Fleet News

More confusion after credit hire bills ruling

A LANDMARK legal ruling which was expected to end disputes over hundreds of millions of pounds in credit hire continues to cause confusion in the hire industry.

The Lords of Appeal ruling on a test case, Dimond-v-Lovell, indicated that many bills sent to insurers by credit hire firms need not be paid and several of the Lords said that credit hire firms should charge the 'spot rate' for daily rental.

But since the decision earlier this month, credit hire firms have been winning court cases over bills, even when the argument is based on the price charged by the hirer, because it is difficult to define what price could be considered the 'spot rate'. Both Helphire and its subsidiary 1st Automotive have won claims since the ruling, where the cost of the hire was the key argument for the insurer not paying a bill.

Insurers claimed when the Dimond-v-Lovell ruling was made that they could be able to push down premiums for fleets as they had to pay out less to credit hirers, but the latest developments show the savings are not guaranteed.

Peter Holding, legal director for Helphire Group, said: 'The House of Lords ruling has not provided a definitive answer on the question of rates. We were hoping the ruling would lay down some ground rules, but that has not happened. It is clear that the way forward for the insurance and accident hire industries is for working protocols to be developed.'

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