West Midlands Travel Ltd v Aviva Insurance UK Ltd

West Midlands Travel Ltd v Aviva Insurance UK Ltd

General damages for loss of use of a public service vehicle, where the operator maintains spare capacity and suffers no specific loss of revenue, should be assessed by reference to the capital tied up in the vehicle (or daily lease rate if leased), depreciation, and expenses thrown away, not by allocating a proportion of total overheads or using the 'standing charge' approach.

Parties
Claimant/respondent: West Midlands Travel Ltd; Defendant/appellant: Aviva Insurance UK Ltd
Jurisdiction
England and Wales
Judgment Date
18 July 2013
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal allowed; case remitted for reassessment of damages.
Legal Topics
Damages Assessment, Loss of Use, Road Traffic Accidents, General Damages, Special Damages
Tort Law Insurance Law Damages Assessment Loss of Use Road Traffic Accidents General Damages Special Damages

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Parties

West Midlands Travel Ltd

Claimant/respondent

Aviva Insurance UK Ltd

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 How should general damages for loss of use of a public service vehicle be assessed when the operator maintains spare capacity and suffers no specific loss of revenue?
  2. 2 Is the 'standing charge' approach or the 'interest on capital and expenses thrown away' approach the correct measure of damages in such cases?

Ratio Decidendi

General damages for loss of use of a public service vehicle, where the operator maintains spare capacity and suffers no specific loss of revenue, should be assessed by reference to the capital tied up in the vehicle (or daily lease rate if leased), depreciation, and expenses thrown away, not by allocating a proportion of total overheads or using the 'standing charge' approach.

Court Disposition

Appeal allowed; case remitted for reassessment of damages.

Orders

  • High Court to reassess damages in accordance with the principles set out in this judgment.
  • Judge's order for costs set aside; costs to be reconsidered after reassessment.