Credit Hire Aware 10 - Review of the Quarter

In the last quarter, the mainstream and industry press have rightly obsessed over Brexit and its implications to the wider economy and our market.

The departures from the Government of the likes of Oliver Letwin and Michael Gove (not to mention the Autumn Statement’s author, George Osborne) has, for some, increased the potential for the reform to be kicked into the long grass for a period. But will it?

The truth is that much of the leg work to release the consultation on market reform in relation to motor claims, and specifically the small claims track limit, is already done. However we have still not seen a consultation paper, and we know that the Government’s major focus, and the majority of the legislative timetable, will centre on Brexit issues.

Whilst credit hire did not have the same profile as personal injury reform in the Autumn Statement, it was mentioned as an area the Government would be willing to look at.  

Nevertheless, the general consensus seems to be that, in the absence of a clear proposal from the industry, movement in this area is unlikely in the near future. Therefore it is important to try and improve the current model.

In April we, as an industry, embarked on the changes brought about as a consequence of the decrease in GTA rates – the first such decrease in all the time I have worked in credit hire. The results to date have been largely unremarkable.

Our data shows us c. 75% of claims are still settled within 30 days of receipt of payment pack; 96% of claims are received prior to, or during, hire; and we pay late payment charges on less than 4% of cases (where these are paid, they tend to be as a result of liability discussions).

These results mirrored those for the full half year, and the full annual results of the two years we tracked prior to that. This shows the CHO market has not altered its behaviours to date, as perhaps feared in some quarters, and continues to present claims in a similar way to before.

Indeed, in our experience many CHOs are asking to re-open channels of communication for files approaching 60 days or where deadlock has been reached. It seems that despite, or maybe because of, a prolonged rate negotiation there is a genuine wish to settle claims through dialogue and pragmatism.

There are a couple of exceptions to this with us now seeing two of the larger providers refusing to take calls during the hire period itself. Such calls, certainly from our operation, are in place to ensure repairs are authorised and PAV’s are paid quickly, liability is resolved, and any issues are flagged at a time when something can be done about it.

You may think it strange that a CHO would not want such an approach, given it would aid their customers in receiving a positive claims experience. We are now in dialogue with the two companies to understand the best way we can offer this proactive assistance.  

The ongoing debate on the cost of motor insurance does not seem to be lost on district judges. Results at trial, and on claims generally presented outside of the confines of the GTA, means insurers are generally paying less than they would inside of the protocol.

It is undoubtedly the case that the implications of Stevens, bolstered by arguments around Copley, means that the daily rate being achieved is notably reduced.

We know such a landscape is causing many insurers to question and review their protocol arrangements and the eroding benefits some are seeing. Many of our clients, and indeed ourselves, have seen inflation of 2-3 days in recent months in some of the protocols, without any (or at least any reasonable or logical) explanation.

The foundations and understanding on which many of those protocols were built does not seem to reflect the present reality in some cases. We regularly receive feedback from our clients in review meetings relating to their negative experiences of new total loss practices and the authorisation behind credit repairs, both of which are prolonging hire durations.

Many insurers are looking to benchmark their protocol performance against wider industry experience both inside and out of such arrangements. To assist in this regard we will be releasing our H1 2016 performance data to clients this month.

Furthermore, in this quarter’s edition we will be taking a look at more ‘local’ issues affecting claims handlers across the sector.

On the following page we have an article on the Willis v Phillips Court of Appeal case which is an important read. We have seen this case misquoted by claimants and strangely misunderstood by a couple of defendant solicitors. Given it clearly forms part of certain firms’ strategy to maximise damages and costs where credit hire and injury are pursued through the MoJ portal; ensuring you have all the correct details will influence handling practices.  

Also, a few months ago we had an excellent turnout to one of our mock trials, and later in the issue we provide an overview of the event. These sessions are a great way to give handlers and technical leads a more detailed appreciation of the court process, and this time focussing on the fraudulent element of claims gave an excellent insight for those who attended.

I hope these, and the other contributions are of continued use to our readers!