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What to Claim for Loss of Use

24th April 1959, Page 64
24th April 1959
Page 64
Page 67
Page 64, 24th April 1959 — What to Claim for Loss of Use
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Which of the following most accurately describes the problem?

AN operator reports that his 44-seat bus costing nearly 0,000 was so badly damaged in an accident that "we decided it must_ he returned to the builders." The insurers, he claims, are now " quibbling " about a charge of 1 s, 6d. per mile for its delivery and collection, involving a journey of more than 200 miles. In this instance the operator states that the third party was to blame, and yet in a previous bad accident, for which his own driver was at fault, the insurers had without question paid the claim, including the mileage charged.

He also asks for advice on making a claim for loss of use and whether this could include the cost of a replacement vehicle. Additionally, he inquires whether third parties can demand proof of any or all of the figures presented under claims for loss of use.

At the outset it must be stated that the general principles applying here, as for any other claim, are governed both by the terms of the operator's policy and the law of equity. The oft-repeated advice" read your policy "—is both valid and pertinent.

Many policies include a clause to the effect that all reasonable costs involved in protecting and removing a vehicle to the nearest competent repairers will be covered, and equity demands that persons so indemnified should do only what they would normally have done if not insured. Admittedly, the term " reasonable " and "nearest competent repairer" may be points on which the courts may have to decide, put it would seem both fair and prudent that operators should first approach their insurance companies and come to some mutual agreement before deciding to send damaged vehicles to other than the nearest repairers.

If the reader's expression, "we decided," does, in fact, mean that operator and insurance company reached prior agreement on this point, it Would appear that his claim for delivery . charges is in order. If this assurimtion is incorrect, the onus of proving that the return of the vehicle to the manufacturers was reasonable would be on the policy-holder.

Incidentally, whilst the cost of removal of a damaged vehicle to the repairer is usually covered in the terms of a policy, it is less common for charges for its return to be specified. The third party could demand proof of any loss claimed (for example, whether a replacement vehicle was, in fact, hired) or the average earnings of a damaged vehicle over a period comparable with that when it was off the road through accident When assessing a claim for loss of use as the result of an accident, five items of cost relative to the period under review have to be considered. They are: (l) Total expected earnings and (2) establishment costs for that period; (3) standing costs. exclusive of wages; (4) wages; (5) running costs. Expenditure on establishment and standing costs continues to be, incurred while a vehicle is under repair and should be included' in the claim.

As regards wages, a claim for this item could vary according to individual circumstances. In some instances, it may be possible to put the driver to• useful work while the vehicle is off the road, in which case his wages could not be included. Where this does not .apply and the employment situation generally does not permit staff being stood off, it will be . reasonable to include the cost of the driver's basic pay.

Presumably,' all running .costs would be saved while the vehicle was under repair. The claim would, therefore, comprise the total estimated earnings while the vehicle was off the road (based on actual earnings over a comparable period), less the appropriate running costs, and possibly wages. Alternatively, if a replacement vehicle is hired, so that standard revenue continues to be earned, the amount due to the operator for loss of use would be the balance left after deducting the estimated running costs of his own vehicle (which would not be incurred while under repair) from the total hire charge for the same period.

IN an accident at a railway crossing, an operator's vehicle has been so badly damaged that it will be off the road for some months. He says he has come to an arrangement with the local agents by which they will hire a replacement 7-ton oiler to him " as a chattel," the reader bearing all other operating costs. He asks for guidance in formulating a fair hire charge.

Despite the removal of purchase fax from commercialvehicle chassis and the effect on operating costs as detailed in The Commercial Motor on April 10, it would be unlikely, that a new vehicle would be supplied for this purpose. The cost, as shown in the current edition of "'The Commercial Motor' Tables of Operating Costs" would, therefore, still be applicable.

The standing cost in respect of interest on the initial outlay for this particular vehicle is shown as El Is. per week, whilst depreciation is reckoned at 3.15d. per mile. Assuming the lorry averages 750 miles per week, the cost of depreciation would amount to £9 16s. lid. If the reader is, in fact, responsible for the remaining eight items of operating costs— licences, wages, rent and rates, vehicle insurance, fuel, lubricants, tyres and maintenance—the cost to the agents when supplying the vehicle would be £10 17s. I Id., making the charge £13 Is. 6d, if a profit margin of 2014r cent. is accepted as reasonable.

ANORTHERN ancillary user has a lighting. problem. He is shortly putting on the road a tractor unit and van semitrailer for transporting paper throughout the country. Various forms of rear lighting are under review and the following arrangements have been suggested: Two red rear lights; two independent stop lights; two flashing direction indicators and two reflectors, with the addition of two red rear lights at the top of the vehicle (approximately 11 ft. from the ground) and two mid-way. He asks what are the regulations governing rear lights and the position in which they may be fitted.

The position of obligatory rear lamps is set out in the first schedule to the Road Vehicles Lighting Regulations, 1954. On goods vehicles or goods-carrying trailers two rear lamps are, of course, required, one on each side of the longitudinal axis, and they must be at least 21 in. apart and no part of the vehicle or its equipment should extend laterally beyond the lamp more than 2 ft. 6 in. In addition, the two lamps should not be more than 3 ft. 6 in. from the rear of the vehicle, nor more than that distance, or less than 15 in., from the ground.

The requirements regarding obligatory reflectors stipulate that the longitudinal position shall be not more than 2 ft. 6 in. from the extreme rear of the vehicle, whilst the maximum height from the ground is 4 ft. 6 in., and the minimum, 1 ft. 3 in. The height from the ground of the highest part of the illuminated area of each lamp or the reflecting area of each reflector shall be the same.

So long as the regulations are met as regards the obligatory rear lamps or reflectors, there would appear to be no restriction on the number of additional lights, provided that they are not white.

Although not specifically referred to in the reader's letter, number-plate lighting could also be involved in the arrangement under consideration. The rear number plate must be illuminated to enable every letter and figure to be easily distinguishable up to a distance of 60 ft.

WRITING from a Hertfordshire village, a reader states that he had just purchased a van with side windows in which he proposes to carry wood, as well as using it for social

purposes, and asks how it must be licensed and how this would be affected if the wood carried was for sale.

Assuming that the vehicle comes within the definition of a motor vehicle constructed or adapted for the carriage of goods, which is presumably the case, it will be termed a "goods vehicle" for the purpose of the Road and Rail Traffic Act, 1933. It would then be an offence to use it on the road to carry goods, whether for hire or reward or in connection with any trade or business, except under a carrier's licence. If, as appears to be the case, the timber would be carried in connection with the reader's business, a C licence would be needed.

Apart from the legal aspect of licensing goods and dualpurpose vehicles, owners would be well advised to ensure that their insurance policies cover all the uses to which they propose to put their vehicles. Failure to do this could result in their being liable, either to a fine of £50 or three months' imprisonment for using, or permitting the use of, an uninsured vehicle, as well as payment to a third party of -heavy damages out of their own pockets because their insurers had rightly repudiated liability on the grounds that the vehicle was being used for purposes not included in the terms of the policy.

WHAT are the rates of pay for drivers engaged on local delivery of oil in bulk to shops, garages and farms with C-licence vehicles, a west-country reader asks.

Whilst there are no statutory obligations on C-licence holders to pay their drivers standard rates of pay, all such workers have the right to complain to the Minister of Labour if they consider their wages unfair. As one of the standards by which these might be judged unfair could be the rate paid for similar work done by drivers of Aand B-licence vehicles, the wages Of C-licence drivers tend to be comparable.

, As decreed by R.H.(64), the standard rate of pay for adult drivers of vehicles operating in grade 2 areas and with a carrying capacity over 1 ton and up to 5 tons is £7 19s. for a 44-hour week.

Another aspect which operators in this class of business may have to consider is the 'rate of pay made to drivers by petrol companies engaged on similar work. This may consist of a higher basic weekly wage, without overtime payment but plus commission on gallonage sold. The actual amount of the basic wage and the rate of commission varies as between the petrol companies concerned and relative to the area

covered. S.B.

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