Credit Hire Charges - How Much Is Too Much?

I have reviewed a raft of cases recently which has highlighted to me just how far the daily credit hire rates charged by some firms has increased in recent years. 

In some cases now, hundreds of pounds a day are being charged for vehicles classified under the General Terms of Agreement (GTA) as S1 or S2.   It leads me to think whether or not there is a line to be drawn in the sand in terms of just how high a daily charge can go before it is considered to be an unreasonable mitigation of any loss of use.  I think most would agree that there is a line in the sand somewhere; the debate being where on the scale that line is drawn. 

If we are to agree that hiring at credit hire rates is justified as a reasonable mitigation of a loss of use (the issue of impecuniosity notwithstanding), how high does that daily charge need to be before it can no longer be considered reasonable?  In a post-Covid, digital world where more and more people are working from home, and goods are delivered to homes at the click of a button, it seems that as the daily rates increase, alongside that will be an increase in the burden on a claimant to prove that the sums represent reasonable mitigation.

Of course, claimants will rightly point to well-rehearsed issues which identify and justify need for a replacement vehicle, but a question which may become more pertinent is whether or not the need can be justified at any cost, no matter the daily rate charge.

In examining the disparity between basic and credit hire rates, a good number of cases come down to a one issue shoot out on impecuniosity, with the difference between the two rates ever-more stark.   Even in cases where impecuniosity is proved, but the credit rate is extremely high it may be that the courts begin to look more closely at issues of reasonableness and mitigation.

Given that much spoken about supply chain difficulties and global inflationary pressures, and without any market regulation on the horizon, daily rates for non-GTA suppliers are only likely to continue to go one way.  It may be therefore that in the coming year, the courts provide some guidance as to where they consider the line should be drawn.