Reasonableness in Mitigation and the Scope of Debarring Orders: Comment on MIB v Houston [2025] EWHC 3178 (KB)

The Motor Insurance Bureau v Drewy Houston [2025] EWHC 3178

This appeal concerned two contentious heads of quantum in a credit hire claim: the reasonable duration of hire and the recoverability of storage charges. The decision is noteworthy in so far as its treatment of “impecuniosity” following a partial debarring order, as well as for its confirmation that appellate courts will be slow to interfere with evaluative findings on mitigation in fast-track cases.

The Recorder awarded the respondent the basic hire rate for a 197-day replacement vehicle period and storage charges for approximately five months. The Motor Insurers Bureau challenged both awards, arguing principally that (i) the claimant had been debarred from relying on impecuniosity, (ii) he had failed to mitigate loss, and (iii) the Recorder’s conclusions were perverse given the low value of the damaged Chevrolet Captiva and the very high cost of the Mercedes GLA credit hire.

Cavanagh J rejected these arguments. His central finding was that the Deputy District Judge’s order expressly debarred the claimant only from relying on impecuniosity for the purpose of establishing the appropriate hire rate. It did not prevent the claimant from advancing evidence of limited means to justify hire duration. The court drew a clear distinction between "impecuniosity as to rate" (Lagden principles) and "impecuniosity as to period", emphasising that the wording of the order governed its scope. Although Umerji suggested that impecuniosity cannot logically be separated across rate and duration, that was in the context of a differently drafted debarring order. Here, the Recorder as well as trial counsel had all understood the order in the narrower sense.

The Recorder’s acceptance of the claimant’s oral evidence that he lacked funds to purchase a replacement vehicle until receipt of the PAV cheque in December 2019 was held to be open to her. Although disclosure was incomplete and the claimant’s financial picture imprecise, credibility assessments and findings of reasonableness in mitigation attract a high level of appellate restraint (Volpi v Volpi). The Recorder had expressly referenced the correct legal test and her conclusion was not perverse.

The challenge to storage costs fared no better. The Recorder accepted that the claimant lacked facilities to store a written-off vehicle and had acted reasonably in leaving it with a storage company until it was scrapped. Notably, at trial the Appellant had effectively abandoned any substantive challenge to the storage period, which further undermined the appeal.

The High Court’s final observation is an instructive one, for, although the claimant succeeded, failure to comply with financial disclosure orders will almost always jeopardise impecuniosity arguments. Here, the claimant was “perhaps fortunate”.