Fraudulent Credit Hire Claim: Insurer succeeds in its claim for damages for deceit, indemnity against dishonest driver and declarations of non-cover
2 May 2018
Alex Glassbrook (instructed by Andrew Baker of Horwich Farrelly) represented the successful motor insurer. A claim for credit hire charges exceeding £80,000 had been claimed in relation to a vehicle allegedly damaged beyond use in a road traffic accident, and judgment had been obtained on that claim against the allegedly insured driver, without notice to his insurer.
Investigation by the insurer showed that the allegedly unroadworthy car had continued to be driven significant distances and had passed MOT tests during the hire period, so contradicting the alleged need to hire a substitute.
The insurer served documents showing that the vehicle of the allegedly negligent driver had been disposed of by its insured before the start of the relevant period of insurance, so was not insured by it at the time of the accident, and showed that the former claimant’s solicitor had failed to give it the notice required to trigger its compulsory insurance obligations under the Road Traffic Act.
The insurer made its own claim in deceit against the driver and obtained default judgment after the driver stated that he would serve a defence then failed to do so. The Circuit Judge was satisfied that the representations made by the claimant driver as to the credit hire claim had been entirely false. The Judge applied CPR 3.10 to correct the procedural error whereby default judgment for the insurer had been obtained by request instead of application and upheld the insurer claimant’s default judgment on the claim in deceit. The declarations of non-cover and an indemnity against any liability as Road Traffic Act insurer were allowed and the Judge assessed as damages the claimant insurer’s in-house expenses and legal costs of investigating and dealing with the dishonest claim. The Judge awarded the claimant insurer its costs of the present proceedings, summarily assessed on the indemnity basis. The Judge was critical of the driver’s solicitors for their conduct of the underlying claim.