Whilst the guidance from Giles v Thompson that, “the need for a replacement vehicle is not self-proving,” is often used by defendants it is an avenue of investigation which must be explored further and more robustly. All too often this is considered an easy hurdle for the claimant to overcome. We will explore how the manipulation and exaggeration of the need to hire can tip a claim for hire into the realms of credit hire fraud.
In Giles v Thomson, Lord Mustill stated:
“I am confident that resourceful lawyers are well able to press by interlocutory measures for a candid exposure of the motorists’ true requirements...
If the motorists are found to have been tempted by the hire companies into the unnecessary hiring of substitute vehicles, the claims will fail pro tanto, with consequent orders for costs which will impose a healthy discipline upon the companies.”
Our credit hire fraud team has had good successes recently were the primary issue was the basic need for a replacement vehicle;
Worthington v Tonks The claim presented was; Hire - £10,844 Storage & Recovery - £659 Misc. - £50
We had concerns with this claim from the start, especially the need to hire at all.
The insured and other witnesses confirmed that they had never seen the claimant driving any other vehicle besides her own during the alleged period of hire. The car had been deemed unroadworthy following the index accident and, although our own engineer agreed, he stated that temporary repairs could have been completed for just £100.
The claimant said she could not have afforded the temporary repairs until she had received the PAV, however, the repair invoice provided was from her son's garage; we asked why this couldn’t have been carried out sooner. They also had a comprehensive policy of insurance which she should have utilised.
In respect of storage and recovery, the invoice indicated that the vehicle had been in storage for 13 days. On this basis we made a Calderbank offer at £1000 with provision for SCT costs.
After considering the mileage on the documentation we were provided with (inspections and MOT certificates), it was clear the claimant had continued to use the vehicle in exactly the same pattern during the period of hire as she had done prior to the accident; an average of 82 miles/week
The claim was dismissed with provision for the claimant to pay the defendant’s costs.
This claim illustrates how there was purposeful manipulation of evidence by the CHO and an engineer to justify the need for a replacement car and a prolonged period of hire.
Andrew Henry Powell v Arthur Bros. Transport The claim presented was: Hire - £14,755.60 Misc. - £50
As in Worthington v Tonks, we raised a number of issues with this claim, focussing again on the need to hire at all.
Investigations showed that the claimant never actually replaced his vehicle following receipt of the PAV. Through analysis of the disclosed documentation we also had a suspicion that the claimant was abroad for a period of time during the alleged period of hire.
There were additional concerns with the case, including the position as to impecuniosity as full financial disclosure had not been provided which led us to raise further need arguments. The claimant also had access to a comprehensive policy of insurance which he could, and should, have utilised.
A robust defence was filed along with a focused Part 18 Request for Further Information.
The claimant accepted a Part 36 offer of £3,000 representing a saving of 80%.
The offer was made on economical grounds as there was a risk that the court may have found the claimant required a vehicle for a short period of time until they had decided how they were going to deal with their transportation issues in the future. On initial review of this claim it would appear that the claimant may have justified a need to hire a vehicle, however, it was only through tactical procedural steps and investigations that we were able to expose the fact that he did not.
In the recent Keoghs success in the Court of Appeal (Singh v Yaqubi) issues of utilisation were considered. Within the realms of credit hire fraud this is also an area of concern and recent success stories are as follows;
Leigh Fairhurst v Darren Lee The claim presented was: Hire - £17,160
In this claim the main issue again centred on the need to hire. The owner of the third party vehicle was a taxi company.
We continued to push for specific disclosure of utilisation documentation in respect of the fleet of vehicles available to the firm whilst also making a nominal offer based on a loss of use calculation for a short, reasonable period of time. We also had additional concerns with the claim as the CHO appeared to be a residential semi-detached house with no sign of a hire vehicle operation and VAT was not being claimed.
We also raised the issue of enforceability as the claimant advised he only worked 14 hours a week which could have meant he would have been deemed a ‘consumer’ for the purposes of the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008.
A saving of 85% was achieved.
This case highlighted the importance of thorough investigations into suspicious taxi hire claims and the way claims are presented from taxi fleet owners.
Sixty Six Car Limited v Mohammed Mohamoud The claim presented was for: Hire - £29,540.40 Recovery & Storage - £774 Misc. - £50
In this matter we maintained the position that the claim should in fact be one of loss of profit/utilisation pursuant to Beachwood Birmingham Ltd v Hoyer Group UK Ltd (2010). Through our investigations it transpired that the following companies were linked through a crossover of directors (and locality):
The claim for storage was on an invoice from Sixty Six Car Limited. We also had intelligence that the claimant was an operating CHO in their own right. This was denied by the claimant’s solicitors initially until we highlighted, through disclosure of information obtained through DPA, that they had featured in previous claims as a CHO.
A nominal offer of £2,500 was made on a loss of use basis and this was accepted. This represented a saving of 92%.
Through our intelligence services we were able to ascertain that the claimant in this matter was also a CHO and through the use of DPA we were then in a strong position to enter into negotiations to significantly reduce the claim on the basis that they simply did not have a need to hire.
Claire Duncan
The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.
