Intervention in vehicle and credit hire claims – a knockout blow?

What is an intervention letter?

Following a road traffic accident caused by the negligence of one of the drivers, often a replacement vehicle is offered to the non-fault driver while their vehicle is being repaired. The replacement vehicle may be offered on a credit hire basis meaning the non-fault driver does not have to pay for the hire at the time. For more information about credit hire, see our brief guide on credit hire.

After the period of hire ends, the non-fault driver or the hire company (in a credit hire case) typically seeks to recover the hire costs from the insurer of the driver who caused the accident. To avoid meeting these costs, some insurance companies will offer the non-fault driver their own courtesy vehicle instead, at no charge. They make this offer by sending the non-fault driver an "intervention letter".

If the non-fault driver unreasonably refuses the offer of a courtesy vehicle, and continues to hire a vehicle, paying for it themselves or accepting a vehicle on credit hire, they will not be able to recover those hire costs from the insurer of the at fault driver. However, for an intervention letter to be effective, it needs to meet certain criteria.

What criteria must an intervention letter meet to be effective?

For an intervention letter to be successful, sufficient information must be provided regarding what is being offered so the driver can make an informed decision on whether or not to accept the courtesy vehicle.

Due to a lack of Scottish case law on the subject, Scottish courts and practitioners often turn to decisions from the courts of England and Wales for guidance. To date, the English courts have taken a restrictive view on what constitutes an effective intervention letter. The leading case is the Court of Appeal decision in Copley v Lawn [2009] EWCA Civ 580 which states that the intervention letter should:

Outline the cost of the courtesy vehicle to the insurer;
Offer a similar vehicle to the hirer's own;
Be clear, simple and concise;
Avoid a threatening tone;
Avoid requests for information;
Arrive with the non-fault driver either before they have entered into a hire agreement or during the hire (such that they should be in a position to stop the hire and be provided with the courtesy vehicle without issue).

The key consideration for the court in Copley, when assessing whether an intervention was effective, was whether the non-fault driver was provided with sufficient information to enable them to make a "realistic comparison" between the at fault insurer's offer and the hire costs which they were about to incur. If not, the court considered it to be reasonable for the non-fault driver to reject the insurer's offer.

At fault insurers may also try to contact the hirer by phone rather than letter. If an intervention offer is made over the phone, it will still require to meet the criteria set out above. However, insurers should be careful about making intervention offers via telephone, particularly given the court's view in Copley that the 'cold' telephone call made to the claimant was inappropriate. Insurers should also ensure the call is recorded in order to evidence the call was compliant.

What happens if an intervention offer is not accepted?

If a compliant intervention offer is not accepted, the non-fault driver may still be able to recover hire costs but only to the level outlined in the intervention letter (i.e. what it would have cost the insurer to provide a courtesy vehicle) or basic hire rates (i.e. the cost of hiring the vehicle on the open market ) - whichever is lower.

A non-fault driver can still pursue recovery of the hire costs if they received an intervention letter that did not meet the Copley requirements above or, if they can show that they simply did not receive it.

Resources for further information

If you have any questions about credit hire claims, please get in touch with our insurance lawyers, or your usual Brodies contact.