Review of the Quarter: Credit Hire AWARE 3

As we approach the winter uplift in credit hire volumes, the market continues to give us glimpses into the future; who will be the providers of credit hire and what their approach will be.

It is my view, as well as a number of parties who work with Keoghs, that external investment into credit hire organisations (CHOs) and claimant law firms will doubtless see consolidation of the market over the next 12 months. Latterly in this quarter, two such parties have been recipients of significant finance, and this will clearly be an enabler for future growth. Generally, the Alternative Business Structure (ABS) model in the claimant market is translating into clearer litigation strategy in credit hire. It is also becoming apparent that specific tactics are being used against individual insurers depending on their claims philosophy.

In this issue, the Keoghs team will update on how we have been tackling this activity, and what the current landscape is. Mel Mooney will be updating on the Keoghs case of Opoku v Tintas. There has been much discussion and conjecture on forums and message boards about what this judgment means. The unfortunate timing of the summer break meant the transcript (and judgment) were originally delayed, though our attendance at the hearing and the subsequent release of the judgement means we can now provide some of the insight that had previously been missing.

Opoku provides clarity on an issue that was being batted around the county courts as to whether impecuniosity, and subsequently need, should be assessed throughout the hire period. Compensators need to understand the application of Opoku, and in which cases it has merit, meaning Mel’s overview is well worth a read.

Keoghs’ clients had also raised issue with second actions. For those unfamiliar with the topic, these were cases being issued against insurers under the European Commission (EC) directive, after the original action against the defendant was struck out for failure to comply with directions.

The Keoghs’ appeal case of Richard Robins v NIG Insurance Ltd was reported on Lawtel in October; providing clarity as to whether the judge at the original hearing was entitled to strike the claim out as an abuse of process. The relevance to credit hire lies in the fact that a significant number of these cases were being issued for credit hire claims; indeed Robins contained an element of credit hire.

We have also included this month an overview on fleets (or those with access to fleets) who credit hire. The cases in question have provided welcome confirmation that the county courts are applying the Keoghs’ Court of Appeal (CoA) cases of Singh v Yaqubi and Opoku v Tintas, in addition to Beechwood Birmingham v Hoyer in this area.

We have found that in order to be successful with this argument, pre and post litigation strategy needs to be clearly aligned and absolutely followed. Only in the last fortnight we have seen a distinctive change in approach by one significant provider. Keoghs can provide further guidance on this to insurers individually as required.

In the wake of Opoku v Tintas we have received an increase in queries on matters relating to taxi claims. These do not just revolve around the need to hire and use of the vehicle, but also issues from drivers registering their vehicle as a taxi in order to waive the congestion charge, to the abuse of processes in certain local authorities not to inspect taxis post-accident, pre-repair.

The latter in particular has yielded interesting results in recent cases. In response, Keoghs have prepared strategy documentation and guidance on these points.

In relation to credit repair mentioned in the last edition of Credit Hire AWARE, we have asked TCF Corporate for a guest article on their findings in this sector in light of the investigations they carry out. They also discuss and give their opinion on where the market is in terms of average rate.

In addition, Keoghs are in the process of drafting letters to two independent engineering firms who we have been advised by CHOs are causing leakage in hire periods due to failure to adhere to their instructions.

I can’t finish without mentioning the Competition Commission (CC). All registered parties have now met with the CC either individually or as part of a group. Following on from that, a further 12 questions were sent out for response. We continue our participation in this process, and, as ever, it is fair to say opinions are split - and sometimes at opposite ends of the spectrum. At this stage, the CC remains confident of delivering to the published timetable; thank you to those insurers continuing to keep us involved with this process, it has been interesting to hear the differing views.

If you would like further detail behind the review of the quarter, please do not hesitate to contact myself or Melanie Mooney.