Background
Our client, the plaintiff, is a 24-year-old provisional licence holder who was involved in a not at fault car accident on 10 June 2021. Shortly after the accident, on 22 June 2021, the plaintiff entered into an agreement with an accident replacement vehicle provider for a hire car to enable him to fulfil his day-to-day commitments. The plaintiff had separate legal representation in relation to the damages caused to his vehicle.
Total Loss Settlement
A month after the car accident, on 9 July 2021, the plaintiff was made aware that his vehicle was a write-off. However, the at fault driver’s insurer, Suncorp, did not confirm liability until 12 July 2021 and then delayed making an offer until 30 August 2021, which was 6 weeks later. The offer was not acceptable to the plaintiff as it was for a sum less than his own view of the market value and as a result, he asked his lawyers to make a counteroffer.
On 15 September 2021 a response had not been received and a follow up email was sent. On 28 September 2021, Suncorp sent a response indicating they would not resile from their initial offer. On 8 October 2021, for a number of reasons including the prohibitive costs of litigation, the plaintiff accepted the offer. On 21 October 2021 the plaintiff received the settlement funds and returned the hire car to the accident replacement vehicle provider on 23 October 2021.
Why Did This Case Go To Court?
Suncorp argued that it was not reasonable for the plaintiff to continue using a hire car from 9 July 2021 onwards, as he knew his own car was a write-off and therefore could immediately be replaced. Suncorp also argued that it was not reasonable for the plaintiff to continue to use the hire car through the accident replacement vehicle provider after 30 August 2021, since this was the date the initial offer was made and submitting that the plaintiff was seeking to profit opportunistically from the collision.
What Were The Court’s Findings?
The court found that it was satisfied on the balance of probabilities that it was reasonable for the plaintiff not to purchase a replacement vehicle for himself until after the settlement funds were received. The plaintiff was not in a financial position to purchase another vehicle without these funds.
The court found on the balance of probabilities that it was reasonable for the plaintiff to seek a review and to negotiate with the at fault insurer. It was also reasonable for the plaintiff to continue to use the hire car beyond 30 August 2021 until he returned it to the accident replacement vehicle provider within 2 days of receiving the settlement funds.
The court also found that the rate charged by the accident replacement vehicle provider was reasonable in all the circumstances and awarded the plaintiff its claim in full together with interest and costs.
Conclusion
The decision is significant as it reinforces the fact that an innocent party to a motor vehicle collision should be able to mitigate their losses by continuing to use a hire car until after they’ve received settlement funds. It also confirms that an innocent party should be able, within reason, to seek to review and challenge insurer’s decisions.
