Helphire has struck a conciliatory agreement with insurer Direct Line to settle all of its outstanding credit hire and credit repair claims – totalling around 1,000 cases.

The deal is believed to be the first of its kind between an insurer and Helphire, which is seeking payment for its backlog of 20,000 cases tied up in the court system.

In a further significant move, Helphire has agreed to abide by the terms of the Association of British Insurers' code on credit hire for paying all future claims involving Direct Line policyholders.

The agreement marks a break with Helphire's previous policy of fiercely contesting disputed credit hire cases with insurers.

Commenting on the deal, Helphire chief executive Michael Symons said: “It is clear that there has been a change in attitude on both sides and we have now found the basis for a way forward.”

He added that Helphire was also in talks to reach a settlement with other insurers, however he declined to name these parties.

Symons defended Helphire's previous hardline negotiating tactics and said they had paid off. “We had to take a hard-line stand initially in order to get to a position where there was an incentive for insurers to settle.”

He would not disclose the cost of the settlement with Direct Line. But he would say it had offered Direct Line a discount for its volume of around 1,000 cases.

Symons said that Helphire would reveal the cost of writing off these cases in its next interim results ending September 30, for which it is expecting to announce a small loss.

Miles Russell, head of corporate affairs at Direct Line, said: “We are not prepared to disclose the exact details of the settlement at this stage as this may affect finer negotiations between Helphire and other insurance companies.”