By Jemma Lewis & Rhys Pousette
|Published 16 September 2026
This claim was dismissed saving of £65,466.85. Following the dismissal, we pursued a non-party costs order application against the credit hire organisation that stood to benefit from the principal heads of loss. The matter was resolved before the application reached a substantive hearing, with the insurer recovering a further £8,535 in costs.
The proceedings arose from a collision between a motorcycle and a car driven by the insured. The insured was a senior public official in Gibraltar insured by Direct Line Group.
The claimant alleged that the insured had emerged from a petrol station into the path of the motorcycle, causing a collision. The insured provided a materially different account stating that his car was stationary when the motorcycle passed a line of traffic and collided with him in a slow and controlled manner. The insured’s evidence was that the contact was minor and inconsistent with the circumstances subsequently advanced by the claimant. Following a detailed assessment of the evidence, fundamental dishonesty was pleaded. Liability, causation and quantum remained firmly in dispute throughout the proceedings.
The pleaded claim included £36,704.65 in credit hire charges, together with storage, recovery and associated charges. Including the anticipated claimant legal costs, the total financial exposure was assessed at £65,466.85.
The claimant failed to serve a witness statement and shortly before trial, applications were made seeking relief from sanctions, an adjournment and permission for the claimant to give evidence remotely. Those applications were refused.
The court concluded that the procedural breach was serious and significant, that the application had not been made promptly and that no adequate explanation had been provided for the claimant’s failure to engage with the litigation and comply with the deadline for serving evidence.
The court also recognised that granting relief would require the trial to be adjourned, delaying the final resolution of the claim and causing disproportionate inconvenience to the court and other users. With no admissible evidence from the claimant who also did not attend the trial, the claim was dismissed in full.
The claimant had pursued substantial credit hire and associated losses, meaning that a significant proportion of the claim was advanced for the financial benefit of the credit hire organisation.
The credit hire period extended to 169 days and the hire charges alone totalled £36,704.65. When the related storage, recovery and other subrogated losses were taken into account, approximately 95.4% of the pleaded claim were said to be for the benefit of the credit hire organisation.
Following the dismissal, the credit hire organisation was joined to the proceedings for costs purposes and directions were made for a non-party costs application. Our application relied on the organisation’s substantial financial interest in the litigation, the terms of the credit hire agreement and its involvement in the appointment of the claimant’s solicitors and pursuit of the underlying claim.
The application was informed by the Court of Appeal’s decision in Tescher v Direct Accident Management Limited [2025] EWCA Civ 733. That decision provides guidance about when a credit hire organisation may properly be required to meet a successful defendant’s costs where it was the financial beneficiary of the unsuccessful claim. Permission to appeal the decision to the Supreme Court was subsequently refused.
The non-party costs application was resolved without the need for the scheduled hearing, resulting in the recovery of £8,535.
The clear and detailed evidence that the insured driver gave was crucial to the ultimate success of the defence.
If you are an innocent driver and suspect that a collision may have been deliberately induced, personal safety should be the priority. Only where it is safe to do so, photograph/video the overall scene, the position of the vehicles, the damage to both vehicles and the number of occupants, and preserve any dashcam footage.
You should exchange only the information required after a collision, including name, address, vehicle registration and insurance details, and should not allow their driving licence to be photographed.
You should also make a clear contemporaneous note and/or voice recording of exactly what happened, what was said, descriptions of the other driver, any passengers and or witnesses, including any distinctive features of speech such as an accent. The incident and any suspicion of fraud should be reported promptly to the police and the driver’s insurer.
You should avoid admitting liability, confronting the other driver with an allegation of fraud, paying cash or providing bank details at the roadside.
This claim highlights the importance of taking detailed evidence from the insured driver and a robust approach to pre-litigation claims handling and litigation strategy.
The impact of claims like these extends far beyond the cost of individual instances. Claims like these contribute to increased insurance premiums for other innocent road users, additional strain on blue light and medical services, inconvenience to other road users when the aftermath is being dealt with, wasted court time and needless legal costs. By challenging questionable claims and pursuing those who drive litigation for commercial gain insurers can help protect both their genuine and innocent customers and the integrity of the claims process at the same time.
Non-party costs orders are becoming an increasingly important mechanism in costs recovery. Our team has secured a number of successful recoveries following non-party costs orders and this case reinforces the willingness of the courts to scrutinise who is really benefiting from litigation. Where a hire company has a substantial financial interest in proceedings, insurers should consider making a non-party costs application to enhance the overall outcome. At a time when fraudulent and opportunistic claims continue to place pressure on the market, identifying and pursuing all available avenues of recovery has never been more important.
"I was extremely grateful for the support I received from my insurer throughout this process. From the outset, I was clear that this was a claim that needed to be defended rather than settled as the incident itself and the subsequent claims were so outrageous they could not justified. My belief at the time was that it was a rider seeking compensation following a collision they had staged. However, as the case progressed, I became aware of the far larger scale of challenge that the motor insurance industry is dealing with. Looking at this case, and others like it (including at exactly the same location a few days later) it seems that lone women drivers can feature disproportionately as the intended victims of these types of claims. That is a concern for all motorists, as is the amount of additional premium being charged on the back of these claims. Honest motorists should not feel pressured into accepting responsibility for something that is not their fault; everyone needs to be aware this could happen to them. The evidential material gathered at the scene, followed by excellent working with the insurer, then a robust defence by an experienced barrister, ultimately ensured that a just result was achieved in Court. What initially looked like an isolated compensation claim ultimately exposed a wider network of commercial interests, underlining the importance of challenging suspicious claims rather than simply paying them an out of Court settlement”.
Claire Laver – Head of Fraud - CSG
"Anyone can be a victim of fraud, it is a borderless, often faceless crime that leaves victims with a feeling of frustration, anger and anxiety. Thankfully, the insured driver in this claim was able to provide very strong evidence to refute the allegations and was determined to ensure that the claimant didn’t get away with the fraud against him and his insurer. People think that fraud is a victimless crime, it isn't. The impact goes beyond the individual inconvenience and stress of having to be involved in the claims process. It places an increasing burden on public institutions such as blue light services, hospitals, GP surgeries, benefits system, courts and insurers who have to spend millions of pounds every year defeating attempts to defraud them and their customers."
