Broker Successfully Recovers Against Car Dealer
We successfully assisted our client in obtaining judgment against a car dealer following a vehicle rejection by a consumer. Despite the car dealer having disputed the proceedings, judgment was entered at a small claims final hearing and costs were awarded over and above usual fixed fees.
We were instructed by a leading vehicle finance broker in relation to a transaction they had entered into with a car dealer. A consumer had financed a vehicle via our client. Issues with the vehicle’s engine developed outside of the 30-day rejection period.
Our client obtained an expert’s report confirming that the vehicle was suffering with issues that on the balance of probabilities would have been present at the point of sale. Accordingly, our client believed the customer should be entitled to repairs.
The second-hand car dealer was not willing to engage in settlement discussions and so the customer was refunded, and the finance unwound.
Pursuant to an indemnity given by the car dealer our client sought to recover its losses.
Matters at issue
The car dealer disputed matters on the following grounds:
- It was not prepared to accept the findings of the expert report;
- The fault could not have been at point of sale due to the distance covered; and
- The customer had agreed terms with the car dealer that deductions would be £1 per mile.
Despite attempts to resolve the matter on commercial terms, the matter proceeded to a small claims final hearing.
At the final hearing the judge found that the dealer was bound by the indemnity and the conclusion of the report. The judge was not prepared to entertain the £1 deductions argument as the customer was not a party to the contract between our client and the car dealer. This being a point we had tried to explain in correspondence and at small claims mediation.
Accordingly, judgment was entered for the sum claimed plus interest and costs.
The judge also accepted our argument that whilst the matter had been allocated to the small claim track costs should be assessed pursuant to the indemnity relying on the authority of Chaplair Ltd v Kumari  EWCA Civ 798. Accordingly, the judge went on to summarily assess costs.
This was a very positive outcome for the client especially due to the costs award. Often small debts are not litigated due to the risk that costs will not be recoverable, but we will always look for ways around the usual rule.