Have you renewed your MOT? RTA claims and “ex turpi causa”
10 December 2024
Ali v HSF Logistics Polska SP ZOO [2024] EWCA 1479
This was a very simple case that illustrates in a nutshell the courts’ approach to the principle of “ex turpi causa”: the notion that prevents a claimant from seeking a legal remedy if the claim arises in connection with their own illegal or immoral act. Even in a civil case, courts are reluctant to allow a party to benefit from their own wrongdoing, as it may be seen as contrary to the interests of justice and social morals. However, it cannot be a blanket rule, as we shall see from the case below. Proportionality has to to be applied.
This concerned an RTA leading to a claim for damages by the claimant for repair to his car after the defendant negligently drove his lorry into it whilst it was parked.
A small and mundane detail could have made all the difference to the outcome. The claimant had not renewed the MOT on his car for some months before the accident, so that the defendant pleaded that the the claimant’s argument that he needed to be reimbursed for the car he had to hire after his car had been damaged meant that he had had no insurance at the time of the accident, and that the claim should fall as being ex turpi causa (Agheampong v Allied Manufacturing (London) Ltd [2009] Lloyds Rep IR 379.)
Furthermore, and as the next logical step, the defendant asserted that, because there was no valid MOT certificate for the Volvo, the claimant had suffered no compensable loss when the Volvo was rendered unroadworthy by the defendant’s tort. This was called a “causation defence”.
Background law
Stuart-Smith LA gave judgment for the Court of Appeal. He starts with this pungent observation:
“the present case is yet another skirmish-cum-battle in the overall “secular war” between the credit hire industry and defendants’ insurers.” [para 8]
In other words, the car hire industry once they have a whiff of litigation will attempt to charge as much for a claimant’s car hire if they suspect the payment will be coming out of a losing defendant’s insurer’s deep pocket.
In order to reach the right answer, it was necessary to bear in mind the following legal principles.
A person whose car has been damaged is entitle to compensation for the loss caused. But he must take reasonable steps to mitigate the loss. Unless the car is being used for business purposes, the damages are part of the compensation for non-pecuniary loss, ie the lack of advantage and inconvenience caused by not have the use of a car ready at hand at and all hours for personal or family use.
The need for a replacement car is not self-proving and must be proved by the claimant.
Proof of that need does not simply depend upon the fact that the claimant had a car which has been damaged; rather it depends upon the claimant proving a need for transport which, as a matter of fact, they were satisfying by using their car until it was damaged by the defendant’s tort. That is why the courts have referred to the foundation of the claim being the inconvenience to the claimant caused by the defendant’s tort, which sounds in general damages until those general damages are quantified by reference to hire charges and transformed into claims to recover those hire charges as special damages.
If in truth the claimant would have had no call to use a vehicle and would not have done so during the period that their car was off the road, it would not be reasonable to hire an alternative vehicle and the cost will not be recoverable from the defendant.
Years of litigation have led to the following questions being laid out by Aikens LJ in Pattni v First Leicester Buses Ltd [2011] EWCA Civ 1384, [2012] RTR 17 at [73]:
(i) did the claimant need to hire a replacement car at all; if so,
(ii) was it reasonable, in all the circumstances, to hire the particular type of car actually hired at the rate agreed; if it was,
(iii) was the claimant “impecunious”; if not,
(iv) has the defendant proved a difference between the credit hire rate actually paid for the car hired and what, in the same broad geographical area, would have been the hire rate for the model of car actually hired and if so what is it; if so, (v) what is the difference between the credit hire rate and the basic hire rate?”
On the question of ex turpi causa, the Court reiterated that a person should not be allowed to profit from his own wrongdoing. The courts should avoid being “unduly precious” at the first indication of unlawfulness, and they should not refuse all assistance to a plaintiff if their loss is out of proportion to the unlawfulness of their conduct. Punishment is, after all, the responsibility of the criminal courts. “The civil courts should not undermine the effectiveness of the criminal law; but nor should they impose what would amount in substance to an additional penalty disproportionate to the nature and seriousness of any wrongdoing.”
The case law shows a distinction between cases of ex turpi causa non oritur actio (where the illegality barred the entire claim) and what he described as ex turpi causa non oritur damnum (where the illegality barred recovery of one or more heads of damage but not the entire action). So, the relevant principles may lead to a denial of the entirety of a claimant’s claim (“action”), or a part of it (“damnum”). This is an essential part of the flexibility of the common law. So, where, for example, a person is disabled by the defendant’s tort from carrying out legitimate work but it is discovered that they have not been paying tax on their income from that work, the law’s response is not to refuse all recovery; instead it awards the sum that represents the claimant’s loss of income but net of tax
Legal principles applied to this case
When using his car on the road without a valid MOT, the claimant had exposed himself to the risk of prosecution and a fine under the Road Traffic Act. The driving of a car without a valid certificate of insurance (itself dependant on an MOT) involves a lesser offence.
The Recorder, at first instance, had found that allowing the claim “where the presence of the defendant’s vehicle on the road amounts to a breach of the criminal law by reason of its not having a valid MOT and may also be uninsured would in principle be harmful to the integrity of the legal system.” On the other hand there was no evidence that the claimant’s car had been unroadworthy; this was part of the proportionality test for ex turpi causa, as opposed to the illegality test. In his view, particularly as the car was parked at the time of the accident, it would have been disproportionate to deny his claim by reason of his not have a valid MOT certificate.
But he accepted the defendant’s argument that the claimant could not be entitled claim damages to cover the hire a car which he could legally use on the road while his car was being repaired, even that irrespective of the accident he did not have a car which he could lawfully use on the roads.
“The credit hire claim …is a claim founded in the principle of mitigation of loss. If it succeeds, it does so because it is an expense reasonably incurred by a claimant in mitigation or avoidance of a claim for loss of use of their vehicle. The question of whether a claimant acts reasonably in hiring a replacement vehicle is separate from any issue of illegality.
… Even more fundamentally, in order for the issue of mitigation to arise, it is necessary for a claimant to have a loss of use claim in the first place. If immediately before the accident, a claimant does not have a vehicle which they were entitled to use on the public highway, they cannot claim for the loss of use of such a vehicle, because they have no such loss.” [paras 50-51]
The Court of Appeal allowed the claim and dismissed the defendants’ arguments on causation defence. The claimant was entitled to recover the hire charges in full.
Reasoning behind the judgment
The defendant’s tort caused the claimant to be deprived of the use of an item of property, which caused inconvenience in the form of inability to use it for private transport. The fact that a claimant did not have a valid MOT certificate for the car did not alter the fact that they had been deprived of its use or the fact that this deprivation would have caused inconvenience but for the hiring.
The Recorder’s finding that the claimant’s claim for hire charges was NOT barred by the principles of ex turpi causa was clearly right. It is self evidently true that the criminal offence of failing to obtain an MOT certificate is a relatively minor offence which does not carry great weight when considering proportionality.
Allowing the recovery of hire charges in the present case did not undermine the effectiveness of the criminal law; on the other hand denying recovery may amount to an additional penalty disproportionate to the nature and seriousness of any wrongdoing.
“Refusing a claim for just over £21,000 because of the absence of a valid MOT which exposes the Claimant to a potential fine of £1,000 raises immediate and troubling questions of proportionality. Questions of proportionality are properly raised and of central importance when considering ex turpi causa” [para 50]
“in the febrile atmosphere of credit hire claims can there be any confidence that, if the causation defence were permitted in principle, anything less than scrupulous attention would be paid by defendants’ insurers to such relatively trivial defects. The absurdity of such an outcome itself suggests that the causation defence is misconceived, as I would hold it to be. When stripped to its bare essentials, the argument underlying the causation defence is not that the claimant has suffered no loss of use, but that damages ought not to be recovered for loss of use where the use of the original vehicle would have had adverse legal consequences for the claimant as a matter of criminal law. This is the stuff of ex turpi causa, not causation.” Para 54]
