The Home Office had little choice but to back down on vehicle recovery charges
The Home Office tried to play down the scale of its capitulation over vehicle recovery charges, but it represents a significant victory for the insurance industry. The range of charges that were initially proposed would have seen insurers pay up to £8,400 each time a vehicle was removed from the roadside. This would have been a massive increase on the current charges – which already cost the industry £50m a year. As well as sky high charges, the Home Office had proposed a range of scenarios, upon which the charges would be based, which experts condemned as ridiculous.
This victory shows that the industry can make its voice heard, and can make the government change its mind. In a statement to Insurance Times, the Home Office said: “In deciding on the final charges we took into account other suggestions, especially from those with a professional knowledge of the issues and those backed by objective advice. We believe that the final charges represent the most reasonable outcome that at present can be achieved for everyone.”
In other words, the sheer anger of the insurance industry at the original proposals, and no doubt the threat by 25 leading insurers to seek a judicial review if the proposals went ahead, won the day. With numerous other pieces of legislation that will affect the market now passing through Westminster – such as Lloyd’s reform, the consultation on mandatory commission disclosure and the reforms to the personal injury claims system – it is a valuable precedent to have.
