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STEPHEN McFADDEN AGAINST ARMANDO MARGIOTTA AND UK INSURANCE LIMITED

SHERIFFDOM OF SOUTH STRATHCLYDE, DUMFRIES & GALLOWAY AT HAMILTON

[2016] SC HAM 44

Case No. PP 45/15

EXTEMPORE JUDGMENT

by

SHERIFF DANIEL KELLY QC

in the cause

STEPHEN McFADDEN

Pursuer

against

ARMANDO MARGIOTTA

Defender

and

UK INSURANCE LIMITED

Party Minuters

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Act: Mohammed, Adv, Kerr Brown, Glasgow; Alt: Lott, Motherwell (Defender); McGregor, Adv, BLM, Glasgow (Party Minuters).

 

Hamilton Sheriff Court                                                                    14 June 2016

Liability

  1. The pursuer claims in respect of loss occasioned by an accident which he maintains occurred on 18 March 2012 in which his car collided with that of the defender, who admits liability for it. Unusually, the defender’s insurers maintain that the damage sustained by both vehicles is incompatible with the description of the accident provided by those said to be present and that the damage caused to each car was not caused by any accident occurring on that date. They would, however, have to meet any award made against the defender in terms of section 151 of the Road Traffic Act 1988.

     

  2. Three individuals - the pursuer, his brother and the defender - gave evidence of their involvement in the collision between the defender’s BMW car and the pursuer’s Mercedes car. Their descriptions of the accident were detailed and similar in their terms. The accounts given by each was of a collision on the A726 Strathaven to East Kilbride road in which the pursuer was driving through a series of bends at about 30 mph when the defender’s car came round a bend at a higher speed and struck the rear of the pursuer’s car. The pursuer said that he brought his car to a halt at the side of the road. All spoke to the defender’s car going off the road and ending up on its roof. The only divergence was in the pursuer and his brother describing the defender’s car as rolling over and coming to a halt in the field at the side of the road and the defender describing a similar manoeuvre but with the car ending up on the verge at the side of the road. Although there was some difference between the field at the side of the road and the verge at the side of the road, this difference was more a matter of description than any substantive divergence, with all parties pointing to the same general area where they said that the car had come to a halt. They reported that the defender had exited his car and waited in the field. The pursuer had gone over and checked that he was alright. The pursuer phoned for a garage that he used, AC Taylor Coachworks, to arrange for recovery of his car, which took about an hour. The defender phoned Graham Gardner, the manager at his business, to come and pick him up and asked him to arrange for the uplift of his car. The drivers exchanged details and the defender left first. The pursuer’s father collected him and his brother. None thought that there was any need to phone an ambulance, no one being hurt, and none saw any need to call the police. The pursuer did not contact his insurance company, according to him because he had asked Accident Claims Scotland and been told that he did not need to do so. Although it was put to the pursuer that he had failed to cooperate with his insurers, he was adamant that he had provided them with a statement and had drawn diagrams for them. The defender had provided a six page statement to his insurers, the Party Minuters, who settled his claim immediately and without any issue, his vehicle being written off. It was only some years later that he received a letter from them saying that they were not prepared to indemnify him for the accident.

     

  3. The evidence of the three eye witnesses requires to be weighed against the evidence provided by Alan Bathgate, an engineer, who considered the reported damage to the two vehicles. He saw an inconsistency between the damage to the rear face of the boot lid on the pursuer’s Mercedes car and the damage to the bonnet on the right-hand side of the defender’s BMW car. The damage to the Mercedes was localised at and below bumper level resulting from an impact with sufficient force to push the chassis forward. The damage to the front of the BMW, including the front wing, bumper and headlamp all being pushed backwards, was to the front right hand side which seemed to be above bumper level. This damage was over a wide area and did not in his view correspond to the narrower damage on the Mercedes. He did not see evidence of the BMW bumper support being displaced backwards, which he said would have occurred if the BMW had hit the Mercedes with sufficient force to push the chassis forward. Mr Bathgate’s assessment that the support had not moved was based upon glimpses of it in two photographs taken after the collision which show a part of the structure visible through a gap.Although the Audatex Report quoted for the front bumper support to be replaced, Mr Bathgate refuted this as evidence of damage to it, considering that this would have been replaced even if undamaged. Nor could he understand how the defender’s car had ended up on its roof from such a collision, seeing the post-impact movements of the defender’s car as being disproportionate to the damage sustained by the pursuer’s car. He noted that the BMW had sustained damage to most of its panels consistent with it being rolled over but he envisaged it being rolled onto its side, causing soft damage, and then onto its roof. Had the BMW dropped down into the field and ended on its roof he would have expected the roof structure to have collapsed.

     

  4. By contrast, James McCartney, who provides reports on road traffic accidents based upon his experience in a police traffic department and his training in accident reconstruction, fully supported the account of the witnesses present. He had visited the locus and had found that the ground in the field was soft. To him the damage was consistent with a brief impact occurring after which the defender’s car left the roadway and ended up on its roof. In his opinion the front offside of the BMW impacted the rear of the Mercedes. Had the defender’s car been braking, he considered that this would have lowered the front of the car, accounting for the difference in the height of the damage to both cars. He considered that there had been a glancing blow and that as the defender had been turning the momentum could well have taken him to the verge. For him, the drop after the embankment at the side of the road, at points of about five feet, would account for the defender’s car dipping down and rolling forward, landing on its roof. He viewed the remainder of the damage to the defender’s car as resulting from it overturning down the embankment.

     

  5. While the defender’s insurers challenge the credibility of the accounts of the pursuer, his brother and the defender based upon the analysis of Mr Bathgate, the three involved in the accident gave a very clear and vivid account of what they say occurred. The defender in particular, a 50 year old local businessman, seemed so patently to be telling the truth that there was only minimal challenge of him on that. The decision not to call an ambulance or the police and the failure of the pursuer to advise his insurers of the accident might have made the defender’s insurers sceptical as to the accident occurring but the witnesses seemed genuinely puzzled as to why they would have involved either ambulance or police and the pursuer had an explanation for not notifying his insurers. They seemed puzzled, bemused, annoyed and incredulous at the suggestion that the accident had not occurred. There was no basis established as to why or how they had come together to concoct this account of an accident and the defender’s insurers have been careful not to aver fraud. While the pursuer worked 10 to 15 years earlier delivering pizzas from a shop that the defender owned, he had no dealings with the defender himself, who owned the shop but had a manager who ran it. The pursuer’s brother, who has a separate claim for compensation, said that he did not know the defender. There was no suggestion put to the defender that he knew either the pursuer or his brother. The observations of Mr Bathgate give pause for thought but ultimately in my view do not warrant excluding this direct evidence. Much depends upon the precise way in which the collision occurred in that the angle of the initial blow might affect the damage inflicted. Braking would explain the difference in levels of the damage. If the defender’s car did drop down as it left the road before rolling over and landing on its roof, additional damage would have been inflicted. When so little of the front bumper support is visible in the two photographs and the engineer at the time quoted for its replacement, some movement to it could not be discounted. While the opinion of Mr McCartney was more generalised than that of Mr Bathgate, his assessment of the available evidence based upon his experience from years of attending and reconstructing such incidents does support the direct evidence. Accepting the eye witnesses as credible, I find in fact that the accident did occur as they recounted, with the defender’s car leaving the road, travelling a short distance and coming to a halt on its roof, and find in law that the defender, having collided with the pursuer’s car, is liable to him in compensation therefor.

     

    Quantum

    Solatium

  6. Solatium was agreed at £1,200 inclusive of interest to the date of the proof.

     

    Car repairs

  7. The pursuer is entitled to have his car repaired at the cost of the party responsible, the measure of loss being the expenditure required to put it back into the same state as it was before the accident: Dimond v Lovell [2002] 1 AC 384, 406C. His car was taken to AC Taylor Coachworks for repair. Prior to work being carried out it was examined by Charles Welsh, a motor engineer assessor. He listed the repairs which were needed and the cost of carrying them out, totalling £12,293.70. He proposed that it was viable to carry out such repairs, attributing a pre-incident value to the car of £18,000. The garage duly did the work and submitted an invoice in the exact amount assessed. Accident Claims Scotland has paid the invoice meantime.

     

  8. The repair costs were challenged by the defender’s insurers on the basis that:
    1. AC Taylor Coachworks is no longer in existence. Mr McTaggart, a panel-beater formerly with the business but now operating independently, indicated that the business now trades under a different name. However, that would not have extinguished the pursuer’s liability to pay the invoice to the firm, though it had no premises, to its principals or to its successors if they had acquired its debts. Though Accident Claims Scotland has stepped in on an informal basis to pay the bill pending settlement by the defender’s insurers, in my view they cannot escape liability for it solely on that basis. The cost was incurred and requires to be met.
    2. The labour rate was too high. Mr Welsh proposed £57.50 per hour plus VAT. He proposed that it would take 84.80 hours thus costing £4,876 plus VAT. Mr Welsh and Mr McTaggart explained that insurance companies negotiated rates with specific garages, which agreed these lower rates in order to obtain the volume of work provided, which rates might well be £35 per hour. However, Mr Welsh and Mr McTaggart both said that as the pursuer had the repairs carried out independently, individual garages would charge their own rates. They compared the hourly rate for servicing a car as potentially being £110 per hour. Thus, they considered £57.50 to be a reasonable rate for repair work for a garage not doing bulk repairs for a specific insurance company. In my view where the pursuer has instructed a garage to repair his car it is entitled to charge him a reasonable market rate. On the evidence, £57.50 per hour plus VAT was such a rate and the negotiation of bulk rates by insurance companies does not impact upon this. Thereafter, the pursuer is entitled to recover that labour cost from the defender, and ultimately, his insurers.

       

      Car hire

  9. The pursuer hired a Porche Boxster 3.4 as a replacement car for his seven year old Mercedes SL350 Convertible from Accident Claims Scotland at a cost of £357.576 per day including £10 per day for insurance. He was also charged £100 plus VAT for delivery and collection. An invoice for 44 days’ hire has been drawn up by “vehicle solutions” for £15,853.34. The invoice has yet to be tendered to the pursuer but has been passed to the solicitors instructed on behalf of the pursuer (arranged by Accident Claims Scotland) for onward transmission to the defender’s insurers.

     

  10. The insurers dispute the length of the repair period, citing 32 days as a reasonable period based upon the assessment of Mr Bathgate. The explanation given by Mr McTaggart as to how long it takes to effect such repairs “in the real world”, with potential delays and other cars to be worked on, was persuasive, with Mr Welsh concurring that 44 days was “absolutely reasonable”. On that basis I see no need to restrict any award to fewer than 44 days.

     

  11. The defender as the negligent driver, backed by his insurers, is liable to pay the pursuer’s reasonable charges in hiring a replacement car if this is reasonably necessary: Dimond v Lovell [2002] 1 AC 384, 391A; Allan v Amlin UK Ltd 2014 SLT 75, 80 para 22. However, any additional benefits over and above those incurred under an ordinary car hire contract would have to be brought into account: Dimond v Lovell [2002] AC 384. The defender’s insurers argue that the hire charges include additional benefits such as the costs of conducting the claim, the cost of providing credit, an insurance element and the costs associated with satisfying themselves that the accident was not the pursuer’s fault. Accident Claims Scotland are deferring demanding payment until the conclusion of this claim for damages. Their Director, Mr Haggerty, acknowledged that in the event of the claim being “unsuccessful” they may elect to waive their charges if they felt that the decision was “unfortunate”. Mr Haggerty explained why he maintained that the rate was reasonable, describing the daily rate as a commercial one since it may be some time before it is paid and was in keeping with other credit hire firms, who only operate on a daily rate. Plainly, the business model of Accident Claims Scotland is to take up claims where a third party collided with a person’s car and to arrange the repair of the car, to supply a replacement car and to arrange solicitors to recover the costs incurred. As they do not charge a fee for this, their profit comes from the car hire charges. The pursuer’s contract with Accident Claims Scotland has brought with it the additional benefit that he did not have to make immediate payment for the Porsche. While he said that he was unsure if he would have to pay the invoice on receipt of any damages, it was clear that he did not anticipate having to pay car hire charges. Moreover, the company has taken over the claim against the defender and his insurers.

     

  12. The hire charges incurred can hardly be described as reasonable. The cost would have been sufficient for the pursuer actually to purchase many a new car. The pursuer could have afforded to pay for a replacement car had he wished to do so; he simply took the car offered to him. Mr McTaggart advised that AC Taylor Coachworks had Audi cars available at the time at a daily rate of £100 per day, with no need for delivery charges. Such a car would have been broadly comparable to that of the pursuer and such a rate would represent the market rate of an ordinary car hire company for ready money. Accordingly, this is the amount that he is entitled to recover: Dimond v Lovell [2002] AC 384, 393B, 401F, 402H – 403A. For a period of 44 days, this totals £5,280 inclusive of VAT.

     

  13. I, therefore, find that the pursuer is entitled to decree for payment of £18,875.70 comprising:
  1. solatium of £1,200 inclusive of interest to date,
  2. the engineers’ report of £102,
  3. car repairs of £12,293.70 and
  4. car hire of £5,280.

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