The House of Lords is expected to settle the question of regulation in the credit hire industry when it hands down a decision in the Dimond v. Lovell case this week.

Three days have been set aside for the hearing, which began on Monday, after lawyers appealed against a decision by the Court of Appeal last year.

Up to £10 million is said to be at stake over the Law Lords' decision.

Their judgment will have knock-on effects in up to 40,000 credit hire cases which have been held in limbo until after the Lords' hearing.

The case centres on credit hirer 1st Automotive, which has tried to reclaim the costs of Mrs Dimond's post-accident car hire from CIS, which is Mr Lovell's insurance company.

The Court of Appeal sided with CIS and held that the agreement between Dimond and the hirer was regulated by the Consumer Credit Act.

However, that was unenforceable against her or them because it had not been drawn up in accordance with legislative requirements for a consumer credit contract.

Among the five law lords sitting in judgment will be Lord Saville who is taking time out from the Bloody Sunday inquiry to rule in the case.