Car Insurance and Credit Hire Organisation

confusedbylawyers

A few months ago my neighbour and I, by total coincidence crashed cars as we both left our drive at exactly the same time on the school run. We both agreed neither were at fault, did not call the police, and we put this in our statements.  I did however suggest the low lying sun could have been partly to play.

Our insurer paid in full inclusive courtesy car but minus the excess a few weeks later. They wanted us to accuse our neighbour of fault to recover the excess but we refused thinking £500 was something we could handle vs an argument with our (lovely) neighbours. The lawyer said if they claimed the excess back we could counterclaim at a later date and it was not a big deal.

We explained this when our neighbour contacted us a couple of months later saying their insurer wanted them to appoint a lawyer as our insurance were not responding and did not answer calls. They were not aware exacly what is was about so ignored them.

Now 4 months later we receive a letter from a lawyer appointed by our insurer saying our neighbour is taking us to court for a £15,000 claim, most of which is for credit hire. I cannot understand this lawyer who mumbles a lot. My neighbour said they thought they were signing documents for their insurance to basically force our insurer to communicate with them, not specifically for them to directly sue us via our insurer (if that makes sense).

Our lawyer says specifically it's our neighbour suing us not the insurance company (as they are refusing to reimburse them for hire car) and believes that from what I have told them the credit hire company may have mislead my neighbour to get us to pay their prohibitive hire costs. They say if I do not go to court and accept liability our neighbour will not be reimbursed, and that if we settle out of court our insurer will probably only agree to pay 50% of our neighbours car hire anyway as the costs are so high.  The lawyer said off record it was a sort of scam.

I feel terrible for my neighbour and wonder what I should be doing to minimise the damage. This lawyer is now saying that she also acts for our insurer and our neighbour may be forced to pay all expenses based on what I have told them.

If anyone can make head or tail qs to what is going on please advise!!  TIA

Sandtree

There is no such thing, in insurance terms, as a no-fault accident... it sounds like you are saying you were both equally to blame and so would be a 50/50 claim meaning each insurer settles 50% of the other side's losses... ie you should get 50% of your excess back as your neighbour would get 50% of theirs.

In any accident it is always the two drivers against each other, even if the matter is handed over to insurers or accident management companies. Were the credit hire company to sue you in your neighbours name you'd just hand everything back over to your insurers and they would respond on your behalf. 

Your neighbour's liability, as long as they continue to support the process, is almost certainly capped at whatever the courts say you/your insurers owe and so is extinguished by the payment by your insurers following the court order. If they (your neighbour) decide they dont want to sue you then that's when they become liable.

In the first instance you should talk to your insurers and advise them you are receiving the calls/letters from the credit hire company/their solicitor after they have failed to respond... you can give them some grief about the fact they should be representing you in this matter. 

Outside of that its up to you/your neighbour if you both support your respective sides and so its only the firms that lose the money or if the neighbour refuses to have you sued and maybe the two of you come up with an amicable way to deal with the hire bill... personally I'd do the former 

confusedbylawyers

@Sandtree I think this could have happened as we refused to accuse them several months ago, and now something well meaning has become a nightmare.

I believe they have no choice but to sue us for full payment as this lawyer told me our insurer would only pay 60% of the claim and says that our neighbours would most certainly be thousands out of pocket. She suggested it was a sort of scam and their insurers would also refuse to pay them (although neighbour said they had fully comp).

 It seems the only choice is for us is to reluctantly say we are liable (which we genuinely don't believe) or our neighbour won't be reimbursed. If that happens do we also end up paying thousands? Lawyer suggested we were in big trouble.

Sandtree

confusedbylawyers said:

@Sandtree I think this could have happened as we refused to accuse them several months ago, and now something well meaning has become a nightmare.

I believe they have no choice but to sue us for full payment as this lawyer told me our insurer would only pay 60% of the claim and says that our neighbours would most certainly be thousands out of pocket. She suggested it was a sort of scam and their insurers would also refuse to pay them (although neighbour said they had fully comp).

 It seems the only choice is for us is to reluctantly say we are liable (which we genuinely don't believe) or our neighbour won't be reimbursed. If that happens do we also end up paying thousands? Lawyer suggested we were in big trouble.

I'd question the experience of your lawyer... clearly neither I nor your lawyer have seen the credit agreement signed but as already explained, these typically state that if you were found 60% liable then your neighbour is only liable for 60% of the bill which your insurers pay, the remaining 40% is then written off. 

Typically the only time its not written off are in cases of fraud or where the hirer ceases to support the company in their recovery attempts.

At the end of the day your insurers will decide if they are willing to admit liability or not, for you the only difference would be that you cannot recover the 40% of your excess (assuming the 60/40 split) but impact on future premiums, ncd etc are the same if you are 60% or 100% to blame.

400ixl

Your neighbours will have engaged a claims handling company (probably without realising) and under the terms of their conditions they are obliged to fully co-operate with that company in pursuing the recovery of any costs. The usual big win for these companies is supplying the claimant with a car during the claim at a very profitable rate.

As your insurer has refused to pay out, they are obliged to support the claims company in taking you to court, if they do not support them, then they become responsible.

An unfortunate mess and the sort of scenario these claims management companies create through the way they work. You need to advise your insurer of what is happening so that they can take control.