Credit hire companies' shares suffered a battering on the stock market following CIS's decisive victory in the Dimond v Lovell credit hire case.
The House of Lords decided the concept of credit hire was sound but ruled Vanessa Dimond's credit hire agreement with 1st Automotive, now owned by Helphire, was not enforceable as it did not comply with the Consumer Credit Act. The law lords also said the credit hire industry's replacement vehicle charges should not exceed the spot rate for ordinary car hire.
The British Association for Accident Car Hire estimates the case will cost the credit hire industry £200m and could have a devastating effect on smaller credit hire firms.
Helphire's shares lost almost two-thirds of their value after slipping from 189p to 64.5p on Friday, the day after the House of Lords' ruling.
Helphire has been declared the winner in the first two credit hire cases heard post Dimond v Lovell, at Chester and Newbury county courts. Accidentcare group was another credit hire company whose shares slipped by 20p to 69.5p. But it said it was confused by the shares fall since its Lumacare subsidiary has been appointed to manage the ABI's car hire scheme for non-fault accident victims set up last September.
The ABI and MULRA welcomed the law lords' judgment for clarifying the position of motor accident victims who need a replacement vehicle while their own is being repaired.
