Considerations before commencing litigation for property damage

Contributed by ChristianFoyle and current to 27 July 2018

Recovery of money - financial position of the other party

If a person finds that the other vehicle involved in the accident was not insured he or she should try to find out whether the party responsible for the accident is in a financial situation that would allow them to pay for the repairs to the vehicle. There is nothing to be gained by incurring legal costs to obtain a judgment in court against a defendant who is simply unable to pay. In enforcing a judgment, it is important to know that the court will often allow a Defendant who is found liable to pay, time to pay through a mechanism called a means enquiry, for example the court may order that the Defendant pays the person bringing the claim $100.00 a week.

Legal costs - if not insured

It is important to realise that if a claim is bought as a Minor Case Claim (a claim where the value of the debt or damages claimed does not exceed $10,000) in the Magistrates Court then there is not an entitlement to be legally represented and there is no entitlement to legal costs if the person bringing the claim is successful.

If a person decides to sue for damages, the legal costs must be considered. It is possible for the claimant to handle all or part of such a claim themselves to minimise costs, but it is often not advisable.

If a person instructs a lawyer to handle the claim, the legal costs recoverable from the defendant, if successful, may be insufficient to cover the cost of the actual legal fees charged. It is also possible that while a claimant may obtain a court order for the defendant to pay the cost of the damage and the legal costs, those costs may remain unpaid because the defendant is unable to pay, or may be paid over a long period of time at a fortnightly rate (for example).

The legal costs in recovering the money and the period over which the payments are made may ultimately make the recovery uneconomic. It is unlikely that a Legal Aid lawyer would be appointed to recover damages in relation to a motor vehicle accident unless the circumstances are exceptional, although some assistance with regard to advice may be obtained.

Which party was at fault?

Many motor vehicle accidents involve a relatively uncomplicated set of facts. A very common scenario is that a first car is stationary at a set of traffic lights when they are struck from behind by a second vehicle. In this scenario the first driver appears to be blameless and the second driver will be at fault (negligent).

In motor vehicle accident injury claims the Insurance Commission of Western Australia as the compulsory third party injury insurer in Western Australia often simplifies the process by investigating into the circumstances of the accident and providing notice as to whether it considers one or more drivers have been negligent.

Deciding whether or not another driver was at fault (negligent) is sometimes quite difficult. Some common negligence related scenarios are as follows:

1. Clearly a driver who is drunk while in charge of a motor vehicle is driving negligently if, due to his or her drunkenness, an accident occurs.
2. A vehicle being driven at a speed above the speed limit is probably being driven negligently but the fact that a vehicle is being driver above the speed limit is usually dependant on the observations of witnesses who provide their subjective assessment of the speed of the motor vehicle with no objective basis to substantiate those views.
3. Failing to stop at a red light, give way sign or stop sign is also negligent driving.

If a person is in doubt as to whether the other driver was negligent, he or she should seek legal advice. In many cases, more than one driver in an accident may be at fault. In such a case, a court has power to apportion (share) the liability between the parties according to the degree of each party’s responsibility for the accident.

Where one party bears part of the responsibility for an accident, that party is said to have been contributory negligent. Contributory negligence almost invariably occurs at an uncontrolled intersection where, for example, the driver on a priority road (who has the right of way) may be held 15% responsible for the accident. This is because every driver is supposed to drive in a manner so as to be able to avoid an accident, even when he or she has the right of way.

In some cases a person may recover 100% of damages (such as where a car was parked at the side of the road and was hit by another car, or where the car was stationary at a traffic light and struck from behind) but the possibility of apportionment must always be considered.

In a motor vehicle accident injury claim the solicitors acting for the Defendant will ordinarily plead voluntary assumption of risk and contributory negligence, and set out particulars, in the event that they allege that the Plaintiff is liable.

Repair costs of the other vehicle

It is possible that a person will have to pay a share of the other party’s damages even if that other party is mostly responsible for the accident. If the damage (cost of repairs) of the other driver is much greater, this can have the effect of cancelling out any benefit in pursuing that other driver for a person’s own damages.

Before deciding whether to proceed with court action against the other party it is necessary to compare the costs of a person’s repairs with the excess and loss of any potential no claim bonus, the legal costs and the cost of repairs to the other vehicle.

Third party property insurance

In deciding what action to take if a person has third party property insurance, all of the above considerations apply, except for the cost of repairs to the other vehicle. There is nothing to stop a claimant from proceeding with a claim for damages, and when faced with a counterclaim for the other vehicle repairs, having the insurance company defend that action. The insurance company must of course be notified of the accident and that a claim will be made against them by the other driver. It is still necessary to consider the amount of damages sought compared to the likely legal costs.

If uninsured

In this case, a person has only two choices:

• sue the other party for the cost of the repairs; or
• pay for the repairs themselves.

In deciding which of these two alternatives to take, consideration should be given to factors such as the amount of damage to each vehicle, who was at fault in the accident and whether or not the other driver could afford to pay the amount of damages.

Write-offs

Sometimes a vehicle will be so severely damaged that the repair cost will exceed the market value of the vehicle, so it will be uneconomical to repair (called a write-off). In such cases a person is only able to claim the pre-accident value of the vehicle (market value) less the wrecking value. A person must be able to prove the current market value of the vehicle at the time of the collision, and this is usually proved by a certificate of valuation from a repairer who inspected the vehicle, or a certificate from some other qualified person such as an RAC officer.