Vehicle Diminution (loss in value) occurs when a car is damaged in a collision and has therefore had some of its value diminished.
As a result, regardless of condition of the car after it is repaired there is still a perceived loss of value to the vehicle.
Diminution has been acknowledged in law for several decades. In 1974, the Court of Appeal recognised that when a buyer is considering two cars which are otherwise identical, but one of them has had some repair work done – that buyer is likely to select the car which has had no compromises, or at least expect a lower price for the car which has had repairs.
Payton –v– Brooks (1974) was heard in the Court of Appeal, and it set out that a claim can be brought for Diminution due to the need for a vehicle to have repair work done after an accident.
The logic being that if the overall cost of the vehicle repairs does not cover the financial loss to the owner, there is no reason why the owner should be denied additional compensation under that head of damage.
On a similar note, Coles –v– Hetherton (2013) recognised that financial loss to a vehicle owner is realised upon damage to the vehicle. This loss is not just from the cost of the repairs, it is Diminution.
Covering the price of repairs to reinstate the vehicle to its original condition is merely a contribution towards the Diminution. The Courts can award a sum of compensation exceeding the cost of the vehicle repairs if it deemed to be justified.
Why would I need a solicitor?
Even though Vehicle Diminution has been legally acknowledged since the 1970s, it is a niche and often misunderstood area.
Insurers know the impact that an influx of claims would have on them financially if everyone who was eligible to claim compensation did so. Therefore, they will try to avoid having to make a settlement wherever possible. This can cause extreme difficult and stress for unrepresented diminution Claimants, which is why legal representation is often wise.
Further reading
Vehicle Diminution – Oakwood Solicitors
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Rob Crompton joined Oakwood Solicitors in July 2007 as a Road Traffic Accident Paralegal Fee Earner. Rob has progressed through the organisation and holds the current position of Head of Personal Inj…
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