Glasgow Sheriff Court, in the case of Annas El-Kihel v Santander Consumer Finance [2026] SC GLA 16, recently considered whether any deduction in sums to be returned to consumers should be made for use of a car when the car is ultimately rejected by the consumer. In this article, Debbie Brogan, Legal Director in MFMac’s Litigation & Dispute Resolution team and an accredited specialist in Debt and Asset Recovery, discusses the court’s decision and highlights the key takeaways for practitioners in this area.
The facts
The hirer entered into a finance agreement with Santander Consumer Finance ("Santander") in 2021 for the supply of a car and took delivery of the car in June 2021. At delivery, the mileage was 22,700 miles. Prior to the agreement between the hirer and Santander, the car had been involved in a road accident in which the driver's side airbag had been deployed. The airbag was not replaced and instead a resistor was inserted into the car's electrical circuitry. The car therefore did not have a functioning driver's side airbag when it was delivered to the hirer or when the car was subsequently used by the hirer.
The hirer had concerns about the safety of the car shortly after taking delivery, though it could be driven and was roadworthy. The hirer refused an offer from Santander to repair the car and instead rejected the car on 11 July 2022. On 26 September 2022, Santander accepted the hirer's rejection of the car and the car was collected. The car had been driven for approximately 9,572 miles between the date it was delivered to the hirer and the date it was collected.
Following rejection, Santander paid the hirer £10,550.40, being payment of everything the hirer had paid in terms of the agreement less the sum of £5,100 as a deduction for the hirer's use of the car. Santander calculated that sum by applying a daily rate of £15 in respect of 340 days of use. Santander also paid the hirer £1,636.18 as general compensation for inconvenience, the cost of an expert report and a contribution towards repair costs for the car.
The hirer thereafter raised a court action against Santander seeking:
- An order from the court (declarator) confirming that the hirer was entitled to reject the car
- Payment from Santander of £5,100, being the sum deducted to take into account use of the car
- Payment of £1,000 for general inconvenience
The issues before the court were:
- Whether the hirer was entitled to the order sought
- Whether Santander was entitled to deduct anything for the hirer's use of the car and, if so, what the amount should be
- What, if any, sum should be awarded for inconvenience
An evidential hearing took place. Both parties referred to the Consumer Rights Act 2015 ("the 2015 Act"), particularly sections 24(8) and 58(5), which provide that where the consumer exercises the final right to reject, any refund may be reduced by a deduction for use.
The hirer’s primary position was that there should be no deduction. If any deduction was made, the amount applied by Santander was excessive. Santander argued the deduction was fair.
Prior to this decision, there was no reported Scottish authority on deduction for use where the final right to reject is exercised. A recent Inner House decision, King v Black Horse Limited, confirmed that a consumer may continue to use goods after exercising the right to reject and that any continued use may justify a deduction if it is "justified by the whole circumstances".
The court confirmed:
- Whether to allow a deduction is a matter of judicial discretion
- Discretion must be exercised in light of the whole circumstances
- The daily rate used for calculating any deduction should reflect the contractual daily rate
- The deduction should reflect the benefit derived from use of the vehicle
Declarator
The court rejected the hirer’s request for declarator as Santander had already accepted the rejection. There was no live issue requiring an order.
Deduction for use in this case
In assessing deduction, the court considered the car’s condition, the previous accident and the missing driver's side airbag. Both experts gave evidence, though neither had inspected the car. The court found the car was "less safe to drive as a result of the missing driver's curtain airbag" and that there was insufficient evidence that poor quality repairs affected safety.
The court also considered the hirer’s use, including the mileage incurred. The hirer's evidence that the car was extremely unsafe was inconsistent with their continued use. The court was not persuaded that the condition of the car materially affected how it was used.
Santander relied on the contractual daily rate of £22.92, reducing it to £15 to account for the missing airbag. The 340 day period was accepted as reasonable.
The court determined that the daily rate should be reduced further by 50%. The resulting deduction was £3,896.40. Santander had deducted £5,100, so the hirer was due £1,203.60, which the court ordered Santander to pay.
The court held that the £500 already paid for inconvenience was adequate. The hirer had not provided evidence of actual costs or a clear timeframe of inconvenience.
Lessons learned
The key point is that a deduction for use may apply even where a vehicle is ultimately rejected, and the amount depends on the full circumstances.
Wider takeaways for practitioners include:
- Only seek declarator where a live and practical issue remains
- Ensure written pleadings specifically reference matters witnesses will address
- Ensure witnesses can speak to any documents relied on
- Provide sufficient evidence for any inconvenience claim; unsupported claims may be restricted or refused
This case provides useful Scottish authority on deductions for use and highlights the importance of alignment between pleadings, witness evidence and expert analysis.
If you require advice on applying deductions for use or handling consumer rejection claims, please contact our Litigation & Dispute Resolution team.
