Credit Hire Reform Shelved

The issue of credit hire reform has been debated for many years. As an area of major leakage for most insurers, it was anticipated by some that given the substantive reforms to bodily injury claims in the so called “whiplash reforms”, credit hire reform was bound to follow.

The MOJ has published the long-awaited response to part two of the “whiplash reforms” consultation.

The responses were submitted five years ago, and things have moved on. The MOJ has decided that on the two key issues of credit hire and rehabilitation, they will not make any concrete changes but instead will continue to monitor and work with stakeholders.

For credit hire, consideration will be given to making industry agreements mandatory, although this would need primary legislation. In the meantime, the GTA aids credit hire agreement, and individual protocol arrangements between CHOs and insurers act as a useful curtailment of litigation.

The whiplash reforms already implemented have encouraged credit hire litigation, now seen by many as a more valuable revenue stream, and the increase of credit hire and vehicle damage related fraud is very much an issue for insurers.

We will be addressing these issues and others with clients at our Credit Hire Forum next week.

For more information about our credit hire services please contact Darren Mendel