A claimant is facing a bill of over £400,000 in credit hire charges plus legal costs after a county court found that the car she collided with was stationary.
John Gibson, motor services director at Keoghs, said the case of Susan Clare Harries was the “most extreme” he had come across in 20 years.
However, he said Keoghs had 25 other credit hire cases where over £100,000 was being claimed from insurers. In four cases, the amount was over £200,000.
“I’ve seen cases where £200,000-£300,000 has been claimed, but that’s normally because a prestige vehicle is involved, costing £1,000 a day. This was an Audi.”
Mr Gibson said he was concerned that even though the defendant insurer, Aviva, told the claimant “right at the outset” that liability would be “strongly denied”, the claimant continued to hire the car for a “huge sum of money” over a period of almost three years.
“We believe this is part of an emerging trend among elements of the market where insurers are being held to ransom by a credit hire company for an incident they are not liable for.
“The vast majority of credit hire providers provide a valuable service to people who need mobility. It’s only a minority who are willing to charge these sums.”
Delivering judgment on liability at Nottingham County Court in Harries v Baguley, Recorder Edis QC said the collision occurred in Sutton Coldfield in December 2016.
Although no-one was hurt in the collision, the claim had a high value because the claimant had been hiring a replacement vehicle for two years and nine months.
He said the claimant’s Audi was recovered by a garage in Lichfield, who put Ms Harries in touch with Direct Accident Management, the source of her replacement hire car.
Having heard the evidence on liability, Recorder Edis concluded that the defendant had “indeed parked his care lawfully” at the side of the road to examine its tyres.
Mr Baguley was “not in his car at the point of impact, still less reversing” and “his car was in fact stationary”.
The recorder went on: “The claimant drove into it through negligent driving. I do not need to find an explanation for this, for all or most drivers are from time to time inexplicably careless, but I suspect that her view was not as clear as she claims it was.
“The defendant bears no blame for the accident.”
Recorder Edis ruled that there would be judgment in favour of the defendant. He invited the parties to agree costs.
Mr Gibson said the claimant could have relied on her own car insurance policy to cover the cost of the damage and been back on the road in a month.
He said the government had promised to look into the credit hire market as part of its whiplash reforms, but they had been consigned to phase two, and “in the current climate” nobody could be sure what would happen.
Mr Gibson, who worked with the Association of British Insurers on the Competition and Markets Authority investigation into private motor insurance, said the authority believed credit hire only added “a few pounds” to premiums.
“I am concerned for the vulnerable consumer in a case like this,” he said. “A claim of this size is life-changing.”
He added that there should be tighter regulation of the credit hire industry, with more “checks and balances”, so the ability of consumers to accumulate huge charges was linked to their ability to pay them.