Hussain. Again. Taxi Credit Hire in 2024.
I recently represented the Defendant in Mazahar Hussain v EUI Limited[2024] EWCC 16. A copy of the judgment handed down by HHJ Malek in Bradford is available here:
The judgment provides a thorough guide to the application of the principles set out in Hussain v EUI [2019] EWHC 2647 (QB).
The Claimant, a self-employed taxi driver, sought damages for various heads of loss. The claims for the pre-accident value of his vehicle and PSLA were unremarkable. The judge dismissed a claim for storage and recovery in its entirety.
The main head of loss related to a claim for credit hire charges for a plated vehicle in the sum of £33,140.52. The Claimant hired for a period of 162 days at at a daily rate of £203.46 including CDW and VAT. The Claimant had actually replaced the damaged vehicle within about five weeks of the date of the accident but continued to hire due to difficulties in getting the new vehicle plated by the local authority.
The Claimant did not assert impecuniosity and provided no financial disclosure. He asserted that he required a vehicle to continue with his employment and for social use.
The Claimant asserted that he fell into the first of the Hussain exceptions in that he risked losing future business if he did not continue to work. In support of that assertion, he relied upon a letter from his taxi base which suggested that he would permanently lose his place on the base if he was absent for more than seven days.
The Defendant argued that the Claimant should be restricted to loss of profit (zero, in the absence of financial disclosure) and BHR for a non-plated vehicle for the period until the Claimant’s own vehicle was replaced. The Defendant argued that the Claimant did not fall into any of the Hussain exceptions such that he was entitled to recover the cost of hiring a taxi.
In relation to the risk of losing future business, the judge held:
11. In my judgment there are a number of steps that need to be taken. The starting point requires an understanding of the Claimant’s profitability prior to the accident. That enables a calculation to be made of the pro-rata loss of profit over the relevant period. The next step in the calculation is to estimate the hypothetical loss of profit that might arise from the fact that by not providing his services a professional driver risks the permanent impairment of his trade.
12. In the case of a self-employed professional private hire taxi driver plying his trade, whether by using the services of one or more taxi “bases” or not, requires the consideration of two things. The first, and easiest to work out, is the profitability of his or her trade. The next is the likelihood that his business (of being a self-employed private hire taxi driver) will be permanently impaired. This involves not only a consideration of whether or not he may be “dropped” by one “base”, but also whether or not he is able to move to another “base” or take advantage of an online platform such as Uber.
13. Another, and perhaps better, way of looking at the same thing is to ask how long is it reasonable for a business to continue to operate at a loss (by for example hiring a vehicle) in order to ensure that future business is not permanently impaired? The answer to the question will depend on (a) how profitable the business is, (b) the size of the loss, and of course (c) the likelihood that the business would be permanently impaired absent the mitigation. Clearly, the less profitable the business and/or the greater the loss (i.e. greater the cost of hire) the less likely it is to be a reasonable course of action. Likewise, if there is little likelihood that the business will be permanently impaired then the less reasonable it will be to spend significant sums in mitigation.
14. It might, fairly, be said that the approach I have set out above is overly technical and no professional driver would address his mind to these matters in the way that I have set out. Whilst I accept that the way I have set out the considerations might be seen as overly theoretical I think it does a disservice to professional drivers to suggest that they are not able to address their minds to these issues. Any businessman who is faced with the dilemma of having to operate at a loss in order to ensure that his business is not permanently affected will give careful consideration to the profitability of the business, the size and duration of the loss and the likelihood that, absent running at a loss for a period of time, the business will be permanently impaired. Whilst s/he may not give express voice or set out each separate consideration in the way that I have I am sure that no rational or reasonable decision can be made absent such considerations. Allied to that I also accept that claimants who find themselves the victims of acts of negligence are not expected to weigh matters to “a nicety” when attempting to mitigate their losses. However, they will, as a matter of logic if nothing else, have had, at the very least, to have given some thought to all of these matters before s/he can be heard to say that s/he acted in mitigation.
15. Neither will a bare assertion that the claimant has thought about mitigation suffice. The court will need to understand whether the proposed course of action taken by a claimant is an act of reasonable mitigation bearing in mind the individual circumstances. The profitability and likelihood of permanent impairment of the business are key to making such an assessment and, accordingly, a claimant should come to court fully prepared to evidence these matters.
16. In this case the Claimant provides absolutely no financial information or evidence of his profit (or hypothetical loss of profit in the event his trade was compromised) or even hint at having given this any thought before opting to hire a vehicle which would cost him £203.46 per day. Accordingly, he cannot hope to persuade a court that the first exception in Hussain applies to him.
With regard to the letter from the taxi company:
17. Even if I am wrong about the above and the Claimant need not evidence his profitability as a self-employed driver, the evidence that he does provide, which appears to be aimed at demonstrating that his future trading would be compromised, is woefully inadequate. All that the Claimant is able to muster by way of evidence is a letter from “Barkerend Taxis” addressed to him in which it is said:
“We put you on notice that you are required to work with a licensed vehicle that is in a suitable condition with the relevant licensing documentation within the next 7 days. If you do not return to work within the prescribed 7 days you will be disconnected from our dispatch system. A driver who has been disconnected, cannot rejoin on a later date”.
18. As a starting point, it seems to me to be inherently unlikely that Barkerend Taxis would seek to end its relationship (and permanently so) with a driver (who on the evidence had been with them for some 8-9 years) because he was unable to provide his services as a taxi-driver for more than 7 days. Not only would this mean that the Claimant could not be on holiday, for example, for more than 7 days without losing his position (again inherently unlikely), but Barkerend Taxi’s position (as set out in the letter appended to the Claimant’s witness statement) is implausible to say the least. Barkerend Taxis, on the evidence, appear to work as a conventional taxi “base” operating a “dispatch system”. Such businesses, of which fact I am able to take judicial notice, apply a charge or license fee to each taxi driver working with them with such fees being colloquially referred to as a “radio fee” and charged, typically, on weekly or monthly basis. The income of these businesses is derived directly from the “radio fees” that they charge and telling a driver that s/he cannot return if s/he is absent for more than 7 days would, on the face of it, be an act of self- harm resulting, as it would, in the loss of revenue. There may, of course, be good reasons as to why a taxi base business may wish to end a relationship with a taxi-driver even if it results in a loss of revenue. In this case it is said by Mr. Hussain (and notably not Barkerend Taxis) that the reason why Barkerend Taxis would not want to continue their business relationship with the Claimant if he was not available to drive for more than 7 days is because they “needed to have sufficient number of drivers available to maintain their contracts and service levels…”. The difficulty with this is that this is, again, inherently implausible. If Barkerend Taxis were so busy, as seems to be the implication, that the unavailability of even one driver for more than 7 days, would jeopardise their “contracts” and service levels then what could they hope to gain by permanently excluding an otherwise good driver? This would clearly just make matters worse for them.
19. Given what I say above I treat the letter from Barkerend Taxis to the Claimant with some caution. In addition, the letter relied upon by the Claimant appears to be from “Barkerend Taxis” (it being unclear whether this is a company, sole trader or partnership business), signed by a “A M khan” who is otherwise unidentified (either by reference to his full name, address, or relationship with Barkerend Taxis) and is undated.
20. Further, the letter was received (on the Claimant’s own evidence) by him 2-3 days after he had his accident. It was the Claimant’s evidence that he had, previous to the receipt of the letter in question, been unaware that he was at risk of losing his position with Barkerend Taxis if he was unavailable to work for more than 7 days and had not previously ever received such a “notice”. If the letter was received 3 days after the accident then the Claimant had already entered into a hire agreement by this stage. If it was received on the second day then it was received on the day that he entered into hire, and in all likelihood, after he had made the decision to go into hire having, more than likely, already set the mechanics of the hire up. On the balance of probabilities the letter from Barkerend Taxis is unlikely to have been the operative cause of the Claimant entering into a credit hire agreement.
21. More fundamentally, I agree with Mr. Richmond that the letter seems to be an attempted unenforceable unilateral variation of the contract (whatever the exact terms of the latter may have been) between the Claimant and Barkerend Taxis. However, this is not the same as an argument on the enforceability of a hire agreement, but rather the court needs to ask itself whether or not the Claimant acted reasonably in relying upon the letter that he received, irrespective of the legal merits of it. I accept that the Claimant may not have appreciated the legal nuances of the position that he found himself in. However, it seems to me perfectly reasonable to expect him to have taken legal advice or at the very least queried the contents of the letter with the author – after all a valuable future relationship (apparently worth preserving even at the expenditure of thousands of pounds on credit hire) was at stake. On his own evidence the Claimant did neither. Had the Claimant taken legal advice it is likely that such advice would have been to the effect that the threatened unilateral change to his contract with Barkerend Taxis was unenforceable.
Accordingly, the Claimant did not fall into the first Hussain exception. He could not recover the cost of hiring a plated vehicle and was only entitled to the non-plated BHR for whatever might be the appropriate period.
The judge accepted that any delays in relation to licensing the Claimant’s new vehicle were irrelevant. The Clamant had a new vehicle which he could use for social purposes by five weeks post-accident. It was appropriate to restrict any hire charges to that period.
The judge awarded £2,162.75 for hire. Overall, the Claimant failed to beat a Part 36 offer made some time earlier by the Defendant and costs consequences followed.
The decision is not binding but is sufficiently thorough to provide sensible guidance in cases where similar facts arise.
Many thanks to Jess Wong at Horwich Farrelly for her instructions and for her sensible approach throughout.
If you would like to discuss the case or similar cases, then please feel free to contact me in chambers on 0113 228 5000. If you would like to instruct someone from the PLP credit hire team generally then please get in touch with the clerks on 0330 390 4301.
