In August 2024 our client was involved in a straightforward non-fault road traffic incident when their parked vehicle was struck by a third-party motorist reversing into it.
Non-contentious liability
Liability was not contentious. The third-party insurer accepted responsibility at an early stage, and there was nothing unusual about the circumstances of the accident itself.
The physical damage to the vehicle was relatively modest, and our client arranged repairs at a cost of £1,850.65 plus VAT—a reasonable figure that, in isolation, might appear to make this a routine low-value claim.
Where the claim became more significant, was regarding Loss of Use.
Applying established Loss of Use principles to this claim
Loss of Use is a distinct and recoverable head of loss. The proper approach to its calculation is well established through West Midlands Travel v Aviva, whereby the principle is straightforward: Loss of Use is not measured by the cost of repairing the vehicle. Instead, it is assessed by reference to the daily cost of running the vehicle over the period it was unavailable while repairs were completed.
Applying that method here, our client’s loss of use was calculated at £2,898.00.
This is precisely the sort of figure insurers frequently challenge. A common defence is that the Loss of Use claim is “disproportionate” when compared with the repair costs, but that argument misunderstands the nature of the loss.
The cost of repairs is irrelevant to the calculation. Loss of Use should be proportionate to the time it was off the road and the cost of the unavailable vehicle or the spare capacity vehicle. That does not translate as proportionate to the repair costs, necessarily. Repair costs measure the physical damage caused to the vehicle whereby Loss of Use compensates the owner for being deprived of that vehicle during the repair period. They are separate heads of loss and are assessed on different legal bases.
Why this distinction matters
A vehicle may sustain relatively minor physical damage but still remain off the road for a meaningful period. When that happens, a properly calculated Loss of Use claim can exceed the repair invoice. That does not make the claim excessive—it makes it legally correct.
How we fight for our clients’ recoveries
We pay particular attention to Loss of Use as a recoverable Head of Loss for our clients, by ensuring Loss of Use is properly advanced and properly defended when challenged. In this matter, we maintained that the claim had been correctly calculated and resisted attempts to reduce recovery by reference to proportionality arguments.
The result was a 100% recovery of both the repair costs and the full loss of use claim.
This case is a useful reminder that Loss of Use does not have to be proportionate to repairs—it only has to be properly calculated.
Working with us
If you’re interested in discussing whether your business could be owed for Loss of Use, please don’t hesitate to contact our team today. Being specialists in ULR, we understand the reach of the impact caused when a vehicle is unable to be used as usual, and how this can affect the profitability of a business. This is why we’re dedicated to making sure every opportunity for loss recovery is explored thoroughly.
Contact our team today if you wish to discuss how we could help your business. Call us free on 03300 945 100.
Author: Aneeka Begum