Insurers must cease the practice of cold calling the victims of accidents caused by one of their insured drivers. This is the view of Longmore LJ in the recent credit hire ruling in Copley v Lawn and Maden v Haller which were heard together in the Court of Appeal.

In both cases the claimants’ cars had been negligently damaged by drivers insured by KGM. Both drivers obtained replacement hire vehicles from Helphire. KGM contacted both drivers offering to provide a “free” replacement car pending repairs to their vehicles. Neither offer was accepted. The trial involved two questions. Had the claimants failed to mitigate their losses by hiring cars from Helphire despite the offer from KGM? If so should their claim for car hire be completely extinguished or reduced to the cost that KGM would have incurred in providing the replacement car?

I enjoyed reading the “unpicking” of the defendant’s argument that they were offering a “free” car to the claimant at paragraph 11, bordering on sophism.

The conclusion was that the claimants’ rejection of the offer was not unreasonable because the defendant had not provided information about the cost to the defendant of providing the hire car. Therefore the claimant ws unable to make the necessary comparison.

21…The present dispute is an ordinary commercial dispute and the court cannot close its eyes to the obvious fact that hiring cars is a profitable business from the point of view of the supplier and a cost–incurring exercise from the point of view of the hirer. A claimant who has been deprived of the use of his car by the negligence of a tortfeasor only has to take reasonable steps to mitigate his claim for that loss of use and he cannot, in my judgment, be said to act unreasonably if he makes (or continues) his own arrangements with his own hire company, unless he is made aware that this commercial enterprise can be undertaken more cheaply by the defendant than by his own arrangements.

22. It follows from this that, if a defendant or his insurers does make an offer of a replacement car to an innocent claimant and he makes clear that he is going to pay less for such a car than the claimant is intending to pay (or is paying) for a car from a company such as Helphire, then (other things being equal) it may well be the case that a claimant should accept that lower cost replacement.

So the obvious consequence of this is that such offer letters (assuming the phone calls are abandoned) will now spell out the cost and claimants will ignore this information at their own peril.

Given the finding that the refusal was not unreasonable the court’s answer to the second question was necessarily obiter. The guidance is that any such failure to mitigate will result in the claimant still being able to recover for the hire car loss but it will be limited to the amount the defendant would have incurred.

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