By Nick Copley, Head of Claims.
The credit hire market has long been a source of friction within the insurance sector. For decades, insurers, brokers, and customers have had to navigate inflated costs, prolonged disputes, and litigation that has often felt driven more by commercial interests than by genuine customer need. A recent Court of Appeal ruling in Yehuda Tescher v Direct Accident Management Ltd and AXA Insurance UK plc v Spectra Drive Ltd [2025] EWCA Civ 733, however, provides welcome clarification and an important step towards restoring fairness and transparency in this complex space.
The Case in Brief #
In Tescher, the claimant sought nearly £20,000 in credit hire charges, even though their personal injury claim failed. The Court found that Direct Accident Management Ltd (DAML) had exercised “tacit control” over the litigation and was the true economic beneficiary. DAML was therefore ordered to pay 100% of the defendant’s costs.
In Spectra, the Court ruled that Spectra Drive Ltd had also exercised significant control and stood to benefit from the litigation. They were ordered to pay 65% of the defendant’s costs.
The principle behind both decisions is clear: credit hire organisations (CHOs) that drive litigation for their own commercial gain cannot hide behind claimants or exploit the protections afforded by Qualified One-Way Costs Shifting (QOCS). If a CHO controls the claim, it must also bear the consequences when that claim fails.
Why This Matters for the Industry #
These judgments should serve as a deterrent to aggressive behaviours that have plagued the sector for too long. Credit hire disputes are often characterised by unnecessarily long hire periods, inflated charges, and tactics designed to push claims into litigation. This not only burdens insurers but also drags claimants into legal proceedings they may not fully understand, or even want to be involved in.
The consequences ripple outwards:
Insurers face inflated claims costs, which ultimately impact their bottom line.
Brokers are forced to manage dissatisfied clients caught in protracted disputes.
Customers bear the brunt through higher premiums and an unnecessarily stressful claims experience.
The rulings in Tescher and Spectra reaffirm the importance of accountability. They underscore that claims should be resolved fairly and efficiently, not manipulated as vehicles for profit at the expense of insurers and policyholders alike.
The Alps Perspective #
At Alps, we welcome these judgments. They align closely with our long-standing commitment to integrity and transparency in the claims process. With over 25 years’ experience in road traffic accident claims and motor legal expenses insurance, we have seen first-hand how poor practices in the credit hire market undermine trust and damage the reputation of the wider insurance industry.
From the outset, we have taken a deliberate stance: we do not enter into referral arrangements with providers whose models risk inflating claims or driving unnecessary litigation. Instead, we select credit hire partners based on clear governance, transparency, and customer-focused processes.
Our approach ensures that:
- Claims are resolved more quickly and fairly. Customers benefit from timely repairs and settlements, not inflated hire periods designed to maximise fees.
- The risk of litigation is reduced. By working with partners who prioritise resolution over confrontation, we protect customers from becoming embroiled in disputes.
- The customer remains at the centre. The claims journey should provide clarity, fairness, and efficiency – not confusion and delay.
The Role of Brokers #
Brokers have a vital role to play in this landscape. As trusted advisors to their clients, brokers are uniquely positioned to influence how claims are managed. By recommending providers who align with best practice, brokers can protect their customers from the pitfalls of poor credit hire arrangements.
Working with add-on providers like Alps means brokers can be confident that their clients are in safe hands. By ensuring that ancillary products and claims processes are delivered with transparency and
customer-first principles, brokers help preserve trust in the insurance ecosystem while also safeguarding their own reputations.
Looking Ahead #
The rulings in Tescher and Spectra are a positive step, but they are not a silver bullet. The credit hire sector has a history of resilience, often adapting quickly to legal and regulatory changes. This means the industry must remain vigilant. Continued scrutiny of who is truly driving a claim, and in whose interest, is essential.
For insurers, brokers, and providers alike, the message is clear: behaviours that prioritise profit over fairness will not be tolerated. Customers deserve better, and as an industry, we must work together to deliver claims solutions that are transparent, efficient, and sustainable.
At Alps, we will continue to champion best practice in this space. We believe that by working with the right partners, maintaining robust governance, and keeping the customer at the heart of everything we do, we can help shape a fairer and more trustworthy credit hire market.
