It will provide guidance on whether credit hire bills for providing vehicles to non-fault accident victims are enforceable and have to be paid by insurance companies. At present, there is a crippling stand-off between the non-fault accident assistance industry and insurers, focusing on the terms of contracts. Insurers claim many of the contracts from credit hire companies fall foul of the Consumer Credit Act 1974, and were signed in such a way that they are unenforceable in law.
Credit hire firms say the debate has been used by insurers as the basis for a wholesale refusal to pay any bills which they receive from the growing industry, because some hire firms charge too much. Shares for non-fault accident assistance firms have been hit hard by the uncertainty including Alpha Accident Management, which suspended its AIM-listed stock after it fell below its issue price. Helphire shares have also dropped over the past few weeks, although it says it is not badly affected by the problems.