credit hire charges, including itemised add ons. There was an add on for example if a vehicle was an automatic. The checklist was shown at page 11 of his document. The pursuer's vehicle was a prestige vehicle and a number of companies hired them. He searched through some companies known to himself using the pursuer's postcode. There were three companies referred to in his report and perhaps he checked another two or three. It was New Year when he did the checking and hire companies at that time had a shortage of vehicles so he was slightly limited. He had experience of speaking to hire companies. They were quite off hand when he told them what the nature of his inquiry was so his practice was to call on the basis of being a mystery shopper. He would get the current rate then he would contact the company by telephone and check if the vehicle was available at the time. He would check the current rates and what the insurance cover was etc and he would confirm that the vehicles were available at the time of the client's hire. Websites for the companies he contacted and which are featured in his statement were set out at pages 13, 14 and 15 and related to Thrifty Car and Van Rental, Enterprise and Europcar respectively. I have already touched upon the results of his survey under reference to Mr Perry's evidence. Mr Smith said that the Mercedes CLS four door vehicle available from Thrifty Car and Van Rental was similar to the pursuer's vehicle. A one day hire would cost £148.16 and a weekly rate of £674.12 was given. This was without VAT. He took the rate off the internet and then phoned the companies concerned to confirm the rates. At page 8 of his statement he worked out what each day would cost at the weekly rate and came to a figure of £83.74. For 103 days that came to £8,625.22 and with the addition of VAT at £1,293.78 the total figure was £9,919. In relation to Enterprise, where a Mercedes Benz E Class and a BMW 5 Series or something similar were available the daily rate was £119.99. When the weekly rate was divided by seven it came to £104.34. That gave a total for 103 days of £10,747.02 and with the addition of VAT at £1,612.05 the figure came to £12,359.70. Page 10 dealt with Europcar and the hiring of a Jaguar XJ 2.7 D Sovereign 2 or similar. The daily rate was £224.10 and the weekly rate was £1,490.73. When the weekly rate was divided by seven it came to £147.92. When that was multiplied by 103 it came to £15,235.76, added to that a delivery and collection charge of £8.70 and VAT of £2,286.67 giving a total of £17,531.13. I was not entirely convinced that his arithmetic is correct but Mr Balfour dealt with that in his submissions. He worked out a gross daily rate for each company. Those figures appear at page 6 of his report. As I understand it it is calculated for each company by multiplying the daily hire rate and other daily charges by 103, adding on VAT and other add ons then dividing the whole by 103 again. The gross daily rate for AEL was £350.25, that for Thrifty Car and Van Rental was £96.30, that for Enterprise Rent-A-Car was £119.99 and that for Europcar was £170.21. The average excluding AEL was £128.83.

[33] In cross-examination he said that he was a retired police officer who was used to taking statements but he had been doing this work for about two years. He was usually employed by defenders. A basic internet search was done for spot hire checks. He looked at companies which were recommended to him by Ravenstone when he started training and then companies which came to his knowledge as he went along. The figures were recorded on a spreadsheet. There was nothing specific in relation to spot hires. The daily rate used in his calculations was the weekly rate, which was a discounted one, divided by seven. He had only prepared three different comparisons. He was only aware of five or six companies who provided prestige cars and his investigations were limited because of the time of year. It was all done on a manual basis, as it were, as a mystery shopper. He had no reason to question the responses of the people on the other end of the line that the car would have been available. While they were perhaps trying to get him off the phone he was in no position to know that. He called them on 31 December 2009 so people would have been casting their minds back and saying that the car was available a year previously. He was asked to compare his figures on page 12 with those on page 8. He said that page 8 was based on the weekly rate. If the daily rate were used then the figures would be £15,247.09 as opposed to £9,919. A similar comment could be made in connection with the figures for Enterprise and Europcar. There was also a deposit in these cases and AEL did not require one. The Jaguar would seem to be the car which was the most similar to the one involved in the accident and the daily rate there was £224.10 with an excess of £1,000 and a deposit of £250. Europcar was the only company which had a Jaguar available. He indicated also that he had found an insurer who would cover the excess for a fee and bring it down to nothing.

[34] In re-examination he said that £55 a year for an annual policy would cover an excess of £2,000 to £3,000.

With that the defenders proof was closed.

Submissions for the pursuer

[35] Ms Casey submitted that the pursuer was credible and reliable. I was reminded that he said he was dyslexic and had difficulty in reading. She took me through his evidence and reminded me, amongst other things, that he needed his vehicle for his business. It was to be assumed that his insurance broker got in touch with AEL and he was obliged to meet their costs. He had authorised them to monitor the repair and was obliged to give them such information as they needed in connection with it. He granted them the right to claim on his behalf. On 20 November 2008 Strange Jeens & Mathison wrote the letter dealing with the new valuation and requiring a receipt. At that stage the new value of the car was known to the third party insurers, the defenders, and all that remained was the question of the invoice. The defenders were a large company with a number of staff. The pursuer's evidence was that he had made some nineteen calls. His position was that he had sent the invoice non-stop. It was sent by various people from various places including probably to the defenders. Eventually arrangements were made. He wanted to return the car as soon as he realised how much it cost. None of the delays was his fault. The insistence on the copy invoice, the delays in getting it and the failure to open the email could not break the chain of causation. They were not novus actus interveniens and he acted reasonably in mitigation.

[36] Mr Kyle was also said to be credible and reliable. He had worked with AEL since 2004. When he went through the timetable per 6/3 of process, it appeared that the pursuer and AEL made all the running while the defenders were not proactive and there was no continuity in their personnel. He gave evidence of the GTA settlement tariff. There was no evidence of any relationship of agency between the pursuer and AEL. There was no heading of agency in the contract for hire and the only duty on the pursuer was to provide the information which AEL reasonably needed. It was never put to the pursuer that AEL were his agents. At most Mr Kyle said that AEL operated as an interface between the pursuer and the various parties concerned. There was nothing on Record dealing with the question of agency. I pause to note that this is incorrect since the matter is raised at page 13C in Answer 4. When I pointed that out Ms Casey said that the relationship between credit hire companies and clients such as the pursuer had not been categorized as agency in the case law.

[37] She went through Mr Perry's evidence and criticised that of Mr Smith. He picked up his knowledge as he went along and his findings were set out on a Microsoft spreadsheet. His approach was not as scientific as that adopted by Mr Perry's company, who had thousands of spot rates on their database which could be refined according to the facts of each specific case. Their results showed a range of different quotes and they were not designed to support a particular answer. The method was objective and more comprehensive. In any event Mr Smith referred to weekly rates and the total figures might not be comparable. He conceded that he did not approach very many companies, having done his research at New Year. AEL worked on the basis of a daily rate because they did not know how long a hire was going to be at the beginning of it. It might be that the answers to the question whether vehicles were available at the material time were in the affirmative just to get Mr Smith off the phone. His evidence was limited to three options as I have already described them.

[38] Ms Casey then turned to the authorities. The first case she referred to was that of Dimond v Lovell [2002] 1 AC 384. The facts of that case are reasonably well known and I need not go into them. It was decided principally on the basis that the credit hire agreement was a regulated consumer credit agreement and was unenforceable for failure to comply with the requirements of the Consumer Credit Act 1974. A number of their Lordships opined that where an agreement with a credit hire company is enforceable the plaintiff will not be able to recover the full amount charged since he obtains more from the agreement than the cost of a replacement car and the additional benefits were not recoverable. The recoverable loss after allowance has been made for the additional benefits will normally be the market rate for hiring a car from an ordinary car hire company. Ms Casey referred in particular to the speech of Lord Hoffmann at page 401 where he said amongst other things:

"My Lords I would accept the judge's finding that Mrs Dimond acted reasonably in going to 1st Automotive and availing herself of its services. I am sure that any of your Lordships in her position would have done the same. She cannot therefore be said not to have taken reasonable steps to mitigate her damage.

But that does not necessarily mean that she can recover the full amount charged by 1^st. Automotive. By virtue of her contract, she obtained not only the use of the car but additional benefits as well. She was relieved of the necessity of laying out the money to pay for the car. She was relieved of the trouble and anxiety of pursuing a claim against Mr Lovell or the CIS. She was relieved of the risk of having to bear the irrecoverable costs of successful litigation and the risk, small though it might be, of having to bear the expense of unsuccessful litigation. Depending upon the view one takes of the terms of the agreement, she may have been relieved of the possibility of having to pay for the car at all."

[39] He found that the additional benefits were not recoverable but went on, at page 402, paragraph G, to say the following:

"How does one estimate the value of these additional benefits that Mrs Dimond obtains? It seems to me that prima facie their value if represented by the difference between what she was willing to pay 1^st. Automotive and what she would have been willing to pay an ordinary car hire company for the use of a car. As the judge said, 1^st. Automotive charged more because they offered more. The difference represents the value of the additional services which they provided. I quite accept that a determination of the value of the benefits which must be brought into account will depend upon the facts of each case. But the principle to be applied is that in the British Westinghouse [1912] AC 673 and this seems to me to lead to the conclusion that in the case of a hiring from an accident hire company, the equivalent spot rate will ordinarily be the net loss after allowance has been made for the additional benefits which the accident hire company has provided."

[40] It was plain, said Ms Casey, that pursuers were not entitled to betterment.

[41] She then turned to the case of Lagden v O'Connor [2003] UKHL 64. Unlike the plaintiff in Dimond the plaintiff in that case was impecunious. Ms Casey quoted extensively from the speech of Lord Hope of Craighead who categorized the question as being whether the decision in Dimond v Lovell applied to a claimant who, due to lack of funds or for any other reason which was reasonably foreseeable, had no alternative but to use the services of a credit hire company. Lord Hope set out the facts in the case and quoted from Dimond v Lovell. Paragraphs 27 to 31 read as follows:

"27 Mr Lagden's claim was, in essence, a claim for the loss of use of his car while it was in the garage undergoing the repairs which needed to be done as a result of the accident. There was no evidence that he would have suffered financial loss as a result of being unable to use his car during this period. But inconvenience is another form of loss for which, in principle, damages are recoverable. So it was open to him, as it is to any other motorist, to avoid or mitigate that loss by hiring another vehicle while his own car was unavailable to him. The expense of doing so will then become the measure of the loss which he has sustained under this head of his claim. It will be substituted for his claim for loss of use by way of general damages. But the principle is that he must take reasonable steps to mitigate his loss. The injured party cannot claim reimbursement for expenditure by way of mitigation that is unreasonable. So the motorist cannot claim for the cost of hiring another vehicle if he had no reason to use a car while his own car was being repaired - if, for example, he was in hospital during the relevant period or out of the country on a package holiday. If it is reasonable for him to hire a substitute, he must minimise his loss by spending no more on the hire than he needs to do in order to obtain a substitute vehicle. If the defendant can show that the cost that was incurred was more than was reasonable - if, for example, a larger or more powerful car was hired although vehicles equivalent to the damaged car were reasonably available at less cost - the amount expended in the hire must be reduced to the amount that would have been needed to hire the equivalent.

28. There is however another principle, as was made clear in Dimond v Lovell..., that must be given effect to in the calculation of the amount of the damages. This is the principle that requires additional benefits which are obtained as a result of taking reasonable steps to mitigate loss to be brought into account when the damages are being calculated. The question which has been raised in this case is whether this principle is subject to modification where, if he is to minimise his loss, the claimant has no choice but to accept those additional benefits.

29. As Lord Hoffmann said, at p. 402A, the leading case on this subject is British Westinghouse Electric and Manufacturing Co Limited v Underground Electric Railways Co of London Limited [1912] AC 673. In that case the turbines which were purchased in place of the defective turbines were more efficient than the defective turbines supplied by British Westinghouse, even if those turbines had been in accordance with the specification in their contract with the railway company. In the result the railway company obtained benefits over and above their contractual entitlement. That was their choice, and it was a reasonable and prudent choice to make in the circumstances. But it was held that it was nevertheless necessary to balance loss against gain when the amount of the damages was being calculated.

30. So far so good. But what if the injured party has no choice? What if the only way that is open to him to minimise his loss is by expending money which results in an incidental and additional benefit which he did not seek but the value of which can nevertheless be identified? Does the law require gain to be balanced against loss in these circumstances? If it does, he will be unable to recover all the money that he had to spend in mitigation. So he will be at risk of being worse off than he was before the accident. That would be contrary to the elementary rule that the purpose of an award of damages is to place the injured party in the same position as he was before the accident as nearly as possible.

31. Some guidance as to the approach which should be taken to this problem is provided by The Gazelle (1844) 2 W Rob 279. That was a case where a vessel was damaged by collision. The question was as to the amount that was to be paid to the owners of the damaged vessel for its repair. At p.281 Dr Lushington said that the measure of the indemnification to which the owner of the damaged vessel was entitled was co-extensive with the amount of the damage:

'The right against the wrongdoer is for a restitutio in integrum, and this restitution he is bound to make without calling upon the party injured to assist him in any way whatsoever. If the settlement of the indemnification be attended with any difficulty (and in those cases difficulties must and will frequently occur), the party involved must bear the inconvenience. He has no right to fix this inconvenience upon the injured party; and if that party derives incidentally a greater benefit than mere indemnification, it arises only from the impossibility of otherwise effecting such indemnification without exposing him to some loss or burden, which the law will not place upon him.'

The principle which emerges from this passage is that it is not open to the wrongdoer to require the injured party to bear any part of the cost of obtaining such indemnification for his loss as will place him in the same position as he was before the accident."

Lord Hope went on to consider the case of Harbutt's "Plasticine" Limited v Wayne Tank and Pump Co Ltd [1970] 1 QB 447 and then at paragraph 34 said the following:

"Of course, the facts in these two cases were quite different from those in this case. But I think that the principles on which they were decided are of general application, and it is possible to extract this guidance from them. It is for the defendant who seeks a deduction from expenditure in mitigation on the ground of betterment to make out his case for doing so. It is not enough that an element of betterment can be identified. It has to be shown that the claimant had a choice, and that he would have been able to mitigate his loss at less cost. The wrongdoer is not entitled to demand of the injured party that he incur a loss, bear a burden or make unreasonable sacrifices in the mitigation of his damages. He is entitled to demand that, where there are choices to be made, the least expensive route which will achieve mitigation must be selected. So if the evidence shows that the claimant had a choice, and that the route to mitigation which he chose was more costly than an alternative that was open to him, then a case will have been made out for a deduction. But if it shows that the claimant had no other choice available to him, the betterment must be seen as incidental to the steps which he was entitled to take in the mitigation of his loss and there will be no ground for it to be deducted."

Lord Hope went on to discuss the number of policy considerations and also held that the rule laid down in the well known case of the Liesbosch should be departed from. In short he held that while a claimant who was not impecunious was merely entitled to the spot rate that did not apply in the case of a claimant who was impecunious. That of course is not the position in this case as it is admitted on Record that the pursuer is not impecunious. Nonetheless Ms Casey said that the four principles identified by Lord Hope were of critical relevance in the instance case. These were, firstly, that a pursuer must take reasonable steps to mitigate his loss, secondly that additional benefits must be taken into account, thirdly, that it is not open to the wrongdoer to require the injured party to bear any part of the cost of obtaining indemnification and fourthly that it is for the defender to make out a case of betterment. It is not enough that an element of betterment can be identified. It must be shown that a pursuer had a choice and would have been able to mitigate his loss at less cost.

[42] She submitted that a wrongdoer could not insist that a pursuer make a loss, bear a burden or make unreasonable sacrifices. If it was shown that a claimant had no other choice and there was betterment that must be seen as incidental to the steps he took to mitigate his loss and there would be no grounds for it to be deducted. Paragraphs 57 and 58 of Lord Hope's speech ran as follows:

"57. In Mattocks v Mann [1993] RTR 13, 19 Beldam LJ, with whom Nourse and Stocker LJJ agreed, referring to his observations in Bolton v Price (unreported), 24 November 1989; Court of Appeal (Civil Division) Transcript No 1159 of 1989, said:

'I there said that at the present day it is generally accepted that, in what Lord Wright termed "the varied web of affairs" that follows a sequence of events after an accident of this kind, it is only in an exceptional case that it is possible or correct to isolate impecuniosity, as it is sometimes called, or the plaintiff's inability to pay for the cost of repairs from his own resources as a separate cause and thus terminating the consequences of a defendant's wrong. It seems to me necessary today to consider whether, having regard to all the circumstances of the case and the resources available to a plaintiff, resources known by the defendant or her representatives to be of a kind that will not be able to provide for the repairs themselves, in all the circumstances, the plaintiff has acted reasonably and with commercial prudence.'

58. The same approach has been adopted in Scotland. In Chanthall Investments Limited v FG Minter Limited, 22 January 1976 (reported on another point in 1976 SC 73) Lord Keith, sitting in the Outer House of the Court of Session said:

"I am of opinion that in each case where the matter arises it is a question of fact, in the particular circumstances, whether loss associated with the impecuniosity of the party claiming to have suffered loss was within the contemplation of the parties. Authority for this proposition is to be found in Trans Trust SPRL v Danubian Trading Co [1952] 1 KB 285."

This statement was approved by the Inner House in Margrie Holdings Ltd v City of Edinburgh District Council, 1994 SLT 971, 976-977, where the Lord President (Hope), delivering the opinion of the court said that the proper approach, consistent with the modern authorities, was to ask whether the loss was or was not foreseeable and that this was ultimately a question of fact in each case."

Ms Casey said that the approach generally was to look at the reasonableness of the pursuer. The question whether a pursuer acted reasonably and with commercial prudence applied universally and not just to impecuniosity. Whether loss was foreseeable was a question of fact in each case. Ultimately the question was whether the pursuer did anything to break the chain of causation. If the loss was foreseeable the pursuer was bound to mitigate it and obliged to take all reasonable steps. He would have had to have committed something of the order of a novus actus interveniens in order to break the chain of causation between the fault and the loss. The case law showed that losses of the kind claimed in the instant case, namely loss of use of a car, were recognised in law. The services provided by credit hire companies were not only a legitimate form of business dealing but were crucial and necessary to protect innocent pursuers who were the victims of no fault accidents. The yardstick for assessing what hire charges a pecunious pursuer paid in any case were the equivalent spot hire rates on the open market. The actual amount paid by such a pursuer and the reasonableness of that amount had to be judged within the framework of any spot hire rates that might be available on the open market.

[43] Ms Casey said that in the one case dealt with in the Court of Session, namely Clark v City of Edinburgh Council [2010] CSOH 144 Lord Turnbull had adopted this approach in relation to the termination of the period of hire. She referred to paragraph 22 of his Lordship's opinion where he held that in the circumstances of that case it was reasonable for the pursuer to retain the hired vehicle beyond the point when he knew that his own vehicle was beyond economical repair until he received settlement, since that was the method by which he was returned to his pre-accident position. The case was distinguishable on the facts, however, since the hired car was of a much higher specification than the damaged car.

[44] Ms Casey's general submission was that the proper approach to the pursuer's loss and mitigation of it by hiring another car was that adopted in Lagden and Dimond. The pursuer fell, strictly speaking, into the Dimond category. He suffered a loss and mitigated it. Nothing he did amounted to a novus actus interveniens. I had heard the spot rate evidence. Lord Turnbull adopted an average approach in Clark and no doubt I would reach my own view but Ms Casey's submission was that the amount paid was within the range of the spot rate evidence and was reasonable. I was entitled to consider that the entire period of hire, 103 days, was the responsibility of the defenders and I was moved to repel the defenders' pleas in law and grant decree in favour of the pursuer.

Submissions for the defenders

[45] At the outset of his submissions Mr Balfour set out a timetable of the circumstances as disclosed in the evidence. In summary the pursuer's vehicle had a value of under £5,000. It was over 9 years old at the time of the accident. As a replacement he hired a vehicle with a value far in excess of his own at a cost of £350.24 per day. He did not realise that he had entered into a credit hire agreement and would not have entered into it had he known what it was as it was so expensive. Notwithstanding the fact that he knew that his vehicle was a total loss within a few days and had received payment of £3,700 within 18 days, he continued to hire the vehicle at the same rate for a further 85 days while waiting for payment of no more than £1,000. His car could have been repaired for £1,200 and the repair would have taken 4 days. Obviously Mr Balfour went into greater detail than that but for present purposes it is unnecessary for me to go into the evidence again.

[46] Mr Balfour identified that the issue between the parties was whether in the circumstances the pursuer had mitigated his loss. In that connection he referred, as had Ms Casey, to paragraph 27 of the speech of Lord Hope of Craighead in Lagden v O'Connor.

[47] He submitted that the fundamental principle was that the pursuer had to take reasonable steps to mitigate his loss and could not claim for expenditure that was unreasonable.

[48] He submitted that on the basis of the pursuer's own evidence by entering the contract and incurring liability to AEL he did not take reasonable steps to mitigate his loss. He accepted that he would not have entered into the contract had he known what it was. The only reason he did not know what he had entered into was his own failure to read it. The fact that it was a hire agreement was not something which was hidden away. It was plain on the face of the document. There had been some reference to his dyslexia and difficulty in reading but he was able to read and did not blame his dyslexia for his failure to read the contract. He did not read it because he thought it was a receipt for the courtesy car. In any event he could have asked what the document was and what it meant. Under reference to Mattocks v Mann and the pursuer's reliance on what was said by Beldam LJ, Mr Balfour submitted that a party could not be said to have acted reasonably and with commercial prudence when he entered a credit hire agreement without reading it or realising what it was. He could not be said to have taken reasonable steps to mitigate his loss when he entered into a contract creating a large potential liability in those circumstances. Had he acted reasonably he would have read the document, ascertained what it was and, according to his evidence, decided not to enter into it. The pursuer's claim was founded entirely on the credit hire agreement and he was not acting reasonably to mitigate his loss when he entered into it. On that basis any losses flowing from the agreement had not been reasonably incurred and were therefore not recoverable. The defender ought to be assoilzied. Mr Balfour accepted that the cases referred to showed that the House of Lords thought that credit hire companies provided important services and in Dimond it was accepted that it was reasonable to enter such an agreement but there was a curious feature of the understanding on which the House of Lords was proceeding in these cases. It was on the basis that if the claim was unsuccessful in practice the hire company did not pursue the hirer. He recognised however that that was not the evidence of Mr Kyle. He went on to submit that it would not have been reasonable to enter the contract even if the pursuer had read it, in light of his own evidence that he thought the rates were a joke. He could have had the car repaired at a cost of £1,200 in four days. Paragraphs 34 and 35 of Lagden talked about claimants having a choice. The context of that was a choice between a credit or a spot hire but the principle of choice was of universal application. The pursuer had a choice not to enter into this hire agreement at all. It was suggested that the question was whether the pursuer broke the chain of causation and that in some way a novus actus interveniens was required. He referred to the 18^th edition of McGregor on Damages. Paragraph 7-004 is in the following terms:

"....The first and most important rule is that the claimant must take all reasonable steps to mitigate the loss to him consequent upon the defendant's wrong and cannot recover damages for any such loss which he could thus have avoided but has failed, through unreasonable action or inaction, to avoid. Put shortly, the claimant cannot recover for avoidable loss."

[49] Mr Balfour also referred to paragraph 7-018 which criticises the suggestion that the matter could be couched in terms of causation. In other words a pursuer can only recover in effect of damage caused by the defender's legal wrong. McGregor says, inter alia:

"Now the matter can no doubt be put in this way in terms of causation but it does not tell us very much. What must be ascertained is whether the claimant has or has not acted, or failed to act, reasonably."

[50] Mr Balfour submitted that it was unhelpful and unnecessary to try and reformulate recognised principles.

[51] He went on to submit that if I were to take the view that the pursuer did act reasonably in entering into the agreement two further issues arose. Those concerned the period of hire and the rate at which the hire was charged.

[52] He submitted that the period of hire was wholly unreasonable and invited me to take the sort of approach taken by Lord Turnbull in Clark v The City of Edinburgh Council. In that case his Lordship considered whether AEL or the pursuer could be held responsible for any part of the period and therefore whether such a period should be excluded from that which was the responsibility of the defender.

[53] Having set out a chronology of the key dates according to the evidence he submitted that the pursuer's agents (a concept which will be discussed shortly) AEL were aware that the vehicle was a total loss on 13 November 2008 but did not advise the defender or seek payment until 19 November 2008, a period of six days. There was no explanation for this. Accordingly of the 18 days it took for payment to be received by the pursuer, six were the responsibility of AEL. A reasonable period to the date of receipt of payment would therefore have been 12 days.

[54] The pursuer explained that he ultimately had his vehicle repaired at a cost of approximately £1,200 and that the repair took four days. Once he was in receipt of the initial payment accordingly if he had acted reasonably to mitigate his loss he could have arranged for the repairs to be conducted and could have paid for them out of the funds which had been made available to him. He submitted that the same logic could have applied to the repair costs submitted by Strange Jeens & Mathison in 7/6 which amounted to £3,810.77.

[55] In the circumstances an additional period of no more than seven days would be reasonable to enable the pursuer to receive the payment and have the repairs conducted. A total of 19 days would be a reasonable period of hire and no allowance should be made for any further period after settlement of the pursuer's initial claim.

[56] There was no reason why any justification for an increased payment based on the reconditioned engine could not have been made at the outset. The letter from Strange Jeens & Mathison dated 20 November 2008, with the observation that a valid receipt should be made available, made it plain that the pursuer must have been aware of this issue before that date. He explained that he had provided a copy of the receipt immediately and that there was no reason why such a receipt could not have been made available to the defenders at this stage. Had it been made available to the defenders then it could be inferred that the initial payment would have been for the full £4,700. The fact that it was not was not the responsibility of the defenders. They would have paid the full amount had appropriate vouching been produced.

[57] Assuming I held that it was not unreasonable for the pursuer to continue the hire to await payment of the further £1,000 Mr Balfour submitted that the vast majority of the period between the payment of £3,700 and the termination of the hire was the responsibility of the pursuer and AEL. It was not the responsibility of the defenders. It ought to have been apparent from the letter of 20 November 2008 that an invoice was required to justify payment of the balance. The provision of such an invoice was plainly the responsibility of the pursuer and AEL. Mr Kyle accepted that the defenders would only get a copy of the receipt if it was sent to them by the pursuer or via AEL. Although the pursuer had made a reference to having sent the documents to the defenders, his evidence on the matter was vague and uncertain and was presented in the context of having sent a copy to everyone. There was no evidence that he was ever in direct contact with the defenders and it was unlikely that he had sent anything to them.

[58] Mr Kyle sought to place the blame for some of this period on the defenders because they received an email dated 14 January 2009 and were unable to open it. However the document attached to the email was illegible and AEL had asked for a hard copy. Plainly they themselves were not satisfied by the document. Any delay in opening the attachment made no difference as it was not of satisfactory quality. In any event AEL ought to have been able to provide a copy to the defenders in a format which was capable of being accessed by them. Any delay caused by difficulties in opening the attachment did not detract from the period which was caused by the failure by the pursuer and/or AEL to provide a copy of the receipt.

[59] Any responsibility for the period of hire would only fall on the defenders once a legible copy of the receipt was received by them. That must have been some time between 28 January 2009 when a letter was written stating that the attachment to an email could not be opened and 6 February 2009 when payment was authorised. Payment was received by AEL on 9 February 2009 (a Monday). Payment had been received by the pursuer by 14 February (a Saturday). It was unclear precisely when it was received. On the basis that it would have taken two days, as it had when the initial payment was sent, it seemed likely that payment was received on 11 February. Accordingly the maximum period for which the defenders could be responsible at this stage would be a further 14 days. Thereafter the hire continued for a further 11 days for which the defenders could not be responsible given that a seven day grace period had already been allowed following receipt of the original payment of £3,700.

[60] There were two reasons why the defenders bore no responsibility for any period which was attributable to delays on the part of AEL. The first was that AEL were the pursuer's agents. Clauses 3.6 and 5.1, as I have said, were in the following terms:

"3.6 You will authorise us to monitor the repair or replacement of your vehicle and will provide us with all information reasonably needed for this purpose...

5.1 You grant us the exclusive right to pursue the claim on your behalf."

AEL were engaged in attempting to recover money from the defenders and were doing so on behalf of the pursuer. They were plainly acting as agents. It did not matter that the words "agency" and "agent" were not used in the contract. In Clark, Lord Turnbull had treated AEL and the pursuer as the same thing.

[61] The meaning of agency was set out in paragraph 19.01 of Gloag and Henderson (12^th edition). That paragraph begins as follows:

"Meaning of agency - agency has been defined as "the fiduciary relationship which exists between two persons, one of whom expressly or impliedly consents that the other should act on his behalf so as to effect his relations with third parties, and the other of whom similarly consents so to act or so acts. The one on whose behalf the act or acts are to be done is called the principal. The one who is to act is called the agent""

This is a quote from Bowstead and Reynolds on Agency (18^th edition), paragraph 1.001(1). It was plain said Mr Balfour that the relationship between the pursuer and AEL fell within that definition.

[62] In these circumstances it did not matter whether responsibility for the delay lay with the pursuer or with AEL because it amounted to the same thing.

[63] The second reason why it did not assist the pursuer to point the finger of blame at AEL was that any delay caused by AEL broke the chain of causation between the fault of the defender's insured and the loss. The cause of the ongoing hire charges was the delay in providing the receipt. That had become the dominant and operative cause and on that basis as well any delay caused by AEL was not the responsibility of the defenders.

[64] Even on the esto basis that the defenders bore any responsibility for the period after the payment of £3,700 was received, that responsibility was for no more than a further 14 days.

[65] Mr Balfour then turned to the rate of hire. He submitted that the pursuer was only entitled to recover a rate which was equivalent to the spot hire rate unless he was impecunious, which it was conceded he was not.

[66] One had to assess the appropriate spot hire rate for the vehicle which was hired. On the whole Mr Smith had obtained figures which were lower than those suggested by Mr Perry and the methods employed by the two gentlemen were different.

[67] Mr Smith identified hire companies in the Glasgow area. He checked the availability of vehicles on the internet and then called the companies himself to obtain rates for the hire of an equivalent replacement vehicle. He also established that the vehicles would have been available on 10 November 2008. The firms he identified were well known hire companies. His approach replicated the sort of steps that someone such as the pursuer himself would have taken had he attempted to hire a vehicle at spot hire rates. Although there was some criticism that not all of the vehicles identified by Mr Smith were precise equivalents for the pursuer's vehicle it was apparent that they were broadly equivalent. His approach was entirely representative of the approach that someone such as the pursuer would have taken when hiring a replacement vehicle and taking reasonable steps to mitigate his loss.

[68] That could be contrasted with the approach taken by Mr Perry. He was employed by APU Limited, a wholly owned subsidiary of AEL, and was a former employee of that company. Having used the term "we" to refer to AEL, he could not be said to be independent. The database could not be said to be independent either. It was used predominantly by credit hire firms.

[69] The data upon which his opinion was based had been derived from a survey of the internet conducted by someone other than himself and the precise provenance of the data was not entirely clear. The internet quotes from which the data in the report were apparently derived were not included in the report so it was not possible to verify their accuracy. Although it would have been impossible to produce 55,000 quotations it would have been possible to produce the 15 quotations upon which his report was based so that they could have been verified. APU did not contact the local hire companies by telephone as Mr Smith had done. There had been no attempt by APU to consider the validity of the data for a situation in November 2008. Their material commenced in April 2009.

[70] Furthermore while Mr Smith had identified that vehicles were available from Enterprise and Europcar, companies which were apparently surveyed by APU, APU's results did not include any quotes from either of these companies. The third company, Thrifty, a relatively well known company who provided the cheapest quote Mr Smith obtained, was not even included in the companies identified by APU as serving the Glasgow area. Interestingly the companies who provided qualified results all tended to be firms which were not household names and many had no actual presence in Scotland. Therefore although APU surveyed a greater number of firms they were not representative of the sorts of firms from which an individual in Glasgow such as the pursuer would have hired a car. They did not provide a reasonable impression of the likely approach that someone such as the pursuer would have taken had he made arrangements for the hire himself. While the AEL rate was not the highest it was the second highest and way above the average.

[71] In the circumstances I ought to prefer the approach of Mr Smith. He identified an average spot hire rate inclusive of VAT of £128.83. There was some criticism of the fact that it was based on a weekly hire rate divided by seven rather than a daily hire rate. Given that the hire in the case was on any view to be for a period of over seven days the use of the weekly rate was entirely appropriate. It would be illogical to use a spot hire rate based on the assumption that the pursuer would have hired for a day at a time. There had been some criticism regarding supposed inconsistencies in the rates but they had no validity. In relation to Thrifty the net weekly rate per day was given as £83.74. With VAT at 15% this became £96.30 and multiplied by seven to give the weekly rate this came to £674.10. As far as Enterprise were concerned the net weekly rate per day was given as £104.34. With VAT at 15% this became £119.99 and multiplied by seven to give the weekly rate it came to £839.93. In relation to Europcar the net weekly rate per day was £147.92. With VAT at 15% this became £170.10 and multiplied by seven it came to £1,190.70. The figures all matched.

[72] The GTA guidelines were not spot hire rates but were agreed maximum settlement rates and provided no indication of the sorts of rates at which the pursuer would have been able to obtain spot hire if he had sought it in the market. In any event they were maximum figures with no indication of an appropriate range.

[73] Putting the various possibilities together Mr Balfour suggested that the pursuer's loss should be assessed as follows, assuming the appropriate daily spot hire rate would £128.83. For a period of 12 days it would be £1,545.96, for a period of 19 days it would be £2,447.77 and for a period of 33 days it would be £4,251.39.

[74] Whichever figure was reached was lower than the sum of £4,482.67 already paid by the defenders and accordingly they should be assoilzied.

[75] Mr Balfour also moved for the expenses of process.

Discussion

[76] I will turn to the last point first. There appears to me to be a discrepancy between what is said on Record about payments and what the evidence was. It is admitted on Record that on about 24 November 2008 the defenders paid £3,330 in relation to the total loss of the vehicle and that thereafter they paid £1,000. The case proceeded however on the basis, as I understood it, that the initial payment was for £3,700. As it happens that may not matter particularly.

[77] However at the end of answer 4 the defenders aver that they paid to the pursuer an interim payment of £4,482.67. There is no admission on Record about that payment. However Ms Casey said that it was not disputed. I can only assume that this payment was made over and above the payments made in respect of the value of the vehicle. Otherwise the submissions made by Mr Balfour that the total hire charges for which I could find the defenders responsible were less than that paid already would make no sense. I would have expected Ms Casey to point that out to me if it were not the case. This action is about reparation for losses over and above the vehicle itself. The fact that the pursuer was able to have the vehicle repaired later at his own expense seems to me to be neither here nor there in this context. It is a point to which I will revert later, however.

[78] It is plain that the pursuer's vehicle was damaged in an accident on 10 November 2008 through no fault of his own. I accept that on the evidence he entered a credit hire agreement for the hire of a Jaguar XJ 2.7 TDVi sport premium vehicle. The pursuer's vehicle was a Jaguar Sovereign first registered on 25 June 1999 and at the time of the accident it had a mileage of 84,156 miles. It had however a reconditioned engine. Nonetheless its value was under £5,000 although I accepted the evidence that it was the sort of vehicle whose value could increase with age. The vehicle hired was almost new and had a value in excess of £40,000. There was some skirmishing around the point whether the vehicles were broadly speaking equivalents. At the end of the day however I am satisfied that they were. Indeed I am also satisfied that the same can be said about the various vehicles referred to in the quotes obtained by APU Limited and Mr Smith. The pursuer entered the agreement without reading its terms. I accept that he thought that it was a receipt for the vehicle and an acknowledgement that it was free from damage. The pursuer's vehicle was inspected on 12 November and the repairs estimated at £3,810.77. The pre-accident value at that stage was assessed at £3,700. AEL were informed on Thursday 13 November 2008 that the vehicle was a total loss but they did not tell the defenders this until Wednesday 19 November. On 20 November 2008 Strange Jeens & Mathison, independent engineers, advised that they had revised their valuation to £4,700 on the basis of a new engine having been fitted and stated that the valuation was only agreeable if a valid receipt was made available for the new or reconditioned engine. Round about that time the pursuer was asked to provide a receipt.

[79] On 25 November 2008 a payment of £3,700 was received by AEL and was received by the pursuer two days later. The payment was unacceptable to him but he was told that it was an interim payment. He continued to hire the vehicle at a rate of £350.24 per day. At that stage he did not realise that he was hiring it and thought it was being provided as a courtesy by his insurance company.

[80] Thereafter there was a considerable delay in providing the receipt for the new engine. I am satisfied that the pursuer and his partner faxed or sent copies of the receipt on a number of occasions to AEL but for some reason the latter either did not receive the documents or misfiled them or they were illegible. On 13 January 2009 the pursuer was told by a message and also by a letter that AEL would need to terminate the hire as he had not provided the receipt. The following day the pursuer was spoken to in a telephone call and was told that if the invoice was not received by 15:00 hours on 15 January 2009 AEL would take the vehicle back. A number of conversations took place that day between the pursuer and representatives of AEL as well as between Mr Lorimer, who provided the engine, and AEL. The upshot of these was that Mr Lorimer was asked to fax a copy of the invoice to AEL. He had done so several times previously. He did indeed fax another copy but while it was better it was still slightly illegible and AEL requested a hard copy by special delivery. On 14 January a representative of AEL called the defenders and was advised to email a copy of the receipt. On 21 January the pursuer advised AEL that he had not yet received any additional payment and on the following day the defenders were asked by AEL when they were going to do so. At that stage they were told by a representative of the defenders that they had written to them and told them that they could not open the attachment with the purchase invoice. That representative requested that AEL post a copy to the defender's office in Milton Keynes. On 29 January a representative of AEL called the defenders. It transpired that a letter was issued by the defenders on 28 January advising that the purchase invoice attachment could not be opened and also requesting information on what purpose it would serve. A letter was received by AEL on 3 February 2009 and AEL called the pursuer, who told them that the original engine had a fault. Payment was issued by the defenders on 6 February 2009 and received on 9 February 2009. On 9 February 2009 the cheque was passed to the handler at AEL to confirm that it was in order to send it to the pursuer and it is likely that he received the payment on 11 February 2009. On 14 February 2009 AEL confirmed with the pursuer that they had received the payment of £1,000 and the credit hire on the replacement vehicle was terminated on 20 February 2009.

[81] It is not entirely clear when AEL received a hard copy of the receipt or invoice for the reconditioned engine. It must have been some time on or after 14 January 2009. Neither is it clear when the defenders received a copy of it. Mr Balfour's submission was that it must have been between 28 January 2009 when the letter was written stating that the attachment to the email could not be opened and 6 February 2009 when payment was authorised. It seems to me likely that it was received between 29 January and 3 February 2009. That was the date when AEL received a letter from the defenders which caused them to ask the pursuer why the engine was replaced. I cannot think of any reason why the defenders would ask for this information unless they had already received the invoice. Indeed I cannot think of any reason why they needed the information at all and the question was just productive of delay. 29 January 2009 was a Thursday. 3 February 2009 was a Tuesday. I think it unlikely that the letter would have been written on the Monday if it arrived on the Tuesday. Accordingly I take the view that it is likely that the defenders had a hard copy of the invoice by 30 January at the latest. While they may have had it before that date there is nothing in the evidence which entitles me to reach that view without any confidence and that is the date upon which I intend to proceed.

[82] I will deal with the implications of this timetable in due course.

[83] I am quite satisfied that the pursuer needed a vehicle for his business. I am also satisfied that it was perfectly reasonable for him to use the services of AEL for that purpose even though he did not appreciate what he was doing. It is suggested by Mr Balfour that he failed to mitigate his losses because he acknowledged that he would not have entered into the agreement had he known what it was and how expensive it was. It seems to me to be the expense of the rental which is the crucial factor. As I understood the pursuer's evidence it was because the rates were so high that he took the view that the agreement was something of a joke. He was never asked, as I recall it, what he would have done had he been given the opportunity to enter an agreement at a lower rate. Looking at the matter objectively it seems to me that it was reasonable to enter a credit hire agreement, as has been recognised in other cases. The issue of the reasonableness of his loss is something which can be addressed by the principle that he can only recover the spot hire rates, if anything.

[84] Something was made of the fact that AEL have not yet sought to recover the rental charges from the pursuer. The suggestion was that they were not going to. The only evidence I have about that is from Mr Kyle, who indicated that they would. There is no suggestion on either side that the pursuer was not bound by the contract. It is enforceable and, in light of the evidence from Mr Kyle, which was not challenged by other evidence, I proceed on the basis that it will be enforced in due course. It may be that the reference to the pursuer's dyslexia was in connection with the suggestion that he was acting reasonably but it seems to me that it is irrelevant. It will not avail the pursuer if he enters a contract without reading it and no one suggested that he was not bound by it.

[85] As I have indicated, I am satisfied that the vehicle which was supplied was more or less equivalent to the pursuer's own vehicle. In any event little was made of such differences as there are between the two vehicles. Having reached that conclusion I turn now to address the two issues which arise from it. The first is as to the period of hire in respect of which the pursuer is entitled to recover. The second is as to the daily rate.

[86] I have already set out the timetable which I find established. There was in fact no real dispute as to the salient points of it. The starting point is of course 10 November 2008. The pursuer was, at the very least, entitled to hire a replacement vehicle until Thursday 13 November 2008 (day four) when AEL were informed that his own vehicle was a total loss. The only explanation why it took a further six days to inform the defenders of this fact was that a weekend intervened. Nonetheless I would have thought it incumbent on AEL to inform the defenders as soon as possible. In the circumstances I hold that the relevant hire period between 13 November and 19 November should be a further four days making a total of eight days so far.

[87] I should say at this point that I respectfully agree with Lord Turnbull that it was reasonable for the pursuer to wait until at least the cheques had cleared before returning the hired vehicle. While it was suggested that on receipt of a payment of £3,700 he could have had the vehicle repaired, that is with the benefit of hindsight.

[88] By 20 November it is plain that the independent engineers knew that a reconditioned engine had been fitted. That information must have been available to the pursuer before that date. Indeed he must have known about it when the engine was fitted. It was suggested that he should have told the defenders, or at least AEL, about the new engine at an earlier stage. This suggestion was not put to the pursuer in terms as I recall it and I do not know what his response would have been. For all I know for example he may have taken the view that an engineer inspecting the vehicle would have been able to see that the engine was new or reconditioned and would have assessed the value of the vehicle accordingly. Whatever be the true position it is not a matter which I am going to take into account.

[89] However, it is plain that from 20 November onwards the pursuer and AEL knew that a valid receipt for the reconditioned engine was required in support of the new valuation. I can see no reason why a legible copy of that could not have been supplied and considered by the defenders within seven days, that is the period of eight days from 19 November. The period thus far comes to 16 days.

[90] It will be apparent from what I have said about the failure by AEL to inform the defenders about the total loss that I am equiparating them with the pursuer. That is because I am persuaded by the submissions of Mr Balfour that for the purposes at least of negotiating this claim AEL were his agents. That seems to me to be the only meaning which can be read into clause 5.1 of the agreement. There is no need, in my opinion, to use such words as "agent" or "agency" when the plain import of the clause can be seen from a reading of its terms. I accept that the pursuer did not know that he was entering into a relationship of agency but having signed the contract he must have been taken to know and, as I have said, no one has suggested that he was not bound by the terms of the contract.

[91] As Mr Balfour submitted, the relationship of principal and agent between the pursuer and AEL has implications for what happened next. I am quite satisfied that the pursuer, his partner and indeed Mr Lorimer provided copies of the invoice to AEL but for some reason these were not received or were illegible. A legible copy was only received by the defenders, in my opinion, on 30 January 2009.

[92] After 27 November 2009 I hold that it would have been reasonable for the pursuer to keep the replacement vehicle for a further seven days in order for the cheque which should have been issued by then to have cleared and for him to make arrangements to return the hired vehicle. That makes a total of 23 days and takes us up to 4 December 2009.

[93] Subject to what I am going to say shortly I hold that the period between 4 December 2008 and 30 January 2009 was largely the responsibility of either the pursuer or AEL, his agents. It was not the responsibility of the defenders.

[94] The qualification I have in mind relates to the period between 22 January and 29 January 2009. On 22 January the defenders' representative indicated that they had written to AEL to the effect that they could not open the attachment with the purchase invoice. One week later the defenders' representative indicated that a letter was issued on 28 January to that effect. The period between 22 January and 29 January seems to me to be the responsibility of the defenders and I accordingly add a further seven days to the hire period. That brings it up to 30 days. I hold that the period from 30 January 2009 until payment was received by the pursuer, which I hold to be 11 February 2009, was a period during which he was still entitled to the use of the replacement vehicle. That is a further period of 13 days.

[95] Thereafter I do not intend to allow any further periods of grace since I have already given the pursuer credit for that in the notional period between 27 November and 4 December 2009. I find therefore that the total period during which it was reasonable for the pursuer to hire the replacement vehicle was 43 days.

[96] The next question is as to the appropriate rate. Parties were agreed that it was the spot rate. One would have thought that it might be relatively simple to work out what the spot rate was but, as the evidence demonstrated, that was not the case. The methods employed by Mr Perry and Mr Smith differed greatly. Each had its merits and demerits. On the one hand Mr Perry surveyed a larger number of companies than Mr Smith. On the other hand he had no responsibility for checking that the material was accurate and his survey did not actually cover November 2008.

[97] Mr Smith only surveyed three companies and was reliant on information from persons who were not witnesses that the vehicles in question would have been available on 10 November 2008.

[98] I have already set out Counsels' criticisms of the methods employed by these gentlemen and there is no need for me to repeat them in full.

[99] I should say at the outset that I found both gentlemen to be perfectly credible, as I did with all of the witnesses in the case. I did not detect any hint of bias in either of them. While Mr Perry undoubtedly referred to AEL as "we" that was perhaps natural since he was an employee of theirs for some time. If one were minded to do so one could check the information which is on the database and I did not perceive him as the sort of individual who would simply tailor his evidence. Similarly I found Mr Smith to be a perfectly upstanding and credible gentlemen.

[100] The fact that APU Limited used a computer did not seem to me to be a feature which would lead me to prefer the validity of their information to that of Mr Smith's. He at least had spoken to the hire companies himself and was able to speak to the results of his own inquiries.

[101] It is somewhat strange that the quotes which Mr Smith found do not appear on Mr Perry's list. That leads me to the conclusion that neither survey was as comprehensive as it could have been. The other difficulty I have is that Mr Smith's figures are based on a notional daily rate produced by dividing the weekly rates by seven. No weekly rates appear in the survey conducted by APU Limited and spoken to by Mr Perry.

[102] There is no particular reason for preferring the evidence of one gentleman as opposed to the other. I regard them as effectively complementary. In the circumstances I propose to do as Lord Turnbull seems to have done and try to work out an average figure for the daily rate. It seems to me that that is the only fair way of approaching this. A reasonable hirer would look at a number of factors including the availability of a collision damage waiver, whether or not a deposit was required and so on. I think that a balanced average approach is the fairest way of dealing with the variables. However I propose to leave out of account Accident Exchange's own rate, which is ex hypothesi not a spot rate. I proceed on the view that the rates identified by APU Limited are inclusive of VAT and I propose to add VAT to the notional daily rate for the quotations produced by Mr Smith. For the avoidance of doubt I am using the figures at page 8 of 11 in the document attached to Mr Perry's statement, 6/4 of process, and the figures brought out by Mr Balfour in his submissions regarding Mr Smith's evidence.

[103] This gives me a total of £3,134.57 to be divided by 18, resulting in an average daily rate of £174.14.

[104] Multiplying this by 43 gives a total figure of £7,488.02.

[105] I am satisfied that the interim payment of £4,483.67, on the assumption that it was over and above the payment in respect of the vehicle, was paid to AEL as agents for the pursuer. In the circumstances that payment falls to be deducted leaving a total of £3,005.35.

[106] I was not addressed on the question of interest. Weighing up matters as best I can it seems to me appropriate to allow interest at the judicial rate, not from the date of the accident but from the date when the final cheque for £1,000 was received by the pursuer on 11 February 2009.

[107] I have not dealt specifically with a number of the objections which arose during the proof. They were not referred to in the submissions of counsel and were in effect superseded.

Decision

[108] I shall repel the first, second and third pleas-in-law for the defenders, uphold the first plea-in-law for the pursuer and in part uphold the second plea-in-law for the pursuer and the fourth plea-in-law for the defenders. I shall grant decree for payment by the defenders to the pursuer of the sum of £3,005.35 with interest thereon at the rate of 8% per annum from 11 February 2009 until payment.

[109] In addition I shall find the defenders liable to the pursuer in the expenses of the cause except in so far as they may otherwise have been dealt with.