The High Court has upheld a decision that a claimant demanding payment for credit car hire following an accident should have to disclose some basic information about their financial status.

Insurer Allianz had applied to see the claimant’s bank account and credit card statements for the three months before his accident in 2020. He had claimed for 25 days’ rental on credit hire, coming to almost £10,400, but Allianz had suggested the going rate was closer to around £1,500.

His Honour Judge Harrison, sitting at Cardiff County Court, granted Allianz’s application, saying that claimants in a credit hire case ‘should not be able to avoid the issue of impecuniosity by saying that [they] do not deal with the issue at a pre issue stage’.

On appeal in Holt v Allianz Insurance Plc, Mr Justice Andrew Baker agreed with that point and said he would have exercised his discretion to order limited disclosure (he upheld the appeal on what he called a ‘technicality’ that had little bearing on the disclosure issue).

Defendant firm Keoghs, which represented Allianz, said the High Court’s ruling was a landmark upholding the requirements that credit hire organisations must properly address the issue of the claimant’s finances at a pre-litigation stage.

Keoghs said the judgment represented the culmination of a six-year-strategy to enforce requests for impecuniosity disclosure before litigation proceedings begin. A rule established by the courts some 20 years ago states that only an ‘impecunious’ claimant is entitled to recover the full credit hire rate, rather than being restricted to the rate available from a retail hire company.

The Holt ruling, Keoghs said, means that for the first time financial disclosure should be provided upon a reasonable request and if not the court can order pre-action disclosure.

Gary Herring, partner and head of credit hire strategy at Keoghs, said the case is likely to have wide ramifications for the credit hire industry.

‘We would expect the unhelpful practice by some large credit hire organisations of avoiding addressing the issue of impecuniosity at the pre-litigation stage, to immediately stop', he added. ‘A more transparent approach to this issue at an early stage, as is robustly endorsed by this judgment, should have a significant impact in terms of reducing the volume of contested litigation and remove a large element of cost from the process, for the benefit of all parties.’

Nick Kelsall, head of motor claims at Allianz Commercial, said Holt will bring much needed transparency to the process by requiring credit hire organisations to show evidence of impecuniosity. He said: ‘Personal injury claims have seen significant reform in the last decade, but credit hire remains a relatively unregulated field where opportunistic practices have added significant expense to motor claims and ultimately to motor insurance premiums in recent years.’


This article is now closed for comment.