Recovering your Credit Hire Claims Costs

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What is Credit Hire?

Credit Hire claims arise from Road Traffic Accidents and can be an independent claim or head of claim as part of a main Personal Injury action. Credit hire is when the Claimant receives a replacement vehicle for their use whilst their vehicle is in repair from the damage caused to it in the said Road Traffic Accident, and the Claimant does not have the funds to hire a vehicle privately. Alternatively, a replacement vehicle will be used until the money is recovered from the third party to replace the vehicle if the damage is so severe that the vehicle is not repairable.

Credit Hire Claims involve a credit hire agreement with a credit hire company explaining the hire charges during the duration that the hire vehicle is used. The fees incurred for the use of the vehicle under the Credit Hire agreement will be recovered in the main action, usually from the third party insurer if they are found to be liable for the accident.

 

Credit Hire Claims Costs

In Credit Hire claims, the costs which are incurred to use the replacement vehicle can vary and can be fairly high. The receiving party is required to provide disclosure and sometimes expert evidence to demonstrate that the hire rate charged by the Hire rate company is reasonable. Furthermore, the Claimant’s impecuniosity is assessed to ensure that the Claimant was not in a position to pay for a replacement vehicle outside of the Credit Hire, which can sometimes result in less fees being incurred.

 As per Practice Direction 16, paragraphs 6.3 and 6.4, in order to ensure a successful Credit Hire claim, you will need to consider the following:

6.3 Where the claim includes the cost of hire of a replacement motor vehicle following a road traffic accident, the Claimant must state in the particulars of claim:

(1) The need for the replacement vehicle at the relevant time;

(2) The period of hire claimed (providing the start and end of the period);

(3) The rate of hire claimed;

(4) The reasonableness of the period and rate of hire; and

(5) Impecuniosity (if the claim relates to credit hire).

6.4 In paragraph 6.3—

(1) “Relevant time” means at the start of the hire and throughout the period of hire;

(2) The obligation to state the matters there set out includes an obligation to state relevant facts. 

Costs in Credit Hire Claims – What Can be Recovered?

If the claim for Credit Hire is successful, then the third party insurer will be required to pay the Claimant’s costs of bringing the case. Dependent on the facts of the case and the proceedings of the main action, these costs can be awarded under the fixed costs regime under CPR 45 or assessed on a standard basis.

Should your credit hire claim include personal injury, then it is most likely it will fall under fixed costs under the Part 45 Civil Procedure Rules. Whilst the costs will be fixed, disbursements can be negotiated and thus Costs Draftsman assistance may be required to recover these in full.

If the credit hire claim is the only head of claim in the case (or forms part of a wider claim for vehicle damages), it will fall to be assessed on the standard basis. The assessment procedure is governed by Part 47 of the Civil Procedure Rules. Standard basis costs are those allowed on an hourly rate basis which are proportionate and reasonably incurred against the damages recovered, the conduct of the parties throughout the course of the case and the litigation process of the cases.

Standard basis costs include preparing an item by item Bill of Costs incurred while running the claim. This Bill of Costs, if not agreed through negotiations, will need to be served with a Notice of Commencement to commence detailed assessment, may be assessed by a Judge at the relevant the County Court. The Judge will look at the proportionality of the Bill of Costs alongside the damages recovered and the factors as set out in CPR 44.3(5).

 

How Can ARC Costs Assist?

At ARC costs we can help recover your costs for a Credit Hire claim by preparing a Bill of Costs, whether it be under the fixed costs regime or on the standard basis. We can help negotiate the costs and the disbursements incurred to run the case, and our Legal Costs Negotiators will ensure the best possible outcome is achieved. Should the third party not agree the costs presented to them as incurred, we can assist in issuing Part 8 proceedings for costs where the main action has settled pre-issue. We can also deal with the third party’s disputes to the bill and reply to the same, ensuring the legal basis is effectively set out before the Court for seeking to recover the costs as claimed. We also offer representation on your behalf at Detailed Assessment via a fully qualified Costs Lawyer.

If your credit hire claim is especially complex, the claim may be allocated to the Multi Track, under the Civil Procedure Rules a Precedent H Costs Budget will need to be prepared and negotiated to accurately estimate your costs to Trial. 

Should you require assistance on the recovery of your costs for credit hire claims or any other case, please do not hesitate to contact us via the Live Chat facility below, by email at info@arccosts.co.uk, or speak to one of our specialist Costs Lawyers/Costs Draftsman by calling 01204 397302.

What We Do Best

Our dedicated and experienced law costing team provide a wide array of legal costs services.  Find out more by following the links below. 

Bills of Costs

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Costs Budgets

We achieve an average of 81% of the value of the Costs Budgets drafted

Costs Budget Negotiations

Our team have over 20 years of experience in Costs Budget Negotiations. 

CPR 45 Fixed Recoverable Costs

CPR 45 Fixed Recoverable Costs are becoming a more and more common dispute in costs

Legal Costs Training

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Detailed Assessment Proceedings

Our experienced costs team ensure that the best outcome is achieved on every case

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