Ruling means claimants who claim credit hire charges will now need to show evidence of impecuniosity.

In the case of Holt v Allianz Insurance Plc the High Court has upheld a decision that a claimant claiming credit car hire charges, following an accident, should have to disclose some evidence of impecuniosity.

It is a familiar battle between insurers and credit hire companies whereby credit hire companies operate by hiring vehicles to drivers following an accident, extending credit to the driver and providing a replacement vehicle.  The driver agrees to then cooperate in subsequent litigation to recover the hire charges.

In Dimond v Lovell [2002] the House of Lords held that the recovery of hire chares was limited to the actual cost of hire, often referred to as the Basic Hire Rate or BHR.  However, in Lagden v O’Connor [2004] an exception was created which meant that if a claimant was impecunious then he  is not restricted to the BHR and can recover the full cost of credit hire, provided it is not unreasonably high compared to other credit hire providers.

By way of background in this case the Mr Holt had claimed for 25 days credit hire totalling £10,400.00 and as such the insurer Allianz had asked to see some financial information from him to include his bank and credit card statements.

The credit hire company (Auxillis) refused to provide this information and Allianz made a pre-action disclosure application which was heard in the first instance by HHJ Harrison sitting at Cardiff County Court.  The Judge granted Allianz’s application. 

Auxillis applied for permission to appeal and this was initially refused.   However, on a further application in the High Court permission was granted and the  appeal was heard by Barker J on 22^nd March 2023 with judgement was handed down on 4^th April 2023.

Whilst Baker J upheld Auxillis’s appeal on the grounds that the likely party to the proceedings was the insured and not Allianz, it was acknowledged that this was a narrow technical point which would have been easily remedied by bringing any future applications in the name of both the insurer and the insured. 

Therefore given that the permission to appeal was only given on a technical point i.e. if the right party had brought the application it would have been granted, this clearly now means that where a credit hire organisation refuses to voluntarily provide financial information pre-litigation it is entirely appropriate for the court to order pre-action disclosure.

It is important to remember that in claims where part or all of your client’s claim is for someone else’s benefit e.g. a credit hire or credit repair claim QOCS protection could be lost for that part of the claim.  As shown in this case credit hire claims can be very expensive and not all ATE policies cover such claims.

We are pleased to say our Claimsafe ATE policy does indeed cover claim for credit hire or credit repair.

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