Why am I now liable for my ‘no fault’ accident claim?

Credit hire company EasiDrive says I will face legal and other costs if I don’t go to court

I was given a courtesy car after an accident last year; now I’m being pursued for a liability I had no idea I was incurring.

When my ancient Mondeo was written off, the other party accepted full liability and my insurer referred me to EasiDrive, which I understood to be a claims-handling company. It said I was entitled to a courtesy car while I waited for a settlement, and delivered a ridiculously expensive convertible BMW.

EasiDrive assured me it came with a zero-excess policy. However, it replaced it a few days later with a more ordinary car which I had for a month.

My old Mondeo was taken by EasiDrive for disposal. I had wanted to sell it for scrap, but was warned that if I did, the other party’s insurer could deduct from the settlement whatever sum it considered it had lost in scrappage. There was no suggestion that I might incur any expenses by this decision.

Many months later, I was contacted by a legal company, which said it was instructed by EasiDrive because the at-fault driver’s insurer had not paid for the hire car.

Because I had signed the hire agreement, it needed to take out proceedings in my name. It said that EasiDrive would not pursue me for any eventual shortfall as long as I cooperated; so I agreed.

This has become increasingly oppressive. I have been asked to provide all my financial information in relation to bank accounts and credit cards, and told I have to attend court to be cross-examined.

When I was finally shown the court documents – prepared in my name – I found that EasiDrive is claiming more than £2,000 for storing my old car, as well as the hire fees for the courtesy cars.

The other side has paid some of this but is baulking (not unreasonably) at the full cost.

I cannot take time off work on the day of the hearing, and have been told that if I do not attend court I will be deemed not to have cooperated, and will become liable not only for outstanding hire and storage fees, but also legal and court costs. This has become a nightmare.

KR, London

You are one of growing numbers of no-fault accident victims to be caught in a standoff between two insurers. EasiDrive is what is known as a credit hire company (CHC), a notion devised in the 80s to manage no-fault claims. They pay insurers and brokers large referral fees for the privilege of doing this.

Its profits come from arranging repairs, disposal and replacement vehicles, often at inflated cost, then demanding that the other driver’s insurer foot the bill. If the other insurer refuses, the CHC pursues them through the courts in the name of the blameless driver. What most drivers fail to spot in the terms and conditions is that they are liable for the full sum, including legal fees, if the third party doesn’t pay up.

After a two-year investigation in 2014, the Competitions and Markets Authority (CMA) found this practice increases all drivers’ premiums by £84m and distorts the market.

However, despite concluding that it causes “significant consumer detriment”, the regulator decided that reforms required a change to the law and abandoned plans to intervene.

The Association of British Insurers told the Observer in 2016 that the credit hire market was an “abuse of the system” which prevents insurers hiring out their own courtesy cars at more reasonable cost because brokers automatically refer claims to CHCs.

It seems to have changed its tune in response to KR’s experience. It merely states that customers should read the terms and conditions of CHC contracts before signing, and declines to comment on the practice of credit hire. EasiDrive tells me that it provides a “comparable” replacement car to clients.

When asked how a BMW convertible is “comparable” to an elderly Mondeo, it says: “On occasions of great demand, where our fleet mix does not allow us to provide a comparable vehicle, we provide a free upgrade at no additional cost to the customer or the third-party insurer.”

EasiDrive says it subscribes to the Credit Hire General Terms of Agreement (drawn up by the Association of British Insurers) which define the vehicle categories and the rates that can be charged for each category.

It says: “As the cost of the replacement vehicle is recovered from the at-fault party, supplying vehicles of significantly higher value is not in a credit hire provider’s best interest, as they would be unable to recover those additional costs.

“The rate charged for storage of written-off vehicles is within the market range. All customers are advised of potential storage charges on the agreement that they sign.”

Drivers who are offered a credit hire car should check the small print before signing, establish what costs they may be liable for and decline top-end models which could leave them with a bill of up to £475 a day if the third-part insurer won’t pay.

If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number. Submission and publication of all letters is subject to our terms and conditions


Anna Tims

The GuardianTramp

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