The Court of Appeal has given definitive guidance that credit hire organisations are responsible for the costs of unsuccessful litigation. Previously, they were sheltered from the costs of such litigation due to the Qualified One-Way Costs Shifting protection of the claimants.

The Court of Appeal ruling was in respect of cases including Tescher v Direct Accident Management Limited and Axa Insurance UK PLC v Spectra Drive Limited, which was recently added to the appeal.

Ryan Lewis, head of credit hire at Admiral, said: “We welcome the Court of Appeal’s unanimous decision, which supports a fair and balanced approach to credit hire claims. This outcome reflects years of hard work and strategic collaboration with HF and reinforces our commitment to doing the right thing and delivering for our customers.”

Deb Talbot, senior operational manager at Axa, added: “This judgement represents a significant step forward for both Axa and the insurance industry, bringing legal recourse for costs in line with the economic realities of credit hire litigation.

“By recognising that credit hire organisations are the primary beneficiaries in these claims, we are reinforcing our commitment to fairness and transparency. This ruling places the responsibility for unsuccessful litigation costs on the CHOs, which we believe will foster a healthier environment and deter unmeritorious or exaggerated claims.”