COLES AND OTHERS V HETHERTON AND OTHERS

[2013] EWCA Civ 1704, Court of Appeal, Lord Justice Moore-Bick, Lord Justice Aikens and Lord Justice Vos, 20 December 2013

Insurance (motor) - Damaged vehicle - Measure of damages - Subrogation - Significance of insurer??A?A?s conduct in arranging repairs

RSAI issued motor policies covering both first and third party losses. In the event of damage to an insured vehicle which could be repaired for less than the market value of the vehicle, the policy provided that the assured could choose a repairer or elect to use RSAI system. Under that system RSAI would engage MRNM, a member of the RSA Group, to undertake repairs. Those repairs would be effected at one of MRNM's six regional repair centres (QRCs) or contracted out to independent garages. MRNM and repairers in its Priority Repair Network (PRN repairers) were required to maintain minimum service standards, including a delivery and collection service and a courtesy car. The amounts charged by MRNM allowed it to make a profit over and above the charges paid by it to PRN repairers. The defendants' insurers contended the arrangements increased costs and amounted to a failure to mitigate loss.