Credit hire in the portal

Melanie Mooney looks at the issues that are becoming increasingly visible on claims submitted to the Portal process that include credit hire.

There has been a lot of noise recently about credit hire within the Protocol for the low value personal injury claims process, “The Portal”. This however is not news to me, having first started to look at the problem around this time last year.

Mark Sanderson and I examined it in more detail following the hearing of a set of four conjoined appeals, led by a case called Mulholland v Hughes.

In that case, the need to hire had not been raised as an issue by the insurer concerned at Stage 2 of the process, however the claim was ejected from the Portal process by a Judge who felt he needed to hear from the claimant on the issue of need.

That decision was appealed by the claimant and was ultimately successful on the basis that a Stage 2 response was akin to a Defence and therefore if something was not put in issue it was deemed conceded.

I felt that this decision was harsh on the defendants. How can it be for the defendant to remind the claimant to prove something where the burden of proving it (in this case, the need to hire) rests with them?

When considering whether to appeal we started to look at whether there was a “better” way of handling credit hire in the Portal which would avoid the need and inherent risk associated with an appeal.

What we discovered was pretty astonishing. The Portal was never meant for credit hire handling, with the main focus being settlement of the low value personal injury element. As credit hire is classed as vehicle related damage (VRD) the value is disregarded for the purpose of the value of the claim and therefore whether it should remain within the Portal. What this means in practical terms is, for example, you can have a £1,500 injury claim and a £100,000 credit hire claim all working their way through to a 20 minute Stage 3 hearing.

With the focus having been on settlement of the injury claim and therefore insufficient arguments being raised on the credit hire in Stage 2 of the process, credit hire organisations were recovering 100% of the hire (at commercial rates) virtually 100% of the time.

Having then studied the rules and what can be done to achieve the right result, Mark and I set about travelling the length and breadth of the country conducting workshops.  We went through the entire end to end process of the Portal, providing advice and assistance in how credit hire can be handled better. This allowed insurers to make the Portal work for them, just as claimant’s representatives had previously done so for their benefit.

Having assisted many insurers (including now running a pilot on taking claims from CNF stage), and enhancing their Portal processes, we are now starting to see the product of that advice and assistance come to fruition.  Let’s look at two such cases.

Abuse of Process - Krasniqi v Barnet & Southgate College
10th November 2016, Hastings County Court (DDJ Tenant)
This case arose out of an accident on 15th September 2014. The claimant’s claim for personal injury was commenced via a Claims Notification Form (RTA1) on 6th October 2014. Within Section E of that form (which deals with the need for and provision of a replacement (hire) vehicle) it was stated that the claimant did not require the use of an alternative vehicle and they did not need one. At no time was any claim for hire intimated within the Portal and the injury claim subsequently settled albeit after the issue of Court proceedings on 7th April 2015. Our insurer client was then met, in May 2016, with a further set of Court proceedings. Those proceedings sought to recover the following on behalf of the claimant:

• Hire - £35,892.80
• Recovery and Storage - £237.82
• Loss of Earnings - £700
• Loss of Trade - £1,413
• Excess - £500

We immediately made an application to the Court to strike out this second set of proceedings on the basis that they were an abuse of the Court process. The defendant should only ever have to defend one set of proceedings and pay one set of costs. It is, at the end of the day, the claimant’s claim and had proper instructions been taken and given the existence of these other heads of damage would have been apparent and could have been included in the first set of proceedings.

The matter came before Deputy District Judge Tenant who agreed with our stance and struck out the claimant’s claim. She commented that there had been no evidence from the claimant as to how this situation had come resulting in the heads of claim being missed from the earlier proceedings.
In addition, there was no “special circumstance” as to why the claim should be resurrected and two set of costs permitted. It was also to be borne in mind that the mere existence of the claim for hire meant that there were contradictory statements of truth for the claimant.

• Savings - £38,043.62 in damages
• Claimant’s costs (approx) - £10,000
• Our costs recovered - £8,310.76

Evidence in the Portal – Rubner v Sajid
9th November 2016, Manchester County Court
A claim was presented within the Portal for Mr Rubner which included a claim for hire, plus storage and recovery albeit the invoice detailed it all as hire. Having provided assistance to our insurer client in respect of how to refine Stage 2 responses, the need to hire was firmly put in issue for the claimant to prove.

The evidence of the claimant, submitted via a statement, set out that the accident damaged vehicle was not his, but that it was owned by a company for whom he helped out from time to time and in return the company allowed him occasional access to cars.

Prior to the Stage 3 hearing, but after Stage 2 had ended, the claimant sought to adduce further evidence clarifying the need to hire. We strongly objected to that evidence being adduced. It had not been sent via the Portal nor at Stage 2. As the claimant had already sent this evidence to the Court we immediately contacted the Court and explained that the evidence had to be placed in a sealed envelope and that the Judge could not see it.

At the hearing, the Judge agreed that the evidence could not be adduced and further, that the claimant had not discharged the burden of proving the need to hire. The claims for the hire, recovery and storage were dismissed and the claimant ordered to pay the defendant’s Stage 3 costs of £600.

• Savings - damages - £5,600 (circa)
• Claimant’s costs - £600
• Defendant’s costs recovered - £600