Accident Exchange challenges “factually incorrect” evidence

Accident Exchange has threatened to sue Autofocus after it claimed it has evidence that lower than expected spot hire rates provided by Autofocus for court cases “may either have been factually incorrect or dishonest”.

Accident Exchange said: “Over the last nine months, insurers and a large number of solicitors acting for insurers, have increasingly used Autofocus to submit reports as to the spot rates in individual cases in an attempt to challenge the commercial rates charged by credit hire companies such as us.

“Typically, these reports are transformed into witness statements supported by a declaration of truth and are submitted to the Courts as evidence of the spot hire rate which the insurer of the 'at fault' driver alleges the Court should award.

Diligence not applied

“It is right to expect that any such report properly identifies a number of suppliers locally who were in existence at the material time, had the vehicles available to hire from their fleet at the relevant time and who were capable of hiring the vehicle in question to a retail customer at an identified rate.

“If diligence has not been applied to the enquiries carried out in the market survey, there is a risk that evidence before the Courts will be unreliable.

“Testimony given by employees of Autofocus on spot rates has been accepted by the Courts with increasing frequency over the past nine months. At the same time, the acceptance of that evidence has impacted the percentage recovery level of the Group's commercial hire charges arising from claims settled in litigation.

Lower payment from insurers

“The Board now believes that this issue was a contributory factor to both the exceptional settlement adjustment reported in the financial statements for the year ended 30 April 2009 and to the slower payment profiles arising with certain insurers.

“For some time the Group has undertaken its own review of the hire rates available from traditional rental companies to ensure that our charges are in line with those spot hire rates.

“Whilst it was clear to us that the Autofocus reports did not always compare 'like-with-like' in terms of the rates applicable for drivers with points on their licence, younger drivers and the various insurance excess and waiver charges that might be applicable from a traditional hire company, it was also clear that many traditional hire companies simply could not supply certain categories of vehicles (for example, prestige models) or that the rates quoted were in marked contrast to those quoted in Autofocus reports.

“This led us to question the accuracy of the Autofocus submissions.

New investigation

“Following a rapid investigation which commenced on 27 August 2009, the Board has obtained a substantial amount of direct evidence which supports the conclusion that some of the evidence submitted on behalf of defendant insurers in order to challenge the Group's hire charges is, at best, factually incorrect and, at worst, dishonest.

“These are very grave allegations which were first made before the Court in the case of Glossop vs. Christian Salvesen Logistics on 8 September 2009. The allegations, supported by further evidence obtained by the Group as a result of its ongoing investigation, are being deployed on a case-by-case basis where there are concerns about the veracity of the submissions made by Autofocus.

“The Group is now also in the process of taking more formal steps in the High Court to secure pre-action disclosure from Autofocus as part of an action for damages. The action may be extended to a number of individuals employed by Autofocus.”

Accident Exchange's comments were announced to the UK Stock Exchange this morning.

Autofocus was not available for comment this morning.