87% Saving on a £115,894 Credit Hire Claim: Why Challenging CHO Conduct Matters

The war of attrition, as it has long been referred to, between credit hire companies and insurers continues to persist in the world of motor claims. But every so often a case comes along that perfectly illustrates how robust challenge – grounded in evidence, conduct and legal principle – can cut through even the most ambitious claim.

Recently, a £115,894.87 motorcycle hire claim was reduced to £15,000, delivering a saving of £100,894.87 (87%) for our client. The case offers valuable lessons for anyone handling credit hire litigation, particularly where Credit Hire Organisation (CHO) behaviour contributes to unnecessary delay.

The Case in Brief

The claim involved 271 days of motorcycle hire. The CHO obtained a repair estimate just 13 days into hire but then insisted the defendant arrange their own inspection. When the defendant’s estimate was produced, the CHO reversed course and insisted repairs proceed on their estimate instead.

They also refused to release the motorcycle until all repair costs, including a £55 shortfall, were paid – a stance that prolonged the hire even further.

The CHO’s conduct was challenged as:

• self‑serving, and to such an extent that the chain of causation was broken;
• contrary to the claimant’s best interests (particularly relevant for FCA‑regulated CHOs); and
• the CHO was conflicted by their own financial interest and the duty of the Claimant to mitigate his/her loss.

The CHO also claimed £70 + VAT per day for Collision Damage Waiver (CDW), totalling £18,970 + VAT across the 271-day hire period, despite the excess being only £2,500 (if ever incurred). This was challenged as disproportionate under McBride/Clayton v UKI [2017] EWCA Civ 144.

To compound matters, impecuniosity was not advanced, meaning the claimant could reasonably have funded repairs themselves – opening the entire hire duration to challenge.

Key Lessons for Practitioners

1. Scrutinise & Challenge CHO Conduct

Identify and challenge behaviour that prolongs hire, conflicts with the claimant’s interests, or appears commercially motivated.

2. Treat CDW as a Separate, Reasonableness‑Based Head of Loss

Assess CDW against the excess. Large disparities between the two negate recoverability as a general rule.

3. Use the Absence of Impecuniosity to Limit Duration

If impecuniosity isn’t advanced, the claimant is expected to fund repairs – making extended hire periods vulnerable.

Final Thought

This case is a reminder that credit hire claims are not simply about rates and duration – they are about conduct, reasonableness, and causation. When CHOs act in ways that prolong hire or prioritise their own commercial interests, those behaviours must be exposed and challenged.

Doing so doesn’t just reduce claims costs – it protects claimants from being used as vehicles (no pun intended!) for profit.

Mohammed Saddique - Large Loss Handler, Keoghs Motor Corporate Risk