The credit hire industry has been thrown a lifeline at the expense of insurers by a Court of Appeal ruling that will allow claimants without financial means greater access to compensation.

The deci ...

The credit hire industry has been thrown a lifeline at the expense of insurers by a Court of Appeal ruling that will allow claimants without financial means greater access to compensation.

The decision in the case of Lagden v O'Connor means that the innocent party involved in a car crash would be able to use credit hire companies to obtain a replacement car, if too poor to pay for a hire car and then claim back the expense.

The ruling undermines the Dimond v Lovell [2000] which established the principle that credit hire companies had to stick to the spot hire rates established by the ABI.

However this time the appeal court ruled in favour of Helphire and against Prudential, the two companies behind the legal battle.

Lord Nicholls of Birkenhead said: "Motor insurers and credit hire companies should be able to agree on standard inquiries, or some other means, which in practice can most readily give effect to this test of impecuniosity."

Sources within the credit hire industry welcomed the decision that marked the end of a series of test cases to clear up the legal position within the industry.