23 February, 2010
The Claimant sought damages for credit hire charges incurred as a result of a road traffic accident on 6th April 2008 when the Claimant's Land Rover Sport was damaged in the Defendant's car wash. The Defendant admitted liability for the incident. Forbes acted on behalf of the Defendant.
The Claimant incurred £11.433.93 for hire of another Land Rover Sport from Accident Exchange while his vehicle was off the road being repaired. Prior to proceedings, the Defendant tendered £7,521.41 for hire and repairs to Accident Exchage. It was stated 'this payment is made in full and final settlement on a without prejudice basis. Also this offer is made on a part 36 basis and you have 21 days to accept.'
Accident Exchange banked the cheque and proceeded to sue for the balance of hire charges of £7352.12. The case was defended on the basis of the pre action compromise, that spot hire rates should apply and that the period of hire was excessive.
As a preliminary point the judge accepted the Defendant's submission that the claim had been compromised as a matter of contract law. Accordingly the claim was dismissed and the Defendant awarded the full costs of the proceedings.
It is common practice for Defendants to tender cheques in respect of hire charge claims and for hire companies to treat them as interim payments only. However, except where payment is made expressly on terms that it can be retained as an interim payment, banking the cheque may amount to acceptance by conduct.