Car hire companies who pursued actions in motorists’ names to recover the costs of hiring a replacement vehicle after an accident, from negligent drivers, were not acting in a champertous and unlawful manner. Lord Mustill said: ‘there exists in practical terms a gap in the remedies available to the motorist, from which the errant driver, and hence his insurers, frequently profit’. All aspects of the transactions should be taken together, and looked at as a whole, in order to answer what was the single and only question for a court facing the champerty argument, that is: ‘Whether there had been wanton and officious intermeddling with the disputes of others, in which the meddler has no interest whatsoever, and where the assistance he renders to one or the other party, is without justification or excuse.’
There had been no assignment of the damages to the accident hire company nor were they entitled to be paid only out of the damages recovered: ‘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 car was not ‘free’.’
Judges:
Lord Mustill, Lord Keith of Kinkel, Lord Ackner, Lord Jauncey of Tullichettle, Lord Lowry
Citations:
Gazette 14-Jul-1993, Times 01-Jun-1993, [1994] 1 AC 142, [1993] UKHL 2, [1993] 3 All ER 321
Links:
Statutes:
Jurisdiction:
England and Wales
Citing:
Appeal from – Giles v Thompson CA 1992
The interest that the rule of champerty exists to protect (the individual interest) is that of the opposite party. Steyn LJ described contingency fee agreements as ‘nowadays perhaps the most important species of champerty’ and were ‘still unlawful’. . .
Cited – British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd 1908
The court explained the law underlying the civil and criminal penalties for the maintenance of an action by third parties: ‘It is directed against wanton and officious intermeddling with the disputes of others in which the [maintainer] has no . .
Cited – Trendtex Trading Corporation v Credit Suisse CA 1980
A stay was sought against a bank which had financed a contract and was supporting litigation arising out of it.
Held: Although the liability in crime and tort had been abolished, Section 14(2) of the 1967 Act preserved the law as to the cases . .
Cited – Martell v Consett Iron Co Ltd ChD 1955
In a case of maintenance (as opposed to champerty), a stay should not be ordered. The laws relating to maintenance and champerty must develop to accommodate to changing times. . .
Cited – Harlow and Jones v Panex (International) Ltd ChD 1967
The sellers claimed under a sale contract against buyers who had refused to accept goods. By reason of the buyer’s non-acceptance of the goods, the sellers had incurred storage charges to their own suppliers with whom they had entered into an . .
Cited – Donnelly v Joyce CA 18-May-1973
A six year old injured his leg in a road accident, and needed daily attention. His mother gave up her job to look after him. The claim for damages on behalf of he boy included the mother’s loss of earnings. This was objected to on the grounds that . .
Cited – Trendtex Trading Corporation v Credit Suisse HL 1981
A party had purported to sue having taken an assignment of a dishonoured letter of credit, in the context of the abolition of maintenance and champerty as crimes and torts in the 1967 Act.
Held: The assignment was struck down as champertous, . .
Cited – McAll v Brooks CA 1984
After a road accident the plaintiff hired a car. His insurance brokers provided the car under an arrangement that was alleged to be illegal insurance business and would have prevented them from being subrogated to the plaintiff’s claim for damages . .
Cited – Cosemar SA v Marimarna Shipping Co; The Mathew 1990
The ship’s master had failed to endorse the bill of lading properly so as to reverse the liability for payment of freight to the time charterers. The arbitrator had found that the mistake had caused no loss since the shippers would probably have . .
Cited – Harbutt’s Plasticine Ltd v Wayne Tank and Pump Co Ltd CA 1970
The plaintiffs’ factory in an old mill, burned down because Wayne Tank had installed a pipeline made of unsuitable and dangerous plastic material and wrapped in heating tape attached to a useless thermostat. It had been switched on and the plant . .
Cited – H Cousins and Co Ltd v D and C Carriers 1971
. .
Cited by:
Cited – Dimond v Lovell HL 12-May-2000
A claimant sought as part of her damages for the cost of hiring a care whilst her own was off the road after an accident caused by the defendant. She agreed with a hire company to hire a car, but payment was delayed until the claim was settled.
Cited – De Crittenden v Bayliss CA 21-May-2001
The defendant sought leave to appeal saying the agreement under which the plaintiff had sued was champertous. Leave given. . .
Cited – De Crittenden v Bayliss CA 17-Jan-2002
The defendant appealed a judgment saying the arrangement under which the plaintiff had conducted the litigation was champertous.
Held: The appeal failed. ‘[A]lthough some of what Mr De Crittenden did could be described as ‘solicitors work’, . .
Cited – Bee v Jenson CA 13-Sep-2007
The claimant hired a car whilst his own, damaged by the defendant, was being repaired. His insurer sought to recover the cost from the other driver. The insurer had first arranged te hire with one company, but then another provided a finacial reward . .
Cited – Sibthorpe and Morris v London Borough of Southwark CA 25-Jan-2011
The court was asked as to the extent to which the ancient rule against champerty prevents a solicitor agreeing to indemnify his claimant client against any liability for costs which she may incur against the defendant in the litigation in which the . .
Cited – Simpson v Norfolk and Norwich University Hospital NHS Trust CA 12-Oct-2011
The court was asked whether it was possible to assign as a chose in action a cause of action in tort for damages for personal injury, and if so under what circumstances it was possible.
Held: The appeal was dismissed. The claimant did not have . .
Cited – TGA Chapman Limited; Benson Turner Limited v Christopher and Sun Alliance and London Insurance Plc CA 8-Jul-1997
A section 51 application was made because the cover was limited under the defendant’s liability policy and insufficient to pay all the damages, let alone any part of the costs, and the defendant was not worth powder and shot. Nonetheless the claim . .
Cited – Travelers Insurance Company Ltd v XYZ SC 30-Oct-2019
Challenge to the making of a non-party costs order under section 51 of the Senior Courts Act 1981 against the product liability insurer of one of the defendants in litigation being managed under a Group Litigation Order (‘GLO’). Many of the . .
Cited – Murphy, and Murphy v Young and Co’s Brewery Plc, Sun Alliance and London Insurance Plc CA 20-Nov-1996
When an unsuccessful party has had its legal costs funded under legal expenses insurance, should the insurer be held liable to pay the successful party’s costs? The insurer had not instigated the litigation, nor controlled it, and could not be . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice
Updated: 04 May 2022; Ref: scu.80825
