Credit hire conundrum the industry’s issue to solve

The government’s decision not to address the credit hire conundrum within claims as part of its whiplash reforms surprised some when it was announced earlier this year, but the industry itself is in the best position to make the necessary changes.

This was the view of a forensic and frank panel debate held during a ‘Credit Hire Conundrum’ debate at ILC’s Exclusive Motor Claims Conference, which took place a Landing Forty Two in London during October.

Taking part in the far-reaching conversation were Chris Ashworth, Founder, ILC; Charles Layfield, Founder, ACSO; James Driscoll, Senior Claims Manager, Motor Damage & Credit Hire, Aviva; and Simon Gallimore, CEO, EDAM Group.


They agreed that while the GTA, established in 1999, should remain as the industry’s ‘code of conduct’, it was in many ways dysfunctional now and needed updating to be fit for the 21st century.

Charles said, “The code of conduct is the GTA. The government and the FCA have no interest in getting involved in this sector unless they have to. So the only option is to improve the GTA. But I don’t think that’s a bad thing. Markets that regulate themselves generally have the best outcome. When governments intervene they are not subject experts.”

Self-regulation can be a difficult nut to crack, with all stakeholders presenting different and sometimes conflicting arguments.

However, the fact that the industry was able to agree new interim rates, albeit after nearly two years of discussion, suggests that the willing is there and James believes that further progress towards a more lasting solution can be made, and made fast, early in the new year.

Simon agreed: “The last thing you want is lots of friction and lots of operational costs and claims being open for far too long. But we are back in the room talking to each other. We’ve had some really constructive conversations over the last few months about changing things together and I’m really hopeful.”


However, Chris warned that true market evolution was perhaps more complicated than some think, arguing that simply focusing on rates was to overlook deeper challenges.

He said, “It’s a price not cost mentality that’s been amplified by current market conditions, whether that’s price of vehicles, vehicle supply or length or rental. People get focused on rates, but when you think about the total cost of credit hire there is so much more to it.

“So while I’m also optimistic about the future, I think the GTA is hanging on by it fingertips but the interest is there to move things forward.”


Possibly one of the key obstacles to further progress is an inbuilt mistrust between insurers and credit hire companies. The panel admitted there is still an adversarial approach in some cases, and ‘legacy thinking and entrenched opinions’ need to be abandoned.

Chris suggested that one solution that might help provide clarity going forward would be agreeing a rate that was beyond dispute, and then adjusting it annually according to market conditions.

Of course, establishing new frameworks that suit all parties is no easy task and as long as there is no hard deadline there must remain the fear that conversations will drag on until they peter out and no resolution is found – at which point the government may be forced to intervene.

However, the panel agreed there is a recognition that the system is broken and that it was up to the industry to fix it before the worst-case scenario presented itself and the Ministry of Justice stepped in.

Simon said, “If it’s not sorted by 1 July 2023 then I don’t think it will ever be sorted. But I do think we’re close.”


Close to what though? The panel discussed what a good outcome to the GTA reforms would be, and agreed that first and foremost it needs to be something the industry wants to be a part of. While it can’t be mandatory unless it is government regulated, it needs to be respected by all stakeholders and recognised almost as an industry ‘kitemark’.

Chris said, “We have to make it so compelling that we get to a point where no right-minded insurer would consider a supplier who wasn’t operating within the kitemark.”

And, to ensure it remains robust there needs to be independent governance, ongoing auditing and consequences for those who fail to comply.

James concluded, “Ultimately, what we’re looking for from the GTA is speed of process, lack of friction, cost certainty and speed of payment.”

ILC’s Exclusive Motor Claims Conference was headline sponsored by Enterprise Rent-A-Car, and sponsored by EDAM Group and LexisNexis Risk Solutions.


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