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Adam Taylor achieves non-party costs order against credit hire company

In the case of Agboola v Kerley v Kindertons Accident Management (Watford county court, 30.07.18), Mr Kerley had been the successful defendant to a personal injury and credit hire claim arising out of an RTA. Following the dismissal of the claim at trial, Mr Kerley applied for a non-party costs order against Kindertons Accident Management, who were Mr Agboola’s credit hire company. The judge at Watford granted the application and ordered costs of the RTA claim against Kindertons pursuant to CPR rule 46.2. The judge held that Kindertons were the controlling and benefitting party of the litigation, for the following primary reasons:

  1. A letter of claim was sent by Kindertons to Mr Kerley’s RTA insurer, which only sought credit hire and related vehicle costs, but did not seek damages for any personal injury or loss of earnings (as were eventually included in the Schedule of Loss in the claim).
  2. A Part 36 offer was made in the RTA claim which only sought credit hire and related vehicle costs, but did not seek damages for any personal injury or loss of earnings (as were eventually included in the Schedule of Loss in the claim).
  3. The terms and conditions of the hire contract suggested that Kindertons were the controlling party in relation to the RTA claim, as those terms stated that Mr Agboola had to cooperate with the claim.

The judge then ordered that the costs were enforceable against Kindertons, despite QOCS being the default position in relation to the RTA claim, and also ordered that Kindertons pay the costs of Mr Kerley’s application.

The decision shows that where the evidence is suggestive of a credit hire company controlling the litigation, but the claim is a poor one and fails, recourse for costs may be sought against the credit hire company. In addition, the threat of such an order may well provide a disincentive to the continuation of poor claims by credit hire companies. Helpfully for insurers faced with such claims, the terms and conditions of the hire agreement relied upon by the judge appear to be standard ‘cooperation’ terms that appear in many hire agreements.

Adam Taylor acted for the successful applicant Mr Kerley (and his insurers), instructed by Clyde & Co LLP.



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