Understanding credit hire can seem quite technical, but once you grasp the principles, it becomes relatively straightforward. The judiciary shares this view, with credit hire of over £10,000 being allocated to the small claims track and credit hire of over £25,000 being allocated to the fast track. The same sentiment is being viewed in MOJ Stage 3 cases.
I was recently contacted by a law firm regarding a Defendant’s attempt to transfer a case to Part 7 because the Claimant had not disclosed bank statements. In their view, the failure to provide bank statements (when the Claimant’s claim was subject to the Hussain v EUI principle) meant the case was unsuitable for a Stage 3 hearing. I shared the same feeling that our esteemed colleague Skelator expressed:-
It goes to show that there appears to be a misunderstanding about how credit hire is dealt with at a Stage 3 and the RTA Low Value MOJ process. So here are tips and tricks on credit hire for RTA MOJ cases.
You still need the same evidence that you would adduce in Part 7 proceedings
Stage 3 hearings have been described as a ‘rough and ready’ system. Evidence is accepted as uncontroverted (unless the opposing party has appropriately uploaded contradicting evidence). However, the Claimant still needs to provide evidence. I have had many instructions to attend a Stage 3 hearing where credit hire is in issue, but no statement from the Claimant has been provided.
The absence of a statement can be devastating to a case if the credit hire agreement does not include any information at all required to support any assertions that the Claimant wishes to rely on (such as need, social/domestic, impecuniosity).
You should still prepare and upload a statement detailing the issues relevant to the hire. This is despite the fact that paragraph 7.11 of the RTA Protocol stating that “in most cases, witness statements, whether from the claimant or otherwise, will not be, required”.
All documents uploaded are endorsed with a statement of truth
Sometimes, documents like summaries or responses are prepared. They may or may not include a statement of truth. I’ve had many arguments about whether these documents comply with CPR. However, every time a new document is uploaded and a counter offer is made, the legal representative of the party signs a statement of truth. When the Court Proceedings Pack is sent, the Claimant signs a statement of truth. Therefore, any document relied on is endorsed by a statement of truth.
That being said, whilst this means the Court must accept the documents as true, the legal representatives must ensure the documents are accurate and true to the best of the client’s knowledge and beliefs. After all, any document where a statement can be signed by the legal representative is treated as being signed by the party:-
Pracice Direction 22
3.6 Where a party is legally represented, the legal representative may sign the statement of truth on their behalf. The statement signed by the legal representative will refer to the client’s belief, not their own. They must state the capacity in which they sign and the name of their firm where appropriate.
3.7 Where a legal representative has signed a statement of truth, their signature will be taken by the court as their statement that:
(1) the client on whose behalf they have signed had authorised them to do so,
(2) before signing they had explained to the client (through an interpreter where necessary) that in signing the statement of truth they would be confirming the client’s belief that the facts stated in the document were true, and
(3) before signing they had informed the client of the possible consequences to the client if it should later appear that the client did not have an honest belief in the truth of those facts (see rule 32.14).
……..
3.9 A legal representative who signs a statement of truth must sign in their own name and not that of their firm or employer.
Remember that if the Defendant applies and successfully has the matter transferred to Part 7 (and future evidence by the Claimant is to the contrary), then there would be a real risk to the Claimant to have endorsed something that was not correct.
Loss of use dates…. where is the evidence?
This is an issue that I quite regularly see in both small claims track and fast track credit hire cases. Whilst it is the Defendant’s burden to establish that the period fo hire was unreasonable, it is very easy for a Defendant to make such arguments in the absence establishing the time line of the loss of use.
For example, when the engineer was instructed when the report was received, when the payment from the Defendant was received, what steps were taken during the repair period to obtain updates/encourage the repair. The difficulty is that sometimes, this information is not something the Claimant has actual knowledge of but has access to (via their legal representatives or the credit hire organisation). This can be adduced in the same way as above or evidenced by a witness statement (usually setting out where the evidence came from).
I cannot count the number of times I’ve received a trial brief and found the loss of use dates within my instructions but no evidence within the bundle. As advocates cannot give evidence (and a Court will only consider what has been uploaded onto the portal and annexed to the Court Proceedings Pack) it is vital that such information is adduced.
Knowing when to defend an application to transfer to Part 7
As above, I had a law firm contact me regarding a Defendant who was asking the Court to transfer to Part 7 because they said the matter had become too complex. However, the actual issue the Defendant had with the claim was that the Claimant had not disclosed its income details. The Claimant was a taxi driver and as per the authority of Hussain v EUI, the starting point is that the Claimant ought to be limited to the loss of profit if the hire exceeds the same.
This was a flawed proposition. If anything it placed the Claimant in a precarious position if it was unable to satsify the Court that one of the three Hussain exemptions had not been met.
There will be times where a Defendant does raise a valid challenge to the hire claim proceeding via Stage 3. This will usually be when it objects to a proposition that the Claimant has put forward, and the only way to challenge this will be to cross-examine the Claimant. I cannot see any real prospect in defending this. The entire purpose of the Stage 3 process is for the Defendant to be liable for limited costs but not have the opportunity to controvert the evidence. It would only be fair that if the Defendant wanted to, it should be able to challenge that evidence.
However, there will be arguments that I say can and should be challenged. For example, a Defendant argues that impecuniosity has not been made out. However, even if the argument succeeded unless the Defendant adduces BHR evidence, the hire rates would prevail. A Defendant may argue that the very reliance of the BHR evidence makes the matter to complex for a Stage 3 hearing. I disagree with this. BHR evidence is almost always relied on as hearsay evidence. If there is anything the Claimant can challenge, it can usually be done based on the written evidence alone.
Even the argument that there are too many issues is probably flawed. For example, imagine you have a credit hire with period, rate, and impecuniosity being raised. You also have PSLA with three medical reports, physiotherapy, CBT, and a loss of earnings claim. Does this mean it cannot be dealt with at Stage 3? Definitely not. There is no fast rule about a time limit for a Stage 3. Courts such as Liverpool will block lists straightforward cases to be run in block lists with fifteen-minute hearing times. However, I have been in many Stage 3 hearings that are listed for one hour. This is usually plenty of time to get all submissions done. I also once had a two hour Stage 3 listed. All that is needed is that if the number of issues is significant, advise the Defendant and the Court that a longer EHT is needed for Stage 3.
Limit issues to what is raised in the Stage 2 negotiations
Usually, the Defendant will raise issues at Stage 2 but not others. In some cases, a Defendant will try to argue other points not previously raised. The nature of Stage 3 should prevent new issues from being raised. Namely, because the Claimant is not allowed to adduce evidence to challenge that point.
I would argue that by not raising the issue at Stage 2, the Defendant essentially conceded that issue. Like in Morgan-Rowe v Woodgate [2023] EWHC 2375 (KB), once the concession happened, the Defendant could not retreat at the trial (or subsequent appeal).
Information
AJH Advocacy Limited, a Limited Company which is regulated by the Bar Standards Boards (entity number 190758), ceases trading on the 12th January 2026.
From the 12th January 2026 and onwards, Alec Hancock will practice as a Barrister at Magdalen Chambers in Exeter. For instructions on matters on or after 12th January 2026, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.