As credit hire law has advanced in recent years, most insurers will be well versed in using basic hire rate evidence to dispute credit hire charges.

However, difficulties can arise depending on the financial status of the plaintiff. On a basic level, if a court accepts that a plaintiff could not have afforded to pay for an alternative hire vehicle themselves, they are deemed to have been impecunious and are entitled to avail of the credit hire rate.

What else can insurers do?

Many insurers have facilities to organise hire vehicles for plaintiffs at competitive daily rates at a pre-litigation stage. For insurers who offer this service, I always encourage them to set out an offer to a plaintiff in writing at an early stage; often what we refer to as an “intervention letter”. Not only does this set out the facilities that the insurer can offer the non-fault plaintiff, but it also assists in contesting credit hire rates. These letters should constitute a clear offer to provide a specific vehicle to the plaintiff and be a genuine offer that is capable of fulfilment. If the plaintiff has knowledge of the insurer’s offer and decides to go to a credit hire company regardless of any difference in price, the court will consider the reasonableness of this decision and whether the plaintiff should be entitled to recover the credit hire rate.

We often see the argument that this is a consumers’ world and plaintiffs are entitled to choose whichever hire provider they want. However, in a recent judgment handed down by the High Court in Belfast in Thomas Smyth v Markerstudy Insurance Company Limited [NIHC KB 2022], even though the court acknowledged the plaintiff’s right as a consumer, it was critical of the credit hire company for effectively telling the plaintiff to pay no heed to an invention letter sent by the defendant insurer. The court was clear that when an intervention letter is received, it should be carefully considered by the recipient and brought to the attention of the recipient’s legal representatives if those are in place at that time or as soon as they are in place. As a result, the court reduced the overall hire claim by 20%.

This recent judgment therefore reaffirms the position that intervention letters are most certainly worth it!

In Johnsons, we have assisted insurer clients both in drafting intervention letters and defending credit hire claims on the basis of these letters. If you would like any further information or advice on this issue, please contact Jonathan Calvert from the Personal Injury Litigation team.

* This information is for guidance purposes only and does not constitute, nor should be regarded as a substitute for taking legal advice that is tailored to your circumstances.