Savings Can Be Made on Credit Hire Costs, Case Report Here

Credit Hire is like UK government borrowing; things can escalate very easily unless some rigour is applied to auditing. Here’s the word on a case where a claim was significantly reduced after crucial details were checked;

AND-E (Aioi Nissay Dowa Insurance Europe), working with Keoghs, has secured a significant saving on a credit hire claim that illustrates the lack of consumer understanding of the credit hire process.  The case of Wiltshire vs AND-E saw the claim for credit hire reduced from £48,000 to £1,175. 

As Jan Martin, Head of Third Party Claims at AND-E, explained, the company believed it was important to defend the claim to ensure that the credit hire sector applies costs fairly for insurers and policyholders.

“The case of Wiltshire vs AND-E illustrates how policyholders can be misled in the credit hire process.  We felt it was critical to send a clear message on behalf of the insurance sector that unfounded credit hire claims will be challenged for the benefit of policyholders. In particular, we wanted to highlight the broader issues around the way litigation is all too often run by the commercial credit hire entity stood behind an individual claimant.”

Following an accident on 9^th May 2023, the claimant, while believing he was talking directly to his insurer, entered into an agreement with an independent solicitors and credit hire organisation. The credit hire agreements were not signed until over a month after the hire commenced and were also drawn up in the wrong name.

A claim was subsequently brought against the insurer by the independent solicitors seeking a total of £50,190.24, primarily for credit hire charges of £47,925.60, plus recovery, storage, and delivery/collection fees.

At trial, Keoghs and AND-E highlighted the significant discrepancies between the claimant’s oral evidence and his written witness statement that appeared to be in a standard templated prepared by his solicitors. This included the fact the claimant believed he was dealing with his insurer, his lack of understanding of the credit hire arrangement, and the fact that he wasn’t informed of the solicitors’ financial interest in the hire company or offered alternatives; all of which was in direct conflict with the contents of his witness statement.

Ultimately, District Judge Lumb ruled that the credit hire, recovery, and storage agreements were all unenforceable. This was due to the significant delay in signing the credit hire agreement, the fact that documentation was initially sent to the wrong person, and the claimant’s lack of informed consent at the outset, given that he believed he was dealing with his own insurer.

Gary Herring, Head of Credit Hire at Keoghs added: “This is another example of an all-too-common feature of modern credit hire litigation, of self-serving evidence being put forward to suit the interests of the hire company, irrespective of its truth. Far from being a triviality, this is a serious issue which we are pleased has been highlighted so starkly by DJ Lumb. The irony is that these are the same commercial organisations who continue to attempt to evade costs consequences of unsuccessful litigation, arguing that they are not the ‘real party’. We hope that this judgment prompts a swift change of approach by this particular organisation, as well as serving as a warning to similar entities.”