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Taking credit: road accident victims vs credit hire companies

Road traffic accident victims hiring a replacement car on credit may face unexpected claims as new costs recovery rules could make credit hire companies turn to them to recoup full hire costs, warns William Irwin

12 July 2013

So far in the decades-long war of attrition between credit hire companies and defendant insurers, consumers have at worst suffered the boredom and inconvenience of spending a bemusing day at court. But in the increasingly hostile legal, regulatory and commercial environment for credit-hire companies it may be that consumers will suffer more than mere inconvenience.

The Jackson reforms pose a threat to the credit hire industry. For example, the new CPR 44.16(2) disapplies claimants' qualified one-way costs shifting (QOCS) protection where proceedings include a claim which is made for the financial benefit of a person other than the claimant. Paragraph 12.2 of the Costs Practice Direction uses claims brought to recover credit hire charges as a specific example of what the new CPR 44.16(2) is designed to tackle. There is also an ongoing Office of Fair Trading investigation into the credit hire industry.

A changed environment could prompt credit hire companies to rec...

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