At Fault Insurer won't pay hire charges

sundancesquid

I'm a Taxi Driver, Non fault accident inDec 2010, at fault insurer accepted liability. Claims management company sorted everything out, and provided a licensed taxi hire car.

My taxi was total loss,accepted their offer immediately, but waited nearly 3 months for the cheque.There was no injury claim.

I am now receiving letters from the hire company solicitor, explaining that the at fault insurer wont pay the hire charges. They are asking me for financial bank, savings,credit card and mortgage statements, so they can prove that I couldnt afford to hire a taxi myself. and implying that if I don't cooperate then due to mysigning of the Contract Hire Agreement, I will ultimately be liable for the cost,which I am told is £17,000! This is more than I earn in a year!

I was under the impression that this hire taxi was the way to keep my losses at a minimum,since I was never informed of the cost of the hire, why would I be, after being told that the at fault insurer is billed for the cost

For me to raise the 4 months worth of bank statements that they want, my bank will charge £40

What should I do? and Should I be worried?

Also the Solicitor appears to live in the same street as the hire company, leading me to believe they are both part of the same group.

Thanks

vax2002

Your first port in this storm is to carefully read the contract you signed.

InsideInsurance

Is your turnover or profit under £17,000?

Obviously the hire only keeps costs to a minimum if the hire rate is below your income rate. £17k as profit sounds a bit low for a full time taxi driver and would be very low if thats your turnover.

Ultimately you need to read what you have signed as to what you are liable for if they are unable to recover their costs from the TPI. On the surface of it there doesnt sound to be a good justification to spend more than a years earnings on 3 months hire plus I would be asking why it took 3 months for settlement.

Many companies dont charge you for anything as long as you are honest and cooperate with them but you need to read what you signed to confirm as some do recover shortfalls from the hirer.

Most banks max statement costs at £10 for individuals as otherwise you just do a DPA SARs request which legally they can only charge £10 for but as a business (presumably a sole trader) you really should be keeping statements anyway!

McKneff

Sign up for online banking and just print your own statements.

cajef

I had the same problem years ago, mine was written off by a clown coming straight out of a minor road onto a main road without looking or slowing down and I had witnesses to the accident, I had to have a hire car to carry out my employment, his insurance refused to pay for it.

At the time I had legal protection with the RAC, for a ten pound fee they employed a solicitor then they were threatened with court action and a barrister was employed, three days before the court case they capitulated and I received a cheque for the full amount from the insurance company.

sundancesquid

Thanks for the swift replies, Annual profit about £15,500

Already online banking, but since the statements they want ar more than 12mo. old I cant access them and have to order 4 at £10 each.

I'm not that concerned about the £40 for the statements, my bigger concern is do they have a right to ask for them? and can they use them against me if they turn the tables on me.

the rental contract I signed does indeed point out that the ultimate liability falls on me, however I do have a contradictory facts statement that they sent in the first week of contact which I quote:-

"Who pays for the ##### service? You are legally entitled to the service that ##### provides after a non-fault accident, regardless of your vehicles insurance. The bill for any replacement vehicle we provide, or the repairs we organise, are sent to the insurance company of the driver who caused the accident"

vax2002

The statement is worth nothing if it is not on the same sheet you signed and above your signature.
£17,000 ? for how long and what is that a week ?

Spiderham

Before the below, I should say I am not a lawyer and this is not legal advice.

Interesting case law on this is Wattan Singh v Aqua Descaling Ltd (http://www.lawgazette.co.uk/in-practice/benchmarks/driving-a-hard-bargain-ins-and-outs-hire-claims).

The idea stemming from this is that if the profit derived from the hired vehicle is less than the hire cost then credit hire is inappropriate and a loss of profit for a reasonable time should be paid. I would expect a credit hire organisation to be aware of this and not inappropriately to loan a car as the chance of getting the money from a private individual is much less than that of getting it from an insurance company (people have less money than insurance companies).

InsideInsurance

I cannot quote case law as it has been too long since I last had to but there have been cases where the above type ruling has been contested on the basis of long term damage to the business. Ie it is fine to say for 2 months its cheaper to lose business than to hire a car but by not being able to provide a service to regular clients etc for those 2 months you can easily lose them permanently and so the losses are much more than they initially appear.

As to the OP - you need to speak to them and find out whats happening. Are these solicitors working for your credit hire company to recover from the TPI in which they are trying to recover your debt for you or are they alleging you mislead the credit hire company in some way?

If it is the former you ultimately need to have a frank conversation with them about the hire cost -v- income.

vax2002

I think I would be looking at paying a legal expert to read the contract in full and start looking for loop holes.
looks like in effect you have signed as guarantor if the insurance company default.
Which given the eye watering cost, I would say they will be doing.
Preparing yourself for the storm is always best.

Spiderham

vax2002 wrote: »

looks like in effect you have signed as guarantor if the insurance company default.
Which given the eye watering cost, I would say they will be doing.

That is how credit hire works, you incur the liability by hiring the car then you are effectively claiming what you owe to the credit hire company from the third party's insurer. The credit hire agreement is a neat way of packaging it up and not leaving the innocent third party out of profit (an generating profit for credit hire company too). Most credit hire companies do try to prevent this though as it isn't in their interest to have the innocent third party owe them money.

@InsideInsurance - I'm only aware of that one case as I found out about it when I was doing some research into it for some professional exams recently. In that Watton Singh case it wasn't just the amount per week but also the number of weeks reduced. In the OP's case with it being a total loss it's surprising that the credit hire co would get the bill up to £17,000 as once it was obvious the vehicle was a write off, you'd hope it would clear up quite quickly from there.

Rereading OP, it seems the credit hire co are using the £17,000 figure to focus your mind and get you to do all you can to help them out. As you said they are only threatening you if you don't co-operate. If you do, they will either get their money from insurance co, or if there are irregularities/unnecessary delays it will probably be credit hire or insurance company so you'll be fine. My advice is to stay calm and do what the credit hire co ask regarding info, that way you're squeaky clean and you can get rid of the problem asap.