Strategy; something the industry needs to grasp


Keoghs are one of three or four leading law firms that have imposed a considerable drag on the financial and operational performance of the credit hire industry.

Like others in the space, their marketing approach has relied upon them persuading motor insurers that they can manage claims more cost-effectively and that, by doing so, their efforts will translate into a model that combines a lower handling cost per claim together with a process that will drive down the average cost per claim. It’s a neat strategy that works for insurers and it works for defendant solicitors.

The approach was very clear from around 2008 when Keoghs worked with Autofocus who had persuaded insurers that GTA rates were higher than the spot rate and that litigation was a good way of bringing the credit hire industry to heel. It is an episode that still serves as a lesson today. The outcome from the combined approach of insurers, solicitors and Autofocus was:

  • a reduction in the volume of credit hire claims that settled within the GTA,

  • an increase in the volume of litigated claims being managed by Keoghs, Morgan Cole and Lyons Davidson,

  • the propensity for impacted CHOs to suffer a cash flow crisis which allowed defendant solicitors to negotiate inferior settlements that benefitted the liability insurer and so generated further business to the detriment of the CHO and,

  • the ability to drive media coverage and persuade the establishment that the credit hire industry were rogues at best and dishonest at worst

Indeed, from 2009, Keoghs produced a series of newsletters which often referenced the millions of pounds in savings they had generated for their instructing insurers by under-settling credit hire claims.

Approach to litigation

Keogh’s approach to defending claims is not particularly unique but it does follow a formulaic approach which is often supported by others.

They start by identifying an issue that they think will find favour with both the court and the mainstream media and then they build a medium-term case to sell the plan to their insurer clients. That plan requires the insurer to target at least one CHO, has to encourage insurers to delay the settlement of claims (in or out of the GTA) and then to identify a number of test cases and execute their strategy to drive a result at first instance or a case that they might appeal. Their intention is usually to challenge the credit hire operator financially by restricting cash flow and then either to make new law or to erode the limits of existing laws, whether that involves consumer credit, enforceability, misrepresentation, sham, rate or any other issue.

Melanie Mooney was a partner at Keoghs until recently and was there during the Autofocus years, but she left to join Clyde & Co recently. Paying credit to her vision from as long ago as 2017 (or the vision of whoever wrote her articles), she wrote an article for Keoghs entitled “Credit hire: A strategic approach” in which she defined strategy as “a plan of action designed to achieve a long term or overall aim”.

She continued:

As with all strategies it is critical to ensure that what you are doing does not make your position worse.

One of the difficulties you face as a defendant is that the ‘whether’ and ‘when’ to issue proceedings is not within your gift. You therefore need to consider a set of criteria for the type of case in respect of which you are seeking clarity, then devise a process and “marker” documents to set up the case so that if and when proceedings are issued you can deploy the strategy.

Even there, it does not end. Cases may settle, evidence may change and the criteria may alter. It is a case of deployment, then monitor and amend as appropriate. It is very much the “long game” rather than a short, transactional process. However, when a strategy comes together it can be a real game changer.”

I am no fan of Keoghs but when you look back at what they achieved by their strategic approach to credit hire, you can see the method in the madness. Just look at the cases which Keoghs inspired:

  • Singh v Yaqubi [2013] EWCA Civ 23

  • Opoku v Tintas [2013] EWCA Civ 1299

  • McBride v UKI [2017] EWCA Civ 144

Even though Ms. Mooney is no longer at Keoghs, it appears that their approach to litigation remains the same.

Harries v Baugely was a case they ran before recorder Edis QC in Nottingham County Court where I suspect, had their insurer client lost, they would have run an appeal to the Court of Appeal, and probably beyond. Insurers are keen to resolve a number of issues that insurers regard as work in progress. One of those is trying to impose an obligation on the claimant to utilise their own comprehensive insurance policy to reduce hire periods. As an approach it runs contrary to the well-established doctrine of res inter alios acta but it is a prize that insurers dearly want to seize. They tried to do so during the CMA investigation and I have no doubt they are still set on the objective and keen to find a case to appeal to the Supreme Court to deliver on their objective.

At a lower level, they are currently focused on the limited success they achieved in the first instance decision of McNally v Aviva. On the back of the judgment in that case they are driving a PR and media campaign aimed at convincing the establishment and insurers that the credit hire industry is engaged with CMCs and Google in a series of ‘spoofing’ advertising campaigns. They claim that by exploiting accident victims at the roadside. CMCs and CHOs are pretending to be the insurer of the victim and then exploiting the injured party. To give the story some gravitas and make sure the Daily Mail pick it up, they also have to allege fraud although it is not clear how that fraud is being perpetrated or who the victim is.

Of course, it’s all rubbish but, if there is one thing we should have learned after 40 years in respect of credit hire, it is that defendants will never let the truth get in the way of a good story and defendant solicitors will never let it get in the way of their overarching strategy to undermine the efforts of the credit hire industry.

But it’s not just Keoghs that are capable of evolving or participating strategic challenges. Defendant solicitors hunt in packs and do so under the auspices of the Forum of Insurance Lawyers (“FOIL”).


Looking for a moment at the current objectives of FOIL’s sector team that is focused on credit hire, it is clear that the defendant opposition represents a material threat that most CHOs and too many claimant solicitors have yet to appreciate. Their objectives, however, are clear. They claim to be focused on:

  • Working with the MOJ to achieve reform of the credit hire market

  • The assessment of Basic Rate

  • The potential for the Civil Liability Bill issues to encourage fraudsters to migrate to other areas - fraud in high value credit hire claims, and

  • The relationship between insurers and CHOs plus focusing at the moment on the rate review.

When I launched the Credit Hire Forum a couple of weeks ago, I highlighted the collaborative approach of the defendant community and invited the credit hire community to identify how they were reacting to these challenges.

The answer that I came to was that there was no coherent or considered response to FOIL and that, even after 40 years, the credit hire industry remains reactive and not proactive to those issues that will define their future sustainability and profitability.

  • Where is the plan for dealing with the basic hire rate?

  • How will the credit hire industry ensure that there is sufficient tension from the threat of litigation so as to avoid the insurance industry driving down the GTA rate at the next rate review?

  • What does the industry perceive to be high on the register of litigation risks going forward?

These issues are real and live issues that matter for insurers and they should matter just as much for CHOs as well and, as I said above, it’s not just about Keoghs and it is not just about litigation.

DAC Beachcroft and Keoghs both have significant corporate lobbying arms and, through the efforts of Andrew Parker, who was a past president of FOIL, and has since established himself as the ‘go to resource’ for the ABI, change has been secured. Andrew was appointed as a solicitor member of the Civil Justice Council for three years from 2014 albeit that his tenure was extended to 10th September 2020. When you look at the changes in PD16, it is worth asking how they evolved and what else might be in the pipeline? FOIL have historically engaged with the Association of Her Majesty’s District Judges and I recall that in 2010 Morgan Cole were influential in the creation of standard directions that were particularly unhelpful to the credit hire industry. One of the aspirations of those solicitors and barristers subscribed to The Credit Hire Forum is to engineer a similar engagement in order to balance the knowledge deficit that has flowed from a decade of disinformation.

And what of the other defendant law firms?

Sarah Cartlidge at BLM Law is co-author of the credit hire section of Bingham and Berrymans. She was the prime driver for insurers in Bent No 2 v Highways & Utilities [2011] EWCA Civ 1384. Horwich Farrelly highlight on their website their success in four leading cases:

  • Copley v Lawn [2009] EWCA Civ 580

  • Clayton v EUI [2017] EWCA Civ 144

  • Akhtar v Boland [2014] EWCA Civ 943

  • Charles v EUI Ltd

Add those five cases to the other three major successes from Keoghs and it becomes clear that it only takes the effort of a few solicitors to change the legal landscape materially.

Horwich Farrelly attribute their success in pinning back the credit hire industry to nothing more than operating as a partnership with their insurer clients although I suspect there is some collaboration with their peers as well. Specifically, they claim that success is driven by what they can do at the front end of a claim – intervention, early PAV payments, repair monitoring and liability assessment. There are some serious messages for the credit hire community in that sentence. The need to anticipate the next challenge and to ensure that the end to end process reflects best practice is critical.

Thought for Today

Considering the aggregate impact of just four defendant solicitors that are also members of FOIL it is clear that the defendant community is so interwoven with the ABI, the Civil Justice Council, the mainstream media and each other that their collaborative approach has to be considered at least part of their collective success.

Defendant solicitors think, talk, strategise and act in a manner that has enabled them to consistently constrain and limit the success of the credit hire industry whether by mounting a challenge to create law, by working with regulators to limit the capability of claimants or by focusing on supressing the GTA rate review because of a perception that they have controlled the environment.

I remain of the view that the best claim is a settled claim and that if claims settle within the GTA or other protocol on terms satisfactory to the CHO then that is a positive. However, I also believe that there is always a gradient. It is an uphill gradient when we try to confront a challenge – whether it is enforceability, Autofocus or the CMA. When it becomes a downhill gradient, when it all appears to be too easy, there is a danger that the downhill gradient becomes a slippery slope.

Litigation in the wold of credit hire is inevitable. It is the mechanism deployed by insurers to control the credit hire sector and to limit their outlay. Litigation is also necessary for the CHO. Done properly, it creates uncertainty for the insurer and uncertainty leads to improved settlement and has always been the counter factual to the GTA and the reason why GTA rates rose at every rate review in the fourteen years between 2000 and 2014.

The gains made for insurers by Keoghs, DAC Beachcroft, Horwich Farrelly and FOIL represent a significant achievement and their approach is something that the credit hire industry would do well to learn from. Indeed, it is something that the Credit Hire Forum is already working to emulate with fourteen claimant law firms now subscribed.

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