I fly with a mate from work who has his own aircraft. Now, I fly the aircraft whilst wearing a hood under IFR in VMC. Previously, we have agreed that matey sitting next to me, although he will not handle the controls, is PIC. He is responsible for seperation from other aircraft which may be VFR. Now, as far as I am concerned I am PIC and I do not care what he chooses to record in his logbook. He is, by the way, an American. So I am happy that I have acted as PIC in accordance with the spirit of the JAA regulations and he has recorded in accordance with FARs. Now, although under IFR I am still obliged to maintain seperation from aircraft operating under VFR so whilst wearing the hood I require another competent pilot in the cockpit.
I would not adocate two pilots with JAA licences hiring an aircraft between them but in the example I've outlined above I am comfortable with my logbook entries. If my American colleague wishes to log the time even though he never touches the controls then that is up to him.