It's about the settlement

A week ago I apologised for highlighting how I thought the clear and focused guidance and leadership that the wider credit hire industry deserves was noticeable by its absence.

Whilst things may well have changed over 37 years, the trade body always had to do more than managing engagement with insurers through the GTA Technical Committee, even if the GTA is preferable to any other route for settling claims. I say that because not all CHOs subscribe to the GTA and not all claims settle in the GTA protocol and that has always been the case even if the relative percentages may have changed over the years. I also make that point because the Coronavirus epidemic will inevitably increase the likelihood of more claims being disputed and higher volumes of litigation.

Difficult and unconventional times call for clear, focused and effective strategic thinking, especially where the difficulties facing some CHOs, and the inevitable financial challenges that will follow, could not be more serious. Insurers and defendant law firms will already be discussing how to ratchet the pressure on credit hire operators and those conversations will not be taking place in the ABI GTA Technical Committee. Nor will they be taking place in the ABI Motor Focus Group where insurers have always been paranoid about any accusation of anti-competitive or unlawful collusion. Those discussions will take place between insurers and their preferred defendant law firm who will, as we have seen by recent media output from all of them, be preparing their recommendations on future claim settlement strategies whilst the lockdown continues.

Recognising the propensity for more litigation, I wrote to several Claimant solicitors and barristers engaged in Claimant credit hire litigation to announce the formation of The Credit Hire Forum. I received enough support for the proposition to formally launch the initiative. In simple terms, I have created a Forum for those legal professionals and other associated entities who want to see the Claimant credit hire industry survive and prosper. The Forum will not infringe on the role of The CHO in its management and support of the GTA, a protocol which we both support and commend as preferable to litigating massive claim volumes, or on its social activities. However, some CHOs do not subscribe to the GTA, many are not members of the trade body, and whilst those that are might support the social side of the CHO, they are not served in respect of their approach to litigation and their engagement with legal and other associated professionals. Even CHOs that support the GTA and the trade body still have cause to litigate and the Forum will build a mechanism to rival the approach of FOIL, aligning the Claimant litigation community by developing a coherent framework and a united front to better support those forced to litigate to recover credit hire charged.

The aim of the Forum is to fill a gap; to act as an interface for best practice across Credit Hire litigation to deal more effectively with better resourced but less agile opponents. Success will be defined by the ability to share information and extend relationships across all facets of the credit hire sector, both GTA and non-GTA subscribers and CHO and non-CHO members to create a more productive dialogue between those engaged in litigating Credit Hire claims and those asking them to do so. In addition to creating a united front, the Forum is primarily focused on four things:

· Improving the channels of communication to empower better informed pre-litigation conduct by CHOs which is both more effective and less prone to challenge;

· The development of coherent litigation strategies inspired by a shared appreciation of evolving defendant initiatives;

· Building industry collaboration, without risk to each other’s IPR, to deliver more profitable and effective litigation, and

· Anticipating and responding to regulatory, statutory or other legislative or industry challenges.

The Forum is not an Association; it does not look to impose on members a particular method of litigating claims. Nor does it look to expose members to the risk of prejudicing their IPR. Membership is open to those solicitors and counsel that are actively engaged in credit hire litigation, that recognise the increased regulatory, economic and jurisprudential challenges faced by the credit hire industry and who wish to align their strategic and tactical focus to better effect. Associate membership is offered to all others with an interest in supporting credit hire litigation, including credit-hire operators, engineers, rate experts, investigators and agents and others with an interest in furthering the interest of the credit-hire industry.

The challenge I have set is to bring together the lead players within the sector, to influence the shape of credit hire litigation in the best interest of those CHOs forced to litigate to recover their outstanding debt. The annual cost of membership differs based on status. The target membership includes solicitors, barristers and other professionals that supply their services as part of the recovery of hire claims outside of the GTA. However, for CHO’s that wish to join as Associates, annual membership is available at a flat rate of just £100 per month (payable monthly or annually). However, in recognition of the current Coronavirus issues, a payment holiday is offered to all CHOs and Associates until 1st June 2020. Barristers are subscribing at a rate of £120 per month, and solicitors at £300 per month (all rates include VAT).

Those who know my background will remember the energy and focus I can bring to the table as well as my determination to improve the current environment for the benefit of all. Since I retired from Accident Exchange, I completed my PhD, was appointed an honorary lecturer at the Institute of Criminal Justice Studies at the University of Portsmouth and then trained and qualified as an accredited civil and commercial mediator. Before I retired, I was a member of the AMA and The CHO trade body, chairing both for many years. I also sat on the GTA Technical Committee for ten or eleven years and represented Accident Exchange and The CHO through the various investigations inspired by insurers and culminating in The Competition and Markets Authority. That was a battle that we won on paper but we then lost when the Court of Appeal read the CMA Chair’s Press Release in which he invited those capable of modifying the basis on which BHR was derived to reduce the bench mark for recoverable hire charges in litigation, something that followed promptly with McGregor and Stevens.

For now, I think there are a couple of priorities. Maintaining current insurer relationships (for those that have them) is critical. But for those that do not the priority must focus on how life might change post lockdown and how best to plan for that future. One of the things currently being considered is a review of the arguments for Claimant impecuniosity, something especially important following the recent changes to the Civil Procedure Rules and the obligation on a Claimant to plead impecuniosity from the get-go. Who in their right minds would use any spare savings that they might have available today to hire a car following the actions of a negligent driver when the delays in recovery of those monies as a consequence of delays in the civil justice system, could run to years. Add to that the risks of accident victims currently being furloughed on 80% of current salary to a maximum of £2,500 per month and the greater risks that their employer will fail and that unemployment will spiral as the Coronavirus epidemic threatens the biggest global recession of our lifetime. These are not normal times and these and other issues deserve focus and attention which might help the credit hire community materially where insurers later force litigation rather than settling claims within the GTA.

Likewise, the issue of BHR is about to enter another chapter. Not only is that chapter likely to be informed by the post lockdown availability of vehicles, it is also more likely to be defined by the obligation of those rate experts acting for insurers to sign a revised statement of truth with their evidence. Fundamental dishonesty can work both ways; had that revised statement of truth been in place when Autofocus were still alive, the consequences for their employees, directors and others would have played out in first instance hearings and been far more significant for them far sooner than proved to be the case. These issues need to be debated and addressed before the litigation landscape is, yet again, defined by the defendant community. It has always been the case that when the credit hire industry is able to control the outcome of litigation that the ability of insurers to reduce rates offered in the GTA is limited. Likewise, when the response to litigation by the industry is coherent and intelligent, the greater the chance of claims settling within the GTA in the first instance. There is a balance which appears to have been disturbed as focus has centred on resolving 100% of claims within the GTA when such an outcome is impossible.

The Credit Hire Forum is intended for legal and associated professionals, but we welcome CHO’s joining the Forum as associate members and contributing to the dialogue. 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 is a poor alternative.

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