Giles v Thompson [1993] UKHL 2

House of Lords
Between
GilesAppellantThompsonRespondent
Before
Lord Keith of KinkelDate 26 May 1993
[1]Devlin v. Baslington. The defendant drove into the back of the motorist's car in circumstances which left no doubt as to liability. The motorist sustained typical whiplash injuries, and her car was damaged. For three weeks whilst the car was under repair a replacement vehicle was made available by 1st Automotive Car Rental ("1st AutoMotive"). This company conducted its scheme under standard terms which the motorist signed. The material provisions were as follows "1. . . .[2]Lessor agrees to rent and the Hirer agrees to take the vehicle described overleaf on the conditions as set out in this agreement.[3]...[4]. . . -6-[5]Where the hire is consequent upon the Hirer's own vehicle being unroadworthy as a result of a road traffic accident:(i) The Lessor will allow the Hirer credit on the hire charges until such time as a claim for damages has been concluded against the party (hereinafter called the third party) that the Hirer alleges is liable for damages, arising out of the said accident, subject only to condition (6) hereunder.(ii) The Lessor shall have the right to pursue an action in the Hirer's name against the third party.(iii) The Lessor shall have the right to pursue such action through the County Court and/or High Court and the Hirer must co-operate in the conduct of the action and, if required by the Lessor, attend any hearing that the Court appoints.(iv) PROVIDED THAT notwithstanding the credit facility referred to above the hirer will discharge any indebtedness as soon as reasonably practicable, and shall take such action as is necessary to obtain interlocutory judgement or payment of damages for the purpose of discharging the said indebtedness.[6]If, and only if, the Hirer is in default of condition (5iii) then the credit allowed by the Lessor to the Hirer shall be terminated and the hire charges will be due from the Hirer to the Lessor 28 days from the Lessor giving notice thereof to the Hirer by reference to this Condition (6).[7]. . .[8]Except where condition (5) applies, the Hirer will pay to the Lessor on demand all charges due under this agreement, plus Value Added Tax at the rate appropriate at the time of the hire. . . . . . . . .[18]This agreement may be terminated by either party giving 24 hours notice of termination and the vehicle being returned to the Lessor." In addition there was a duplicated Form of Authority, in two parts. The first made provision for the company to appoint a solicitor to act on the - 7 - motorist's behalf in connection with the accident, and went on to state- "I understand I am at liberty to appoint any solicitor to act on my behalf. I have no particular solicitor I wish to instruct." This part of the form was crossed through. The second part read- "I hereby authorise you, the Third Party Insurers in this matter, to release to my Solicitors a separate cheque to be made payable to 1st AutoMotive Car Rental in respect of hire charges". This part of the form was signed by the motorist. In due course the motorist commenced proceedings in the County Court. The solicitor who acted on her behalf was the one whom she had originally consulted, and who had suggested that she approach 1st AutoMotive. It was accepted in argument, although the point does not seem to have emerged in the Court of Appeal, that (consistently with the deletion of the first part of the Form of Authority), the solicitor was not chosen by 1st AutoMotive. As the action progressed the defendant admitted liability, and the matter went to trial on quantum only. Two issues were raised. First as to the amount of general damages for personal injury. This aspect of the case proceeded in a perfectly conventional way, with oral evidence from two consultants and submissions on the amount of the award, based on the amounts award in previous cases. The trial judge fixed the figure at £4,500. The second issue related to a charge of £652.05 in respect of the use of the car, a charge which the motorist had not yet paid when judgment was given in her favour. In addition to the challenge to this item of claim on the ground that the agreement was champertous, the defendant also sought to challenge the amount by showing that the motorist had no need for a replacement vehicle, at least for part of the time in question. The judge rejected this contention, and awarded the full amount of the claim. Although the agreed facts do not say so, I assume that -(1) the defendants' insurers have paid the amount of the personal injuries award;(2) they have not paid the amount of the claim for the car hire;(3) the company has not sought to recover the amount of the hire (pending this appeal) notwithstanding that the award in respect of personal injuries has put the motorist in funds. It was stated in argument that although the motorist instructed her own solicitor the cost was borne in the first place by the company. 2 Giles v. Thompson. The accident took place on 22 August 1991. The motorist sustained a whiplash injury. Her vehicle was damaged and needed repairs. After a -8- week a replacement was provided by Forward Hire Limited ("Forward Hire") under a written contract, which read in part as follows- "1. Where the hire is consequent upon the hirer's own vehicle being unroadworthy as a result of a road traffic accident the company will allow the hirer credit on the hire charges until such time as damages, and statutory interest, have been recovered from the party (hereinafter called the third party) that the hirer alleges is liable for damages, arising out of the said accident, subject only to condition(4) hereunder. The company shall have the right to appoint its own solicitor to pursue an action in the hirer's name against the third party. The company's solicitor shall have the right to pursue such action through the County Court and the hirer must co- operate in the conduct of the action and, if required by the Company's Solicitor, attend any hearing that the Court appoints. If, and only if, the hirer is in default of condition (3) then the credit allowed by the Company to the hirer shall be terminated and the hire charges will be due from the hirer to the Company 28 days from the Company giving notice thereof to the hirer by reference to this condition (4)." The motorist also signed a document addressed to Forward Hire in the following terms- "I confirm that you may appoint a Solicitor/Legal Agent on my behalf to act in the recovery of the uninsured losses from the Third Party Insurers. They will also act on my behalf for the recovery of damages for any personal injury or other losses involved. They have my authority to commence proceedings, if necessary, for recovery of the Car Hire charges and other losses and to apply for any medical evidence they may deem it necessary to obtain on my behalf for the purpose of a personal injury claim. I confirm that I have not instructed any other solicitors to act on my behalf, nor do I have a solicitor whom I would wish to instruct in this matter." -9- Five months later proceedings were commenced by the motorist in the County Court, through the medium of solicitors instructed by Forward Hire. The damages claimed were for personal injury, loss of earnings, and the excess of her own insurance cover on the damaged vehicle. None of this was in dispute, and general damages were agreed at £2,500. The defendant did, however, challenge an additional claim for £540.31 in respect of hire charges. It was not alleged that the charge was unreasonable, but the claim was denied in principle on the grounds, first, that the hiring agreement was champertous, and, second, that the motorist had suffered no loss from the immobilisation of her car, since she had the use of the substitute vehicle provided by Forward Hire. After argument, the County Court judge awarded the sum claimed, together with interest. These two decisions, together with another which raised similar questions, were taken to the Court of Appeal, where all three appeals were unanimously dismissed. The defendants in the two above-named cases (but not the third) now appeal to this House. II THE ISSUES On these facts and documents the following issues arise:a. A. As regards both appeals- Are the agreements, or either of them, champertous and hence unlawful? It is unnecessary to consider the question whether the relationship between the companies and the actions is such as to amount to unlawful maintenance, since the defendants concede that in the absence of a champertous element maintenance would not be sufficient to provide the defendant with a defence to an action by the motorist, whatever might be the problem as regards a claim brought by the motorist against the company, or vice versa. If so, does the unlawfulness furnish an answer to that part of the claim which relates to the hiring charges? In any event, have the motorists suffered a recoverable loss, given that they have not yet paid the hiring charges?b. B. As regards the Devlin appeal- - 10 - Has the motorist proved a sufficient need for a replacement car to justify an award of the cost of the replacement? Is the motorist entitled to recover interest on the sum awarded in respect of hire charges? III ARE THE CONTRACTS UNLAWFUL?[1]Devlin v. Baslington Although the arguments before the Court of Appeal, and initially before the House, proceeded on the footing that the two appeals were the same, it is I believe clear that there are significant differences between them, and that they call for separate consideration. I will begin with Devlin v. Baslington. An essential preliminary is to answer certain questions concerning the rights and liabilities created by the hiring agreement. Since, however, I believe that the resolution of this particular appeal admits of no doubt I will deal with these questions quite briefly. The first is this: What rights does the company possess in the sums recovered by the motorist from the defendant? The answer is plainly : None. Neither the contract nor the Form of Authority purported to create a charge over the proceeds of the claim, either as regards the hiring charges, or the damages for personal injuries, or any other item. Clause 5(iv) merely required the motorist to press ahead with the recovery of sufficient funds to discharge her indebtedness to the companies. Equally, there was no assignment of the proceeds of the action or of the cause of action itself. As for the second part of the Form of Authority, even if this was irrevocable (which I doubt) it was no more than a mechanism designed to ensure that, once the motorist was put in funds by the successful actions, the appropriate part of them reached the company. The next question is whether the motorist incurs a personal liability to the company for the hiring charges. The defendant contends for a negative answer, maintaining that what is dressed up as a hiring on credit is not a hiring at all, but is a free loan of the substitute car, for the cost of which the company looks to recovery solely against the fruits of the action. I can see that this might be the position under some forms of contract; and indeed this is how the scheme appears to be described in the company's brochure. But we must look to the terms of the contract alone. Although these are defective, they are sufficient to answer the question. The motorist does retain a "residual liability" (as it was called in argument) for the hire charges, and this will become enforceable, not only in the special circumstances contemplated by Condition 6, but also under Condition 5(i) when "a claim for damages has been concluded. "(Emphasis added). Naturally, the draftsman had in mind an occasion when the claim would be concluded by the recovery in full of the hiring charges, since this is the hypothesis on which the entire scheme is - 11 - founded; but there are numerous other ways in which the motorist's claim, in its various elements, may be concluded, and in all of these Condition 5(i) will terminate the period of credit and give the company the right to look to the motorist for any unpaid balance of the charges. At this stage I must mention one further question, namely whether the contract gave the company the right to exercise control over the conduct of the claim against the defendant. This will require closer scrutiny in relation to the second appeal, but for immediate purposes need not be pursued, since the deletion of the first part of the printed form coupled with the appointment by the motorist of her own solicitor made it clear that she was in charge of her own claim. My Lords, on these simple facts it appears to me to make no difference how precisely one expresses what is left of the law of champerty, for the answer must inevitably be the same. It is sufficient to adopt the description of the policy underlying the former criminal and civil sanctions, expressed by Fletcher Moulton L.J. in British Cash and Parcel Conveyors v. Lamson Store Service Company [1908] 1 KB 1006 , at page 1014 :
"It is directed against wanton and officious intermeddling with the disputes of others in which the [maintainer] has no interest whatever, and where the assistance he renders to one or the other party is without justification or excuse."
This was a description of maintenance. For champerty there must be added the notion of a division of the spoils. In my opinion it is perfectly clear that this description does not fit the facts which I have summarised. One may take it by stages, imagining first the case where the motorist simply hires a replacement car on credit. Obviously there is nothing objectionable in this. Change the facts a little, so that the motorist explains to a garage-owner that she needs a replacement, but cannot pay until her claim against the colliding car has been recovered. The garage- owner, needing the business and confident of his customer's honesty, grants her credit. It is equally obvious that the transaction is harmless. Now take the case where the garage-owner sensibly requires an undertaking that if the claim succeeds the motorist will procure a cheque directly in his favour. Again, no harm. Finally add the ingredient that the garage-owner agrees to finance the action, which he believes certain to succeed, leaving the motorist to employ her own lawyers at his expense. This may not often happen, but if it does happen (as here) I am quite unable to see how it could be said that the car-rental agreement is champertous. There is no "wanton and officious intermeddling" in the dispute between the motorist and the defendant. The company does not meddle at all, but allows the motorist to get on with the claim, and merely awaits a favourable result. True, the company makes a profit, but this comes from the hiring, not from the litigation. For my part, I think it quite plain, without the need to go into any details of the law, that - 12 - this transaction is neither champertous nor invasive of any requirement of public policy.[2]Giles v. Thompson. As in the case of Devlin an essential preliminary is to ascertain the rights and obligations created by the hiring agreement. First, one must see whether the companies obtain any direct rights over the fruits of the claim for the element of damages representing the hire charges. Here, the answer is just as clear as it was before. The companies have no interest, whether by charge or assignment, which give them any claim to the proceeds which they can enforce against the defendant. Nor is any part of the recovery shared with the motorist, in the sense (for example) that they have a preferential claim to it against the other creditors of the motorist. The position is simply that the success of this part of the claim will equip the motorist with extra money, from which the hire charges can be satisfied. Next, it must be asked whether the hiring agreement creates a residual liability for the hiring charges. The point is the same as before, although the wording of the agreement is different. Now, by virtue of Condition 1, the credit is to continue "until such time as damages, and statutory interest, have been recovered from the party . . . that the hirer alleges is liable for damages." As before, it is probable that the draftsman of the agreement has not envisaged that the proceedings would embrace claims other than those for hire, or that they might not succeed in full, or indeed at all. Nevertheless, one must go by the words of the agreement, and these make it clear, as in the Devlin case, that on the conclusion of the proceedings the motorist becomes liable to pay the charge, with the difference that in the Giles case liability does not arise until there is a recovery of damages, whether or not complete, and whether or not related to car hire. I turn now to a question on which great stress was laid by the defendants, namely the degree of control exercised by the companies over the conduct of the litigation. Here, the position is different from that which existed in the Devlin case, since the action was conducted by solicitors chosen by the companies. Although we have no details, it is reasonable to assume that the motorist did what the solicitors asked: and, of course, fared very well in consequence. Nevertheless it is necessary to consider briefly what would have happened if the interests of the parties had diverged. I say "briefly" because it is not the function of the House to investigate in depth all the situations, for which the agreement makes no express provision, which might arise in circumstances absent from the present appeals. This would be a complex and difficult enterprise, requiring in particular a consideration of the possible analogy with cases of partial subrogation under contracts of insurance, not opened up in argument; and it would in all probability be wasted effort, since if the companies are well advised they will quickly work out their schemes more fully and express them in a more adequate form of words. - 13 - This being so, I need deal only briefly with three situations. The first exists where the only claim in contention relates to the hiring charges. Here, the ultimate control rests with the motorist, in the sense that he or she is free, if disapproving of the way in which the claim is being handled, to give instructions to the solicitor which contradict those of the company; but the result under clause 4 of the Conditions is to make the hiring charge immediately payable. The second situation is one in which there is a dispute about the personal injury element of the claim. Here, there is nothing which gives the company any control, for clauses 2 and 3 are clearly addressed to the hiring charges alone. Even if appointed by the company, the solicitor will be obliged to act in accordance with the instructions of the motorist. Finally, there is the case of the mixed claim, where an unappropriated offer or payment into court is made in respect of both the personal injury and similar claims, and the claim for hiring costs. In theory this could present difficult questions of law, as to which party is dominus litis; and of legal ethics, concerning the duties of a solicitor faced with conflicting duties towards clients with differing interests. But only in theory, for the minimal likelihood that a solicitor handling two claims, in one of which (for a few hundred pounds) the company is interested and in the other of which (for some thousands of pounds) only the motorist is concerned, will so prefer the smaller to the larger as to put the motorist's interests at risk is a quite insufficient basis, to my mind, for a general judgment on the unlawfulness of the arrangement a" a whole. There remains one further aspect of the relationship, namely the responsibility for the cost of the litigation. Again the agreement is silent. In the simplest case, where only the hiring charge is the subject of claim, there is no problem. Since the action is brought at the company's request there is clearly an implied obligation not only to finance it, but also to cover the motorist's liability to the defendant in the event of failure. The position will be, at least in theory, less straightforward where there is a mixed claim, for personal injury as well as hiring charges, and where the action wholly or partially fails. It may be that in practice the company will bear all the costs involved, but the agreement does not say so, and in the event of dispute some difficult questions may arise. These may perhaps be solved by recourse to the analogy with subrogation, and if so the authorities collected in The Law of Insurance Contracts, Dr. M.A. Clarke, 31-6B3 may be germane. The point was not, however, explored in argument, and I do not think it profitable to do more than suggest that under this particular form of contract the motorist cannot be confident of a complete cover in respect of costs. Against this background I turn to the defendant's submission that the agreement is unlawful. This posits an enquiry in three stages. At the first the agreement is analysed to see whether the company, a stranger to the dispute between the motorist and the defendant, agrees to involve itself in the - 14- litigation in a way which yields a financial benefit from a successful outcome. If so, the agreement is champertous and prima facie unlawful. At the second stage it is considered whether the third party has an interest in the transaction which legitimates what would otherwise be unlawful. Finally, it is asked whether, aside from special rules concerning champerty, the relationship has features which make it contrary to public policy, and hence unenforceable. For my part I prefer to approach the question more directly. I accept that, as Steyn L.J. expressed it in the course of his valuable historical analysis, there have evolved crystallised policies in relation to solicitors' contingent fees and the assignment of bare rights of action for tortious wrongs. I also accept that in relation to these aspects of the law of champerty it is necessary first to consider whether the transaction bears the marks of unlawful champerty, and then enquire whether it is validated by the existence of a legitimate interest in the person supporting the action distinct from the benefit which he seeks to derive from it. For this purpose close regard must be paid to Trendtex Trading Corporation v. Credit Suisse [1982] A.C. 679, and to the considerations which led to a difference of analysis between the members of the Court of Appeal in the present case. But the tests there laid down were addressed to transactions of the kind then before the House; they are not to be understood as if they had statutory force; and I see no reason to impose the procedure thus evolved on situations which are entirely different. As Steyn L.J. has demonstrated, the law on maintenance and champerty has not stood still, but has accommodated itself to changing tunes: as indeed it must if it is to retain any useful purpose (see Danckwerts J., at p. 382 of his important judgment in Martell v. Consett Iron Co. [1955] Ch. 363). It is possible, although I believe rather unlikely, that new areas of law will crystallise, with their own fixed rules which are invariably to be applied to any case falling within them. Meanwhile, I believe that the law on maintenance and champerty can best be kept in forward motion by looking to its origins as a principle of public policy designed to protect the purity of justice and the interests of vulnerable litigants. For this purpose the issue should not be broken down into steps. Rather, all the aspects of the transaction should be taken together for the purpose of considering the single question whether, in the terms expressed by Fletcher Moulton L.J. in the passage already quoted from in the British Cash and Parcel Conveyors case, there is wanton and officious intermeddling with the disputes of others in where the meddler has no interest whatever, and where the assistance he render to one or the other party is without justification or excuse. My Lords, for my part I am unable, any more than in the case of Devlin v. Baslington, to accept that there was anything officious or wanton about the intervention of the hire company in the motorist's litigation. The question must be looked at first in terms of the harmfulness of this intervention, which in turn calls for separate consideration of the risks to the administration of justice and to the interests of the motorist. Is there any realistic possibility that the administration of justice may suffer, in the way in which it undoubtedly suffered centuries ago? None, so far as I can see, or at - 15 - any rate none with which the skills and coercive powers of the contemporary judge are unable to grapple. Only two areas of the litigation might be regarded as imperilled. First, the witnesses. It is said that those called for the motorist may be encouraged to try too hard. Frankly speaking, this idea seems to me fanciful. On the merits of the claim, in the minority of cases which are undisputed, the county court judge is uniquely well equipped to weigh the performance of the motorist and the defendant. And can it seriously be said that because the claim is backed by a garage the medical evidence will be seriously in danger of exaggeration? The other danger to the administration of justice, of which the defendants and their insurers urge the court to beware, is that the existence of the scheme will encourage motorists to hire cars which they do not really require, at inflated rates, which have to be paid for by the insurers. As to rates of hire, shrewd and experienced insurers will be well equipped with information about local tariffs for the hire of cars of the same type as the motorists' damaged vehicles, with which they can expose any exaggeration. And as to the possibility that the scheme will encourage motorists to hire cars which they do not need, at the ultimate expense of the insurers, I am confident that resourceful lawyers are well able to press by interlocutory measures for a candid exposure of the motorist's true requirements, and, if all else fails, to fight the issue at an oral hearing, as happened in the present case. If the motorists are found to have been tempted by the hire-companies into the unnecessary hiring of substitute vehicles, the claims will fail pro tanto, with consequent orders for costs which will impose a healthy discipline upon the companies. In these circumstances I find the perils to the proper administration of justice much exaggerated. A second argument is deployed, namely that the schemes put at risk, not the defendants and their insurers, but the motorists who hire the cars. Even if sound, this argument could not lead to the application of the law of champerty, and can be relied upon only in relation to broader considerations of public policy. The solicitude of the defendants and their insurers for the interests of their potential opponents may fairly merit a measured, if not sceptical, regard. Nevertheless, the point is there and must be faced. Do the standard terms of Forward Hire create such an imbalance of rights, such a risk of exploitation, that the courts ought to treat the hiring contract as outlawed, incapable of creating any rights as between the motorist and the company? That there is some possibility of muddle, that the motorist may fall out with the company and be left with a liability for the hiring charges, and perhaps for costs as well, may be plain from the sketch which I have given of this unsatisfactory form of agreement. But these are reflections of the fact that the agreement is, to my way of thinking, a real hiring and not a sham. Is it then so wholly outrageous that the law should turn its back on it? I cannot say so. On the contrary, the balance of advantage is overwhelmingly in favour of those who receive professional and financial assistance to recover - 16 - a valid claim which would otherwise go unsatisfied. Moreover, although as I shall briefly suggest at a later stage, the publicity material of the two companies leaves a good deal to be desired, any potential abuse which may exist is much better tackled through the consumer protection legislation than by employing the law of champerty to give a windfall, not to the exploited motorist, but to the defendant's insurers. Accordingly, if one looks at the agreement in terms of persons other than the company it appears unobjectionable. Returning to the company, is it wantonly or officiously interfering in the litigation; is it doing so in order to share in the profits? I think not. The company makes its profits from the hiring, not from the litigation. It does not divide the spoils, but relies upon the fruits of the litigation as a source from which the motorist can satisfy his or her liability for the provision of a genuine service, external to the litigation. I can see no convincing reason for saying that, as between the parties to the hiring agreement, the whole transaction is so unbalanced, or so fraught with risk, that it ought to be stamped out. The agreement is one which in my opinion the law should recognise and enforce. IV UNLAWFULNESS AS A DEFENCE In the light of the conclusions so far expressed it is unnecessary to explore the question whether, if the hiring agreements had been champertous or otherwise unlawful, the effect would have been to deprive the motorists of any recovery for loss of use, whether based on the agreement or on a reasonable rate of hire, and since this question, which is by no means easy, may be of some general importance, I prefer to reserve it for decision as and when it arises. V HAVE THE MOTORISTS SUFFERED LOSS? I now turn to the wholly distinct question whether the motorists have proved that they have suffered a recoverable loss through the unavailability of their own cars pending repairs. The defendants say that they have not, because the cars were replaced by substitute vehicles which the motorists were able to use free of charge. In essence, it is said that the motorists have mitigated what would otherwise have been a valid claim for general damages reflecting their loss of the opportunity to make use of their own vehicles. On the opinion which I have formed of the obligations created by the obscure and incomplete terms of the two agreements this contention admits of a very short answer. In my judgment the motorists do not obtain the replacing vehicle free of charge. If the motorist had simply persuaded a garage to hire her a substitute on credit, without any of the superstructure of the present transaction, it would be no answer to a claim for damages equivalent to the sums due to the garage that these sums would not in practice be paid until a judgment in the motorist's favour had provided the necessary funds: for the amount of the outstanding liability represents the loss suffered - 17 - by the motorist, and the question whether the motorist intends to apply the damages recovered in satisfaction of the debt, or in some wholly different way, cannot affect his right of recovery. To distinguish that case from the present the defendants are forced to contend that the consideration for the provision of the cars consisted solely of a right to recoup themselves from the damages for loss of use. As will have appeared, I do not accept this interpretation. The hiring company has no direct right to the damages. The company is not an assignee or chargee of the cause of action or its fruits, although it expects that the damages for loss of use will form part of the assets from which the motorist will in due course pay for the substitute. The liability for the car hire, although suspended as regards enforcement, rests upon the motorist throughout. It is a real liability, the incurring of which constitutes a real loss to the motorist. Whatever the publicity material may have conveyed, the provision of the substitute cars was not "free". In the light of this conclusion I find it unnecessary to discuss the question, by no means easy, what the position would have been if the use of the substitute car really had been free; as, for example, if it had been lent by a kindly friend. To do so would require a reconciliation of cases such as Harlow & Jones v. Panex (International) [1967] 2 Lloyd's Rep. 509, Donnelly v. Joyce [1974] QB 454 , McAll v. Brooks [1984] R.T.R. 99 and The Mathew [1990] 2 Lloyd's Rep. 323. This question, which is of much general importance, is in my view far better left for decision when it actually arises, rather than as a by-product of two schemes which have not, as I suggest, been fully worked-out. VI PROOF OF NEED In the Devlin appeal it has been questioned whether, even if all the issues of law are decided in favour of the motorists, there is sufficient proof that the motorist acted reasonably in hiring a replacement vehicle to justify an award in full of the company's hire charges - or, indeed, it would seem any award at all. The question is before the House because the County Court

judge held that:

"As a matter of principle ... if you deprive me of an article of use to me, you have no complaint whatever if I hire another to replace it ... If I have a car simply for my own pleasure, I regard it, in principle, [as] wrong that I should be required, before being able to hire a car and charge it to the wrongdoer, to prove that I need it as opposed to merely desire the use of it."
Whilst I have sympathy with this point of view I think it too broad. The need for a replacement car is not self-proving. The motorist may have been in hospital through the accident for longer than his vehicle was off the road; or he may have been planning to go abroad for a holiday leaving his car - 18 - behind; and so on. Thus, although I agree with the judgments in the Court of Appeal that it is not hard to infer that a motorist who incurs the considerable expense of running a private car does so because he has a need for it, and consequently has a need to replace it if, as the result of a wrongful act, it is put out of commission, there remains ample scope for the defendant in an individual case to displace the inference which might otherwise arise. Further than this I am not prepared to go. It is not the function of your Lordships' House to re-try an issue of fact on the judge's notes. It may be, although I do not say that it is, that the award in the Devlin case was too generous. Against the perspective of the amounts involved in the numerous cases now coming before the County Courts the sum is trifling. What matters is that the judges should look carefully at claims for hiring, both as to their duration and as to their rate. This will do much to avoid the inflated claims of which the defendants' insurers are understandably apprehensive, and will also discourage the promotion of over-optimistic claims by motorists, who if the present forms of agreement are enforced in accordance with their terms may be left with residual liabilities for hiring charges. The discipline imposed by judges who have the acumen and experience to detect greed and slapdash claims procedures will in my opinion do much more to forestall abuse than a dusting-down of the old law of champerty. VII INTEREST In Devlin v. Baslington the County Court judge awarded interest on the amount of damages referable to the hire charges. This decision was upheld on appeal. In this respect alone I must differ from the Court of Appeal. The argument for the motorist proceeds on the basis that the motorist's cause of action against the defendant, and the financial loss resulting from it, came into existence at the moment of the accident, and was later quantified as special damage when the hiring period came to an end. At this time, so the argument runs, the defendant should have recompensed the motorist for her loss. Thereafter, she was "kept out of her money", a detriment for which she should be recompensed by am award of interest. Although this argument seems logical at first sight, it ignores the fact that the power to award interest is discretionary, and that the exercise of this power should correspond with reality. In the present case, although the motorist incurred a genuine liability for the hire charges day by day, it was not a liability capable of immediate enforcement by the hire company. In both practical and equal terms the financial position of the motorist was wholly unaffected by the defendant's failure to make immediate payment, since the terms of the contract meant that until judgment was given she was not obliged to pay the hiring charges and also that as soon as the claim was "concluded" and the period of credit came to an end the damages provided the necessary funds. In reality she was not "kept out of" any money of her own whilst the claim was being assessed and litigated. - 19 - It is, however, contended that this is an over-simplification, because the motorist was from the outset under a duty to pay to the company interest on the amount of the hiring charges for which she was receiving credit. I find this argument quite unsustainable. There is no provision in the contractual terms requiring the motorist to pay interest on money which he or she does not presently owe and may never owe; and the idea that such a provision may be implied runs counter to the central feature of the scheme, as presented to the House, which is that if all goes well the motorist will have the use of the substitute car without reaching for his or her credit card. I should mention one further point for the sake of completeness. If the agreement had, expressly or by implication, given the company a direct right against the proceeds of the claim, the position of the hiring company might have begun to resemble that of a subrogated insurer. It would then be necessary to examine H. Cousins & Co. v. D. & C. Carriers [1971] 2 Q.B. 230 and Harbutt's "Plasticine" v. Wayne Tank & Pump Co. [1970] 1 Q.B. 447, the outcome of which is that if the relationship between the insured and his insurer creates an obligation on the insured to account to the insurer for any interest recovered as well as for the capital sum, the court has a discretion to award interest to the insured on any damages which he recovers against a third party, in order to avoid a windfall to the third party and hardship to the insurer. These cases, which were not explored in argument, bear a superficial resemblance to the present; but in my view only superficial, because a subrogated insurer does have an interest in the insured's cause of action and in its fruits of a kind which the hiring companies do not possess. Thus, although an award of interest is always discretionary, I am unable to detect any grounds on which, in the circumstances of the present case, the discretion could properly be exercised in favour of the motorist. To this extent, therefore, I would allow the appeal in Devlin v. Baslington. I must, however, emphasise the qualification "in the circumstances of the present case". If the effect of the hiring agreement, or the general shape of events, were on some other occasion to be different from those now before the House it is possible that the exercise of the discretion might be less straightforward. But this is a hypothetical question upon which the House cannot enter. VIII CONSUMER PROTECTION Finally, I must return briefly to the publicity material issued by the two companies. This is wholly irrelevant to the outcome of the appeals, since it did not form part of either contract, and there is no reason to believe that the benefits which the motorist actually received were any different from those which the brochures had promised. Nevertheless, there is in each case a conspicuous discrepancy between the brochure and the conditions of contract. This ought to be put right. For example, one of the brochures refers to "free" car hire, whereas it is plain that the hire is not free: as indeed the company asserted in order to make good its case on champerty. Similarly, in the case - 20 - of the other company, the motorist is told that "at no time are you out-of- pocket" , whereas the existence of a residual liability for hire shows that in law this may not be so, whatever may be the features of the scheme as actually practised. My Lords, it may well be that there is nothing sinister about these discrepancies, but that they are simply another consequence of a failure by the promoters to give sufficient thought to the details of their schemes. Nevertheless, unless the words of the contract, the words of the publicity material and the actual practices of the companies are brought into conformity there is scope for the customers to be misled. Whether in such circumstances the authorities responsible for the operation of the consumer protection laws will think it appropriate to intervene is not a matter upon which the House can express any opinion. Nevertheless, I believe that if there is any abuse this will be the proper means for putting it right, rather than an invocation of the law relating to champerty. IX CONCLUSION In the result I would dismiss both appeals, save only that in Devlin v. Baslington I would allow the appeal in respect of interest. - 21 -