Aviva among trio of insurers to win legal battle against CHO

Aviva is among three insurers to have won a test case against a credit hire organisation (CHO) on the issue of non-party costs orders.

The group action concerned four separate claims with the same CHO. It also involved the same claimant solicitor, both of which were owned by the same holding company.

On behalf of the insurers, law firm Keoghs brought applications to join the CHO involved to the proceedings and for a non-party costs order to be made.

This forced the CHO to meet the costs of each claim instead of the claimants.

Keoghs also sought to join the applications to proceed as a group action, given the common factors in the claim.

“Considerable evidence was heard demonstrating that the CHO and its holding company were the true drivers and beneficiaries of the claims, including that they exerted a substantial degree of control over the entire process,” Keoghs said.

Result

Finding in favour of Keoghs, HHJ Saunders allowed the applications and ordered the CHO to pay the insurers costs in each of the four cases.

The CHO involved declined to appeal.

“This is not only a victory for the industry but the consumer as well who are often indirect victims,” Gary Herring, partner and head of credit hire at Keoghs, said.

“The reality is that the credit hire organisation is the primary beneficiary of and controlling influence over the claim, with the claimant often having little real choice about or influence over the proceedings being pursued in their name.”

James Driscoll, senior claims manager for motor damage and credit hire at Aviva, added: “This ruling is significant in that it will hold CHOs to account for driving unnecessary cost and litigation into the motor claims process and should ensure that the customer is the primary beneficiary of services provided.

“Enabling insurers to recover legal costs from CHOs for bringing unmeritorious claims should cut the number of such cases, reducing pressure on insurance premiums.”