Credit hire is a significant aspect of road traffic accident claims in England and Wales. Although the topic can be contentious, it offers Claimants a legitimate option to hire a replacement vehicle on credit when their own vehicle is damaged or written off, pending the resolution of their claim. These claims are typically encountered in small claims track trials, fast track trials, and even multi-track trials. The MOJ portal plays a vital role in managing low-value personal injury claims, including those that involve credit hire.
In this article, I will explore how credit hire operates within the MOJ portal, its importance, and some common issues faced by Claimants and Defendants.
Credit hire
For those who do not know, credit hire is a legal arrangement that enables a non-fault party in a road traffic accident to obtain a replacement vehicle on credit, rather than paying upfront. The Claimant doesn’t need to pay for the hire vehicle until their claim is settled, and the cost is typically recovered from the at-fault party’s insurer.
Credit hire agreements can be essential for individuals who rely on their vehicle for work, family, or other personal needs and cannot afford the immediate cost of a hire car. These agreements are offered by credit hire companies, which provide the vehicle on the understanding that the cost will be reclaimed from the at-fault insurer.
The issues that usually are raised are:-
- Is the agreement an enforceable contract for which gives rise to a legitimate claim by the Claimant against the Defendant for those costs?
- Did the Claimant have actual need for the hire vehicle and/or for that particular vehicle hired?
- Was the duration of the hire period reasonable and necessary?
- Was the Claimant impecunious and unable to pay for hire up front that it warranted the increase daily rates provided for under the credit hire agreement?
- If the Claimant was pecunious, was there a mainstream or reputable local provider of hire in the Claimant’s geographical area that could have provided hire at a lower rate?
The cost of hire agreements is understandably subject to scrutiny and criticism. For decades, the credit hire industry has continued to grow, with no clear indication that this trend will slow. It does not delve into the pros and cons of credit hire. This is about how credit hire works in the MOJ portal.
The MOJ Process
The MOJ Portal was introduced in 2013 2010 (thanks to Lee Kipling for pointing out my error) to streamline the process of handling low-value personal injury claims, particularly those under £25,000. The portal covers claims related to RTA, employer liability and public liability claims. It is designed to make the claims process faster and more efficient by setting time limits for key stages, reducing the need for litigation, and encouraging early settlement.
As the MOJ Portal was intended to streamline matters, it also means that the adversarial process is streamlined. If the parties cannot resolve matters, then the claim proceeds to a final Stage 3 hearing under Part 8. This means no live evidence and is submissioned based.
So, how does it impact dealing with credit hire disputes, which turn predominantly on evidence of the Claimant being controverted by way of cross-examination?
How Credit Hire works within the MOJ Portal
When an RTA claim is initiated on the MOJ Portal, and liability is admitted, the Claimant will look to submit a ‘Stage 2 Settlement Pack’ containing the heads of loss they are claiming. The Claimant’s legal representatives will submit supporting documents, including the credit hire agreement. The Defendant insurer will assesses the claim for reasonableness of charges. Either the parties can resolve the issues or it proceedings to a Stage 3 hearing.
However, once the consideration period ends (the period of time during Stage 2 during which the parties negotiate) neither party cannot adduce further evidence. It is therefore important that the parties ensure that they have the correct evidence obtained and disclosed during Stage 2 to support the elements of credit hire.
Credit hire evidence in Stage in the MOJ
Credit hire claims generally (and not limited to claims within the MOJ portal) require the Claimant to prove various elements, including the rates charged by credit hire companies, which insurers will argue are excessively high compared to standard market prices.
The Claimant must demonstrate that the hire agreement is enforceable, or alternatively, that there is a valid right to damages. This can be established by providing a copy of the hire agreement. Additionally, the Claimant needs to show that they had a legitimate need to hire a vehicle, which is typically addressed in a witness statement. They may also need to prove that they specifically required a particular type of vehicle.
The duration of the hire period is often a contentious issue in credit hire cases. This will be discussed in the witness statement, but can also be supported by other documents that justify the length of the hire. A crucial factor for the Claimant is proving that they are ‘impecunious,’ meaning they could not afford to pay for the hire upfront, along with the costs of repairs or purchasing a replacement vehicle, without risking significant financial hardship. This will require bank statements, wage information and, if self-employed, profit and loss information/tax returns.
Defendants will want to adduce evidence to challenge the rate of the hire, by providing evidence of mainstream or reputable local providers of car hire that would have been available geographically to the Claimant. If they do not provide such evidence, then the Claimant’s hire rates may prevail, even if the Claimant cannot establish impecuniosity.
Although this is a streamlined system designed to handle low-value cases, the principle remains that the party making a claim must provide evidence to support it. Therefore, the Claimant is required to present evidence for their claims, while the Defendant must also provide arguments to support their position regarding the Claimant’s alleged failure to mitigate damages.
Stage 3 hearings
Stage 3 hearings can be beneficial for claimants and detrimental to defendants in credit hire matters. Neither party can produce new evidence to support their positions, and the defendant is not in a position to be able to cross-examine the claimant. Whatever is said in the witness statement is uncontroverted unless other evidence served at stage 2 contradicts or undermines that position.
I see Claimants seeking credit hire quite often without witness statements, adducing the necessary evidence in support of various factors, such as need or period. I have also seen defendants not put forward any BHR evidence to support alternative rates.
Both parties really need to be able to be in a position where the advocates representing their clients at the Stage 3 hearing can make substantive arguments with the evidence before the Court. This is no different from what would be expected in a Part 7 claim (regardless of track).
Concluding remarks
Understanding credit hire nuances early can help avoid litigation risks and costs for both parties. When personal injury claims go through the MOJ process, Defendants save on legal fees by avoiding part 7 fast-track proceedings. However, they have limited ability to challenge the Claimant’s evidence. Conversely, Claimants recover less in legal costs but have a better chance of getting a substantial percentage of the hire costs.
It is surprising how many cases lack the evidence in support of the relevant elements that need to be established by either party. Preparing evidence for Stage 2 negotiations always ensures that if matters cannot be resolved, your party’s position will be much stronger at a Stage 3 hearing. The nature of Stage 3 hearings does not excuse a failure to meet the evidential burden of proving a loss.
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.