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A second accident does not prevent the recovery of diminution losses

Clifford James successfully represented a client on appeal in the case of Lex Autolease Limited v Tom Shaw [2019], where a vehicle had sustained substantial damage causing it to lose value. However, before the trial, however the same vehicle was destroyed in a later accident.

In the first instance, the insurance company acting for the Defendant argued that the destruction meant that no loss could arise because the Claimant no longer had the vehicle and had been paid a pre accident value, and at the trial, the court ruled in their favour.

However, on the basis that it is settled law that a diminution loss crystallises at the time it occurred (i.e. the first accident), Clifford James appealed the case and claimed that our client was still entitled to the diminution in value notwithstanding the subsequent destruction of the vehicle. On appeal, the Appellant was successful.

In delivering Judgement, Her Honour Judge Evans ruled:

“It is trite law that the loss is suffered at the date the vehicle is damaged and it is trite law that the date at which damages are to be calculated is the happening of the incident that damages the vehicle.

It would be a most unsatisfactory situation if claimants in identical circumstances recovered or did not recover damages depending upon the particular date on which their trial was heard. That is why the rule is that damage is calculated at the date of the accident exists. If it did not exist then somebody in exactly the same position as this Appellant, yet the Appellant would have recovered nothing, simply by the chance of the two cases being heard on different dates. “

Stewart Fairhurst, the Managing Director at Clifford James commented:

“This ruling reinforces settled law that the time for assessing diminution is the date of an accident and that events occurring after this time is irrelevant to the assessment of that loss.

 Events happening after an accident, such as the destruction or subsequent sale of a vehicle has no bearing whatsoever on the ability of a Claimant to claim their loss and confirms that the advice of some defendant solicitors is wrong because it does not give rise to a valid defence in diminution cases.”

If you would like to enquire about making a claim for diminution in value following an accident, please do not hesitate to contact us.