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15 December 2023

Street Furniture claims by National Highways – The Story So Far

“Street Furniture claims by National Highways”

 

  1. A driver negligently loses control of their car and damages street furniture (reservation barriers, road signs, bollards, that type of thing). The owner of the street furniture, National Highways, claims for the damage to their property. Simple restitution one might think. Easy peasy. Well think again.

 

  1. What might, to the reasonable observer, appear a simple matter, has nonetheless become the subject of litigation up and down the country. A test case has been heard before a Circuit Judge with both sides represented by KCs (see National Highways v Hubble, HHJ Hassal, Manchester County Court 13th January 2023), and several cases have been assigned to DCJs to ‘give a steer’ to District Judges hearing these claims.

 

  1. This litigation bears many similarities to the RSA Litigation which led to Coles v Hetherton [2013] EWCA Civ 1704. Essentially RSA engaged a repairs company on contractual terms to handle repairs to its insured vehicles. The actual amount RSA paid for repairs and the contractual terms between RSA and the repairer company were not disclosed. RSA then claimed the reasonable cost of repair which they sought to establish by documents with titles such as ‘Breakdown of Invoiced Costs’.

 

  1. Other insurers suspected that this was a means to recover more than RSA’s outlay and effectively make a profit on repair costs at their expense. The Court of Appeal in Coles came down largely on the side of RSA in finding that i) the loss was the diminution in value of the vehicle (general damages), ii) the diminution of value was ordinarily measured by the reasonable cost of repair and iii) the actual cost of repair was not relevant as to the legal principles, albeit may be relevant as an evidential tool to assess the reasonable cost of repair. Only if the sum claimed seemed ‘clearly excessive’ will the Court be justified in investigating whether the sum exceeds the cost that the claimant would have incurred in having the repairs carried out by a reputable repairer on the open market.

 

  1. Presumably on consideration of the Coles decision, National Highways have set up a similar scheme in relation to repairs of highway furniture. National Highways have a statutory duty to maintain and repair highway furniture and, rather than claim their actual outlay for repair, they make a claim in General Damages for the diminution in value of their chattel and present documents with titles such as “Statement of Value” said to represent the reasonable cost of repair. Aviva Insurance in particular have taken a stand against this approach and defended such claims with some success.

 

  1. The approved Judgment of DJ Mantle in NH v Aviva J36 YX 761 heard in Birmingham County Court (10th April 2023, handed down 25th April 2023) is very helpful in setting out the issues and approaching the matter with sound reasoning. It is a relatively short Judgment (13 pages) and should be read in full. DJ Mantle dismissed National Highways claim.

 

  1. DJ Mantle essentially says that whilst Coles is the starting point, if a claim is brought for diminution in value as measured by reasonable cost of repair, and the claim is challenged, the Claimant must provide some evidence of the reasonable cost of repair. The contractual rates are not evidence of the reasonable cost of repair. Allowing the contractual rates for repair to stand as the reasonable cost of repair is to allow the Claimant to set their own “market cost” rate for repair. This is undesirable (and it might be said, particularly so where the Claimant is a big player / sole player in the market). DJ Mantle states that the Court cannot simply take a view as to what might constitute a reasonable cost of repair.

 

  1. DJ Mantle found that the contractual rates in evidence before him were not evidence of the reasonable cost of repair and therefore, in the absence of any evidence as to the reasonable cost of repair, dismisses the claim in its entirety. It might be said that this sits a little uneasily with Coles, in so far as that in Coles the contractual rates were sufficient unless the Court deemed them clearly excessive. DJ Mantle addresses this in part at paragraph 40(e) of the Judgment;

Whilst I am mindful of questions of proportionality, I cannot see that it is open to the Court to simply take a view without any evidence as to what might constitute reasonable costs of repair. Whilst the Court can, in certain circumstances, take “judicial notice” of matters well known, the appropriate repair costs to the central reservation barrier is a long way outside of the permissible scope of such a principle.

 

  1. In my opinion, and expanding on DJ Mantle’s comments, on a broad brush approach a Judge might be able to take a preliminary view of the cost of repair to a motor vehicle based on the extent of the damage and the make, model and age of the vehicle. Motor vehicles are after all owned by many people, certainly most Judges, and are regularly subject to repair and maintenance. Highway furniture is a very different kind of chattel, owned exclusively by National Highways, and confronted with photographs and description of bent metal reservation barriers or damaged road signs a Judge is unlikely to have the faintest idea as to the reasonable cost of repair. Diminution in value is a straightforward concept to apply to a motor vehicle, a chattel for which there is an efficient and extensive market for trade and repair. However, as a concept, diminution in value is perhaps more difficult to measure or apply in the context of street furniture.

 

  1. Following the guidance set out by DJ Mantle the position is that whilst there is nothing in principle preventing National Highways recovering reasonable cost of repair as opposed to their actual outlay, they need to bring evidence to support their valuation of reasonable cost of repair. Documents passed between them and their supplier are not evidence as to the reasonable cost of repair.

 

  1. Litigation on these matters is likely to run for some time yet.

 

PETER HARTHAN
7 HARRINGTON STREET
13th December 2023

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