High Court judgment a win for innocent drivers

Should a driver at fault in a crash pay for a replacement vehicle while the innocent driver’s car is out of action? Yes, they or their insurers should, a High Court judge has decided.

In a test case between a company that provides replacement vehicles and insurers, Justice Jagose found that the cost of a replacement car was a reasonable and proper expense sustained by drivers who were not at fault.

The case involved three plaintiffs who used Right2Drive’s (R2D) replacement vehicle service. The company does not charge not at-fault drivers for the rentals, instead pursuing those responsible or their insurers. The insurers had not paid the plaintiffs’ charges, totalling almost $9000.

The judgment said that since R2D entered the New Zealand market in 2016, insurers had declined to pay $4.22 million of its charges.

Lawyers for the defendants and their insurers argued that the plaintiffs had not actually suffered losses, because R2D had met the costs of the replacement cars. If they were found liable for damages, the insurers argued that R2D’s charges were not reasonable compared to market hire rates. They said the plaintiffs had other, cheaper options from conventional rental car companies, insurers and repairers.

Justice Jagose found there was an actual loss to the not at-fault drivers while their cars were being repaired. He said R2D’s charges were generally consistent with those of conventional rental companies, particularly because of the uncertainty about the hire period in such cases.