Hastings COVID 19 Update

Updated: Apr 19, 2020


Today’s note is a bit depressing. The more you read the comments made by defendant insurers and their solicitors, the more it seems like we are living through Groundhog Day. In today’s note:

· Hastings suggest a willingness to agree protocols by deviating from the GTA protocol and proposing their right to intervene;

· The Hastings approach appears to be based on an agreement reached with the CHO trade body on behalf of subscribers to the GTA (or at least that is what their covering email claims);

· In other news, Horwich Farrelly join with Keoghs, DAC Beachcroft and Clyde & Co to share their views about how insurers might react to credit hire claims following the end of the lockdown, and

· In conclusion, there has never been a more appropriate time for the credit hire industry and those engaged with settling credit hire claims, to regroup, debate and consider how best to manage both the current lockdown and the conflict that is likely to follow. Doing nothing is a very strange choice.

One of the things I found appalling about Hasting’s advice was their suggestion about the steps a consumer might make to buy a replacement car during the current lockdown. The concept of acting in haste and repenting at your leisure seems to have been lost on Hastings but the suggestion that you should advise a consumer to replace their car ‘unseen’ on the basis that they have cancellation rights under consumer legislation and might be happy to embark upon litigation under the 1967 Misrepresentations Act seems to fall short of recognising the need to treat customers fairly, especially when those customers are innocent victims of the negligence of their policyholder. The CHO should be calling these things out. I would suggest the media would be keen to know what insurers are suggesting as they benefit from lower claims, fewer driven miles, furloughed employees paid for by taxpayers but a constant premium base stimulating higher profits. It is not lost on me that Hastings issued a profit warning earlier this year.


First, dealing with the approach from Hastings, the link below will take you to the pdf document which is snappily titled “HD Working Together CV CHO V7.pdf”.

https://www.dropbox.com/s/a0krjso881y6frs/HD%20Working%20Together%20CV%20CHO%20V7.pdf?dl=0

I struggle to imagine what versions 1 to 6 of the document looked like but at least the covering e-mail had quite an optimistic tone:

Further to discussions between insurers and CHO’s within the GTA framework, Hastings Direct are issuing our own document (attached) re Covid-19 with the intention/spirit of encouraging good communication between HD and the CHO market to ensure our customers are best served during this period and beyond”.

The document invites CHO’s to “discuss a new way of working” and even offers to “set up a protocol”. However, there then follows seven pages of diktat about how CHOs will behave to adopt Hasting’s new way of working. I will not repeat the content because you will all have seen the same from Hastings and from other insurers and defendant solicitors but the takeaway would appear to be that you must concede to all of the operational points they make, make enquiries of other hire companies and specifically acknowledge the £5 and other heavily discounted rates that might (or might not) be available for Europcar and others and cease any current hires and give Hastings the opportunity to intervene.

It is hard to know whether all of these issues have been agreed by The CHO as appropriate actions for GTA subscribers to take but, if they have, then Hastings will have the opportunity to adduce any such agreement in evidence if hire claims are subsequently litigated.

I would hope that no such concessions were made by the trade body, especially in respect of intervention which the GTA forbids as a tactic to be utilised by insurers. If there have been any such concessions, then subscribers should seek clarity as to what those concessions were in order to ensure they do not embark on litigation later with the risk of adverse costs orders if a judge is presented with concessions agreed by the trade body and the CHO has not complied with those concessions which, I suspect, defendant lawyers will suggest demonstrates inappropriate and profiteering behaviour by the CHO.

One of the things I found appalling about Hasting’s advice was their suggestion about the steps a consumer might make to buy a replacement car during the current lockdown. The concept of acting in haste and repenting at your leisure seems to have been lost on Hastings but the suggestion that you should advise a consumer to replace their car ‘unseen’ on the basis that they have cancellation rights under consumer legislation and might be happy to embark upon litigation under the 1967 Misrepresentations Act seems to fall short of recognising the need to treat customers fairly, especially when those customers are innocent victims of the negligence of their policyholder. The CHO should be calling these things out. I would suggest the media would be keen to know what insurers are suggesting as they benefit from lower claims, fewer driven miles, furloughed employees paid for by taxpayers but a constant premium base stimulating higher profits. It is not lost on me that Hastings issued a profit warning earlier this year.

Following on from that is the most recent advice issued by Horwich Farrelly (“HF”) (see link below):

https://www.h-f.co.uk/knowledge/credit-hire-claims-could-be-exploited-during-covid-19-lockdown/

Their advice raises two issues that CHOs must be live to. The first is the issue of impecuniosity, something that The Credit Hire Forum is seeking an opinion about and which I urge you to consider supporting. HF says:

Some CHO’s may also try to take advantage of the fact that Covid-19 is having a negative impact on the finances of households with the threat of redundancy, furloughing and financial uncertainty. The industry as a whole needs to ensure that the early disclosure of financial documentation is still provided in the usual way as well as checking to see if claimant’s availed themselves of any of the government financial support that has been proposed for the employed and self-employed.”

I am not sure that judges will be as supportive as HF think they will about the incremental obstacles being placed in front of legitimate claimants in order that defendant solicitors can maximise their opportunity to generate fees. This newly emerging dynamic where the sheer hypocrisy of their arguments, and the reality that they are all driven by self-interest, needs a considered response.

Also, the advice from HF inviting insurers to intervene is inappropriate and needs calling out although I suspect CHOs are struggling to work out how. The advice from HF states:

The positive news is that there are ways that insurers can intervene in order to reduce the impact of some CHO’s trying to exploit the current situation. The ability to offer the claimant a free replacement vehicle and repairs has always been an insurer’s strongest weapon to combat any hire claims and this crisis is a time to focus on and review how any intervention strategy can be adapted. A few straightforward considerations in light of the crisis include sending letters via email with a read receipt, including to the CHO with a covering letter explaining any additional steps the insurer is taking because of lockdown. Also, contacting the third party by telephone and following up by sending the letter via SMS or email.”

It is the final sentence that is offensive – contacting the Claimant by telephone or SMS. If Darren Mendel had not been involved in obtaining the Copley judgement all that time ago you might forgive him for forgetting what Longmore LJ had to say on the issue at paragraph 9 of the judgement in the Court of Appeal:

What is completely clear to me is that the cold telephone call to Mrs Copley was inappropriate. If that is KGM’s practice it should be discontinued forthwith”.

Aside from issues associated with GDPR, you have to wonder whether Counsel should be encouraged to ask the courts to look at the issue again and confirm Longmore LJ’s direction that unsolicited phone calls should stop. It is certainly one of the other issues that the Credit Hire Forum is considering. On that issue, the website will be available to view shortly but, further to my email of yesterday and with thanks to those of you who have called and spoken with me and already agreed to support the Forum, it is intended for legal and associated professionals, although we welcome CHO’s joining the Forum as associate members and contributing to the dialogue of how to address coherently some of these re-emerging issues in the interests of the sector. Leaving that dialogue to those Defendant solicitors and insurers who wish to narrow the options and impose obstacles on the recoverability of credit hire claims, or even allowing them to roll back the law because nobody takes a contrary view of their behaviour, is a poor alternative.


One of the things I found appalling about Hasting’s advice was their suggestion about the steps a consumer might make to buy a replacement car during the current lockdown. The concept of acting in haste and repenting at your leisure seems to have been lost on Hastings but the suggestion that you should advise a consumer to replace their car ‘unseen’ on the basis that they have cancellation rights under consumer legislation and might be happy to embark upon litigation under the 1967 Misrepresentations Act seems to fall short of recognising the need to treat customers fairly, especially when those customers are innocent victims of the negligence of their policyholder. The CHO should be calling these things out. I would suggest the media would be keen to know what insurers are suggesting as they benefit from lower claims, fewer driven miles, furloughed employees paid for by taxpayers but a constant premium base stimulating higher profits. It is not lost on me that Hastings issued a profit warning earlier this year.ve.



#Coronavirus #insurers #cooperation

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