In a landmark ruling, the Court of Appeal has confirmed that credit hire organisations can be ordered to pay defendants’ legal costs when credit hire claims fail. This outcome stems from the Tescher v Direct Accident Management Ltd case, where non-party costs orders were sought against credit hire companies that had initiated litigation.
Lord Justice Birss held that credit hire companies were effectively the real parties to the claims, noting that litigation was often the only realistic route for them to recover deferred hire charges. As such, they should bear the consequences when those claims are unsuccessful. In the Tescher case, 100% of the defendant’s costs were awarded, while in the joined case AXA v Spectra, the credit hire firm was ordered to pay 65% of the costs.
The decision is expected to have wide-reaching implications, particularly for firms like Anexo Group (trading as Direct Accident Management Ltd), which litigates over 1,000 credit hire claims annually through Bond Turner solicitors. Defendant firms have welcomed the judgment, anticipating it will discourage weak or inflated claims and bring greater accountability to credit hire organisations.
For further details, read the full article: Insurers hail ruling that credit hire company was the ‘real instigator’ of claim
