Northern Ireland

Accident car replacement insurance cases 'too expensive'

Disputes over the cost of replacement cars for not-at-fault motorists in road accidents in Northern Ireland are too expensive, a High Court judge has said.

Mr Justice Stephens said the battle between credit hire companies and insurance firms showed no sign of a commercial or legal resolution.

He was ruling in favour of a not-at-fault Nissan Micra driver whose replacement car cost just under £2,500.

The at-fault motorist argued the rate for 39 days should have been £1,338.


The case before the High Court in Belfast involved a collision on the Camlough Road in Newry in June last year.

The judge said that because the at-fault driver's insurance company is supposed to pick up the bill, the rates involved can be of "complete indifference" to those hiring vehicles.

"I would observe that the present system is cumbersome and that the present costs are disproportionate," he said.

In disputes under the current system, the at-fault driver's insurance company has to establish that an equivalent vehicle could have been hired at a lower basic rate.

"Companies now exist whose sole commercial function is to capture and collate internet details of car hire rates for all the different types of vehicles for each month of each year in every part of the United Kingdom," the judge said.

In response, he said credit hire firms try to show these alternatives are inconvenient or not comparable by highlighting all the differences between the basic hire rates and terms.


Mr Justice Stephens said the outcome in each case depended on the particular facts and the personal circumstances of the driver who was at fault in the accident.

As their insurance company only finds out these circumstances during litigation, the judge said the prediction of outcome and resolution of disputes were impeded.

"Both the credit hire company and the insurer concerned in this particular case, consider that the present system is unsatisfactory and that the costs are disproportionate, though the credit hire company blames the insurance company for the disproportionate nature of the costs," he said.

"My assessment is that the costs are clearly disproportionate, not only in this case but also in the vast majority of credit hire cases."

He added: "The time may have come to look again at whether the approach of stripping out the additional elements in the credit hire rate is legally and factually appropriate."

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