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On 8 December 2021 the High Court handed down a unanimous judgment in two joined appeals about hire cars. Neither case involved a supercar or a dramatic injury. One man drove an Audi A3 and the other a BMW 535i. The decision nevertheless reshaped how every replacement vehicle claim in Australia is argued, and it did so mostly by removing an argument insurers had relied on for years.
Car off the road and not at fault?
Tell us what you were driving and we will tell you what we run that is broadly equivalent.
The Two Cases
The appeals were heard together because they raised the same question. Both claimants had been
in collisions, and in both the at-fault drivers' insurers had already accepted liability. The
only live issue was money: specifically, how much of the hire car bill the at-fault side had to pay.
Rixon
Mr Rixon's Audi A3 was damaged. While it was repaired he hired a replacement Audi A3 through
a credit hire company, meaning he paid nothing upfront and the hire company looked to the at-fault
insurer for payment.
Cassim
Mr Cassim's BMW 535i was damaged. He hired a Nissan Infiniti Q50, again through a credit hire
company. Note that he did not hire another BMW. He hired something in the same general class.
What the insurers argued
The insurers' position was straightforward and, on its face, reasonable. A car is transport.
These men needed to get from one place to another. A cheaper vehicle would have achieved that.
Paying for a prestige replacement was therefore not a reasonable cost, and the excess should not
be recoverable.
Underlying this was a longstanding argument that a claimant had to demonstrate a
need for a replacement vehicle at all, and that need meant functional transport rather
than an equivalent car.
What the Court Decided
The High Court dismissed the appeals unanimously. A person deprived of their vehicle by
another's negligence is entitled to the reasonable cost of hiring a broadly comparable or
equivalent vehicle.
The reasoning turned on how the loss is described
The Court held that the familiar phrase "loss of use" is inadequate terminology. It frames the
loss as purely functional, which then makes it easy to argue that any functioning car cures it.
The Court identified the correct heads of damage as physical inconvenience and
loss of amenity.
Physical inconvenience is the practical disruption of not having your car. Loss of amenity is
the loss of the enjoyment and benefit you derive from the particular car you chose and paid for.
Once the second head is recognised, the insurers' argument largely collapses: a base model
addresses the inconvenience but does not address the amenity.
"Need" was removed from the analysis
This is the most consequential part of the judgment. The Court held that the concept of need
"was a distraction from the proper focus". A claimant does not have to prove they needed a car.
The relevant question is whether they were deprived of one, and what it reasonably cost to
address that deprivation.
In practice this closed down a whole line of cross-examination. Before this decision, a
claimant could expect questions about whether they worked from home, whether their partner had a
car, whether public transport was available. Those questions largely stopped mattering.
The onus shifted to the defendant
The Court held that once a claimant has hired a replacement, the burden falls on the defendant
to prove that the claimant's conduct was unreasonable. It is not for the claimant to justify the
hire in advance. This changes the practical dynamic of a dispute considerably, because the party
bearing the onus is the party that has to assemble evidence.
What Insurers Can Still Argue
It would be wrong to read this decision as a blank cheque, and anyone presenting it that way
is overselling it. The Court left three battlegrounds open.
Rate
The cost per day of the hire remains contestable. A rate significantly above the market for an
equivalent vehicle invites a challenge, and credit hire rates are frequently higher than
retail rates, which is precisely where a lot of the argument now sits.
Duration
How long the hire reasonably ran is contestable. Delays caused by the insurer or by parts
supply are ordinarily not held against a claimant. Unexplained delay attributable to the claimant
is a different matter.
Comparability
Whether the replacement was genuinely comparable remains contestable, and the Court did not
define a precise threshold. "Broadly comparable" is doing real work in the judgment and it is
where most modern disputes are fought. Note that Mr Cassim's BMW was replaced with an Infiniti,
which the Court did not disturb, so exact make-for-make matching is plainly not required.
The Circumstances Where the Entitlement May Not Arise
The Court acknowledged that there are situations where damages of this kind would not follow.
If the claimant was overseas for the entire repair period, or in hospital, or is a business with
idle fleet vehicles that could simply have been used, then the physical inconvenience and loss of
amenity the damages address did not really occur.
These are narrow exceptions rather than general defences, but they exist and they are worth
knowing about before assuming any claim will succeed.
Why This Matters More the More Your Car Is Worth
The claimants here drove an Audi A3 and a BMW 535i. These are good cars, not exotic ones. The
reasoning is not limited to that price bracket, and it applies at least as forcefully further up
the range, where the gap between the damaged vehicle and the substitute typically offered by an
insurer is far wider.
If you were driving a Range Rover and the offer that arrives is a small hatchback, the
authority for saying that is not obviously an equivalent vehicle is this case. Whether a
particular substitution is reasonable still depends on the facts, which is why the practical
advice remains to get proper advice rather than to rely on a general principle.
What the Decision Did Not Do
Cases like this get summarised badly, and it is worth being clear about the limits so nobody
walks into a claim with the wrong expectation.
It did not create a right to a free car
The entitlement is to damages for a loss caused by someone else's negligence. If liability is
genuinely contested, none of this is engaged until fault is resolved. A disputed-liability
accident is a different problem with a different answer.
It did not set a rate
Nothing in the judgment fixes a daily figure or endorses credit hire pricing. It decides what
category of vehicle is recoverable, not what may be charged for it. Rate disputes have arguably
become more common since, not less, because that is where the argument moved.
It did not define comparable
The Court used the phrase "broadly comparable or equivalent" and left the application of it to
the facts of each case. Anyone quoting you a rule such as "same segment" or "within twenty per
cent of value" is describing a convention, not the law.
It did not change who you claim against
The claim still runs against the at-fault driver, in practice their insurer. If that driver is
uninsured, your position is unchanged in principle and considerably harder in practice, because
you are pursuing an individual rather than an insurer.
How to Use This If You Are In It
Three practical points follow from the judgment rather than from anything we have invented.
First, the offer from an insurer is a starting position, not a statement of your entitlement.
Second, you are not obliged to justify why you needed a car at all. Third, keep documentation of
the repair timeline, because duration is one of the three things still genuinely in play and it
is decided on paper.
If the replacement vehicle is booked
We never move you down a tier. If your dates are taken, these are the luxury cars we will offer instead, and we will tell you plainly if none of them is free rather than substituting something lesser on the day.
Range Rover Sport
- 294kW
- 5.9s
- AWD
- 5 seats
The kind of broadly comparable replacement the principle contemplates when the damaged car was a prestige SUV.
Mercedes-Benz GLS
- 243kW
- 6.3s
- AWD
- 7 seats
Seven seats, for when the car off the road was the family vehicle and a hatchback genuinely will not do the job.
Need a like-for-like replacement?
Send us the make, model and year of the damaged car and we will give you a straight answer about what matches it.
General information only. Every claim turns on its own facts.
Frequently Asked Questions
What is Arsalan v Rixon about?
Two joined appeals decided by the High Court on 8 December 2021 concerning how much of a replacement hire car bill an at-fault driver's insurer must pay. The Court held unanimously that a not-at-fault owner is entitled to the reasonable cost of a broadly comparable or equivalent vehicle.
What cars were involved?
Mr Rixon's Audi A3 was damaged and he hired a replacement Audi A3. Mr Cassim's BMW 535i was damaged and he hired a Nissan Infiniti Q50. Both hired through credit hire companies, and liability had been accepted in both cases.
Did the Court say I must get the identical make and model?
No. Mr Cassim's BMW was replaced with an Infiniti and the Court did not disturb that. The test is broad comparability, not make-for-make matching.
Why does the Court's wording about loss of use matter?
Because framing the loss as purely functional makes it easy to argue any working car cures it. The Court identified the correct heads as physical inconvenience and loss of amenity. The amenity limb is what supports an equivalent rather than merely adequate replacement.
Do I still have to prove I needed a car?
No. The Court held the concept of need was a distraction from the proper focus. Questions about whether you work from home or whether your partner has a car largely stopped being relevant after this decision.
What can the insurer still challenge?
The rate charged, the duration of the hire, and whether the replacement was genuinely comparable. The Court did not define a precise threshold for broadly comparable, which is where most disputes now sit.
Are there cases where I would get nothing?
The Court acknowledged narrow exceptions, such as being overseas or hospitalised for the whole period, or being a business with idle fleet vehicles available. In those situations the loss the damages address has not really been suffered.
Does this decision apply outside New South Wales?
It is a decision of the High Court of Australia, so the principles bind courts throughout the country rather than New South Wales alone. Both appeals happened to come from New South Wales, but the reasoning about physical inconvenience, loss of amenity and the irrelevance of proving need is not confined to that state.
Is this legal advice?
No. This is general information about how replacement vehicle claims usually work in New South Wales. It does not take account of your circumstances and no solicitor-client relationship arises from reading it. For advice on your own claim, speak to a solicitor.
Does Drive Tribe run my claim?
No. We are a vehicle hire business. What we can do is supply a broadly equivalent replacement from a prestige fleet, and tell you honestly whether what we have is a reasonable match for what you were driving.