Credit hire claims – where a claimant hires a replacement vehicle on credit after an accident – remain relatively uncommon in the Republic of Ireland, though they volume of these claims is undoubtedly growing. Insurers in Ireland must be vigilant and prepared. A structured, proactive defence can save costs and minimise exposure. Credit hire cases often involve large daily charges that accumulate quickly, so early intervention is crucial.

Below is a detailed, step-by-step guide to defending credit hire claims in Ireland.

Step 1: Early Identification and Referral

• Identify potential credit hire claims immediately – at the first notice of loss (FNOL) or during initial discussions with the claimant or their representatives.
• Refer the case internally to a dedicated credit hire handler or team trained to manage such claims.  Early specialist involvement means the claim is defensively handled from the outset and early identification prevents costs from spiralling if the case ends up in litigation.
• Request key details without delay:
  • The circumstances of the accident to investigate liabilty quickly.
  • The daily rate of hire and type of vehicle being hired.  This will give some idea of quantum.
  • The initial repair estimate or motor assessor’s report relating to the damage.
• Obtain a desktop engineering report by forwarding the estimate to an independent engineer.
• If the engineer recommends inspection, arrange inspection facilities quickly.
• If no inspection is required, confirm this in writing to bring any ongoing storage costs to an end.
• If the vehicle is repairable, request updates on:
  • Repair progress.
  • Anticipated delays (e.g. due to the current global parts shortage).
  • Offer assistance sourcing parts, if possible.
• If the vehicle is a total loss, the plaintiff will typically seek the pre-accident value less any salvage.
  • Raise the payment promptly, ideally by bank transfer, to avoid prolonged hire.

🛠️ Why this matters: Credit hire is a continuing cost. Fast, coordinated action at this early stage helps limit duration and mitigate unnecessary expense.

Step 2: Use of Intervention Letters

• Copley v Lawn: This is a UK case which confirms the position on letters from insurers offering their own services.  If the case is litigated, Defence practitioners can suggest that in refusing the services, they failed to mitigate their own losses.
• A valid intervention letter (offering a replacement vehicle) must clearly state the cost to the insurer. If the offer is vague or threatening in tone, it will likely be considered non-compliant, and the claimant cannot be criticised for refusing it.
• Mitigation of damages: A valid intervention letter allows insurers to argue the claimant had access to a cheaper alternative. Even if rejected, the insurer may only be liable for Basic Hire Rate (BHR)—if they can show what a reasonable alternative would have cost.
• Timing: Courts are fairly strict and so it is key that the letter is sent at FNOL stage before hire begins.
• Tone and clarity: The offer must be:
  • Reasonably drafted and ‘copley’ compliant
  • Non-aggressive.
  • Clearly priced.
• Practical tip: Always issue intervention letters early and retain proof of delivery.  Insurers are now considering new and practical means of delivery such as email, texts and even a bouquet of flowers!

✉️ Well-drafted intervention letters are a practical, court-recognised tool for controlling credit hire exposure from the outset.

Step 3: Challenge the Claimant’s Need

• The claimant has the burden of proving they required a hire car due to the accident.
• The insurer can rebut this by showing:
  • Access to another vehicle.
  • Use of a courtesy car from their own insurer.
  • Alternative transport (e.g. public transit) was reasonably available.

🚗 Example: If the claimant had a motor trade policy, they may have had a access to a number of vehicles and insurers should query whether they had another working car they could use, then a credit hire may be deemed unnecessary.

Step 4: Assess the Reasonableness of the Hire

4.1 Duration

• Was the length of hire proportionate to the repair duration?
• Were there delays that could have been avoided or reduced?

4.2 Type of Vehicle

• Was the hire vehicle a ‘like for like’ replacement, based on the size and specification of the original?

4.3 Rates

• Are the hire charges in line with local market rates?  Insurers often instruct a Basic Hire Rate (BHR) report, which surveys high-street providers for like-for-like vehicles in the area. In one case defended by our office in Letterkenny, Ireland, a BHR report showed that an alternative car was available at about half the cost of the credit hire vehicle
• Could similar vehicles have been hired at a lower cost?

4.4 Duty to Mitigate

• Did the claimant take steps to limit their loss?
  • Prompt returning of hire vehicle after repairs.
  • Willingness to consider other a lesser vehicle.

⚖️ Reasonableness is judged case by case—but insurers can often limit exposure by carefully documenting excesses in rate or duration.

Step 5: Explore Specific Defenses

5.1 Impecuniosity

• If the claimant couldn’t afford to pay upfront without making unreasonable sacrifices, a credit hire is generally accepted.
• However, this isn’t a complete defense—insurers can still challenge need, rate and duration.

5.2 Illegality

• If the Plaintiff’s original vehicle did not have a valid NCT certificate, valid insurance or Tax, an argument of illegality can be made.

5.3 Misrepresentation

• If the hire company misled the claimant (e.g. pretending it was a “free courtesy car”), the agreement may be void or voidable.

5.4 Enforceability

• Review the terms of the hire agreement carefully.
• Clauses related to cancellation, payment obligation, and dispute resolution may be grounds for challenge.

Final Thoughts on Credit Hire Claims  in Ireland

A successful credit hire defense rests on:

• Quick action and early internal referral.
• Use of valid intervention letters to reduce potential liability.
• Challenging the necessity, duration, and cost of hire.
• Exploring legal technicalities of the hire agreement for further leverage.

🧠 Insurers who are proactive—not reactive—control the narrative and reduce exposure.

Training for Insurers

Ruaidhrí Austin, Partner at Lacey Solicitors, regularly delivers training sessions to insurers across Ireland on the evolving legal and procedural landscape of credit hire claims. These sessions are available both in person and online, tailored to claims teams, legal departments, or senior handlers.

If your team would benefit from a practical, up-to-date session on defending credit hire claims, please use the Contact Us section of our website to arrange a training session.

After a car accident, one of the first concerns many drivers face is how to stay mobile. Credit hire services step into that gap, offering temporary replacement vehicles without upfront cost. But while this service is vital, credit hire claims after car accidents must also survive legal scrutiny.

At Lacey Solicitors, we understand that after a road traffic accident, access to a temporary replacement vehicle is often critical. Credit hire serves a legitimate need, particularly for innocent drivers who cannot afford to pay for a hire vehicle upfront. But for insurers, while the system is necessary, it must also be proportionate, evidence-based, and compliant with established legal principles.

Credit hire claims are often complex and legally contentious. Those in the trenches of credit hire litigation will often see the same core disputes surface time and time again. While each case depends on its own facts, several key issues consistently arise. These include:

• Need for hire
• Enforceability of the credit hire agreement
• Rate of hire
• Impecuniosity of the plaintiff
• Duration of hire
• General mitigation of loss

While future articles will explore enforceability of hire agreements and general mitigation arguments in more depth, this article focuses on the four most frequently contested aspects of credit hire claims: need, duration, rate, and impecuniosity.

What is Credit Hire?

Credit hire involves the provision of a like-for-like replacement vehicle by an accident management company to a non-fault driver. The cost is not paid upfront by the driver but is instead recovered from the at-fault party’s insurer.

This model has been recognised judicially as fulfilling a real societal need. In Dimond v Lovell [2000] 2 All ER 897, Lord Nicholls described credit hire as meeting a “real need” and Lord Hobhouse acknowledged its “understandable popularity.” However, their Lordships also warned that such claims must be justified under the principles of mitigation and reasonableness.

Key Legal Issues for Credit Hire Claims After Car Accidents

1. Need

A claimant must show a genuine need for a replacement vehicle. This is often the first and most fundamental issue considered in credit hire litigation.

Courts will evaluate whether:

• The claimant required a vehicle at all during the hire period
• The vehicle hired was appropriate for their circumstances
• Reasonable alternatives, such as public transport or a household vehicle, were available

Evidence such as daily mileage, access to other vehicles, work-related travel, family commitments, and geographical access to transport services is often decisive. If the need is not clearly established, the entire hire claim can collapse.

2. Duration

Even if need is proven, the length of the hire must be reasonable and justifiable.

Arguably, delays in repairs, inspections, acceptance of a pre-accident value (PAV) offer and ‘off hiring’ can undermine a claim—especially where those delays are attributable to the claimant or their representatives. The principle of mitigation of loss, as highlighted in Giles v Thompson [1994] 1 AC 142, remains crucial: claimants must take reasonable steps to keep their losses to a minimum.

If unnecessary delays occur, insurers will quite rightly look to dispute part or all of the hire duration.

3. Rate

In credit hire cases, one of the key issues often contested is the hire rate claimed. Courts generally award basic hire rates (BHR) unless the claimant can demonstrate impecuniosity—meaning they could not afford to pay for the vehicle hire upfront—in which case full credit hire rates may be allowed.

However, if the defendant does not provide evidence of BHR, courts may by default award credit hire rates even if impecuniosity is not proven. This places an important evidential burden on defendants to produce credible BHR evidence to challenge higher credit hire charges. Without such evidence, the court has limited means to assess whether the credit hire rates claimed are reasonable compared to market rates.

When courts do consider BHR, they look for the lowest reasonable rates available from mainstream or reputable local suppliers in the claimant’s geographical area. The assessment is fact-sensitive and courts generally avoid overly technical disputes about exact pricing, focusing instead on a reasonable approximation of market rates as seen in Stevens v Equity Syndicate Management Ltd [2015] EWCA Civ 93. Additionally, if credit hire agreements include extras such as “nil excess” cover that basic hire rates do not provide or provide inadequately, the court may treat these costs separately and allow appropriate adjustments. Overall, rate challenges aim to ensure claims reflect fair market costs rather than inflated charges, balancing the claimant’s legitimate needs against the defendant’s right to avoid overpayment.

Claimants are generally only entitled to recover the Basic Hire Rate (BHR) unless they can establish ‘impecuniosity.’

4. Impecuniosity

Impecuniosity, a pivotal issue in credit hire claims, refers to a claimant’s inability to afford upfront car hire charges following an accident. It forms part of the broader duty to mitigate losses—a principle that claimants must act reasonably to limit financial damage. Courts have established that where a claimant cannot afford to hire a vehicle without making unreasonable sacrifices, credit hire charges may be recoverable.

As outlined in South Eastern Health and Social Care Trust v Flannagan and Capper Trading Ltd [2015] NIQB 30, Horner J explained:

“An individual who is not penniless can still be impecunious, because as a question of priorities he is unable to pay car hire charges without making sacrifices he could not reasonably be expected to make.”

Key case law, including Lagden v O’Connor and Zurich Insurance Plc v Umerji, illustrates that impecuniosity not only impacts the rate of hire but also the duration. The burden initially lies with the claimant to prove their financial position, and once sufficient evidence is provided, the evidential burden shifts to the defendant.

The assessment of hire charges and duration differs based on whether the claimant is impecunious. If so, they may claim the full credit hire rate and extend the hire period until the defendant provides compensation for repairs or vehicle replacement. For pecunious claimants, courts consider what is reasonable under the circumstances, such as waiting for an engineer’s report or the defendant’s inspection. In cases where repairs or replacements are delayed without justification, courts assess the claimant’s efforts to mitigate losses. Ultimately, reasonable conduct, timely communication, and evidence of financial status are central to determining recoverable credit hire damages.

Courts expect robust documentary evidence—bank statements, income proof, credit history, and essential outgoings—to support any claim of impecuniosity. Vague assertions or anecdotal claims won’t meet the required threshold.

Real-World Case: High Charges, But Still Recoverable?

A recent example reported by the BBC involved a nurse who was charged £50,000 for hiring a Tesla Model 3 for over three months. While the judge acknowledged that the hire costs were three times higher than standard and the hire period 75 days longer than necessary, he still ruled that the insurer was liable for the full amount.

The reasoning was based on the fact that the claimant followed her employer’s fleet management advice and acted in good faith. While the result may appear controversial, it highlights how the factual context and procedural conduct of the parties can significantly influence judicial outcomes—even where rate and duration are contentious.

Industry Improvements for Credit Hire Claims After Car Accidents

Not all credit hire claims are problematic. In fact, recent industry data suggests that:

• Average hire durations are decreasing
• Legal costs associated with credit hire have dropped by nearly 50% since 2023

This reflects greater cooperation between insurers, defendant law firms, and accident management companies. However, careful legal oversight remains essential.

Conclusion: Necessary Service, But Not a Carte Blanche

Credit hire is necessary and beneficial—but it must be fair, reasonable, and subject to evidential and legal discipline. Defence solicitors and insurers have a duty to:

• Insist on proper proof of rate, need, and duration
• Demand full impecuniosity disclosure where higher-than-market rates are claimed
• Resist excessive or unjustified claims, while still acting proportionately and fairly

At Lacey Solicitors, we are uniquely positioned to assist clients—whether insurers, fleet managers, or individuals—with the nuances of credit hire claims after car accidents. With a deep understanding of both claimant and defence perspectives, we provide balanced, evidence-based legal strategies in this ever-evolving area of personal injury law.

📞 Need advice or representation in a credit hire dispute? Contact Lacey Solicitors today.

On 10th March 2025, The Irish Times reported on an incident where a jogger suffered a broken leg after an alleged collision with an e-bike on the footpath. This raises significant concerns for users of e-bikes and e-scooters in Ireland, particularly regarding liability under civil and criminal law. A key issue is whether the e-bike involved — described as an ENGWE EP-2 Pro Folding e-bike — qualifies as a mechanically propelled vehicle (MPV), as per the Road Traffic and Transport Act 2023, which introduced the concept of a “powered personal transporter” (PPT). The legal clarity surrounding such vehicles continues to develop, especially with the introduction of new regulations that prioritise the safety of both the user and the public.

The Road Traffic and Transport Act 2023: Key Legal Updates for E-Scooters and E-Bikes in Ireland

The Road Traffic and Transport Act 2023 has officially introduced new regulations for e-scooters and e-bikes in Ireland. These regulations aim to ensure the safety of not just e-scooter and e-bike riders, but also pedestrians, cyclists, and other road users. The new framework categorises e-scooters and e-bikes under Personal Powered Transporters (PPTs), with specific technical and usage parameters.

Key New Regulations for E-Scooters in Ireland:

• E-scooters with a maximum power output of 400 W, a maximum speed of 20 km/h, and a weight of 25 kg are now legal for use on public roads. However, any e-scooter exceeding these parameters will remain illegal.

• Age restrictions: E-scooter users must be 16 years or older to ensure safety for both riders and the public. Riders are allowed to use their e-scooters in cycle lanes and bus lanes, but not on footpaths or in pedestrianised zones.

• Usage Requirements: Users must not carry passengers or goods, follow speed limits, and avoid using mobile phones while riding. Additionally, e-scooters must be fitted with necessary safety features, including front and rear lights, reflectors, brakes, and a bell.

New E-Bike Regulations in Ireland:

• E-bikes with a maximum power output of 250 W, a motor that cuts off once pedalling stops, and a maximum speed of 25 km/h will be classified as bicycles under Irish law. E-bike riders will have the same rights as cyclists, including the ability to use cycle lanes and bus lanes, but they are not permitted to use footpaths.

• For e-mopeds, which are more powerful than e-bikes, additional regulations apply due to their higher speed potential:

  • E-mopeds with a maximum speed of 25 km/h and a power output of 1000 W will be classified as L1e-A e-mopeds, requiring helmet use, and will be permitted to use cycle lanes and bus lanes.
  • E-mopeds with a maximum speed of 45 km/h and a power output of 4000 W (L1e-B e-mopeds) will require vehicle registration, an AM driver’s licence, and insurance for throttle-powered versions. These e-mopeds will be prohibited from using cycle lanes, bus lanes, footpaths, and pedestrianised zones.

The Irish vs. UK Approach to E-Scooter Regulations

Until recently, e-scooter usage in Ireland was in a legal grey area. Operators were unsure whether their e-scooters could be legally used on public roads and whether they required a driving licence, insurance, or NCT. The situation was clearer in the UK, where private e-scooters were generally illegal on public roads due to requirements for driving licences, insurance, and vehicle registration under the Road Traffic Act 1988.

In Ireland, the introduction of the Road Traffic and Roads Act 2023 created a new category for Personal Powered Transporters (PPTs), offering clarity. The Road Traffic (Electric Scooters) Regulations 2024 confirmed that e-scooters are classified as PPTs, with rules governing their safe use on public roads. Notably, users must be 16 years or older to operate e-scooters, and the regulations will be enforceable by An Garda Síochána.

Recent Developments and Public Safety Initiatives

From 20 May 2025, the regulations will take effect, providing clear technical and usage specifications for e-scooter and e-bike users. These changes include guidelines that outline how e-scooters and e-bikes can be legally and safely used in public spaces, enhancing safety for pedestrians, other road users, and cyclists. Furthermore, a public information campaign will help educate the public on the new regulations and safety practices.

The National Transport Authority has also restricted the carriage of e-scooters on public transport, citing concerns about lithium-ion batteries and quality control. This restriction will apply to buses, trains, and other modes of transport starting October 2024.

Safety Concerns and the Need for Ongoing Regulation

While the new regulations bring much-needed clarity, the safety of e-scooter riders and the general public remains a priority. Recent reports indicate an increase in serious accidents involving e-scooters and e-bikes, particularly fatal injuries among minors. The absence of a minimum age requirement for some vehicles and the lack of an insurance requirement have raised concerns. Continued oversight and ongoing legislative adjustments will be crucial as e-scooter and e-bike usage continues to rise across the country.

Conclusion

The introduction of the Road Traffic and Roads Act 2023 represents a major step forward in regulating e-scooters and e-bikes in Ireland. With the new regulations set to come into effect by 20 May 2025, Ireland is taking a proactive approach to ensure the safe integration of these vehicles into the country’s evolving transport landscape. By balancing the needs of e-scooter and e-bike riders with the safety of other road users, these regulations offer a promising framework for Ireland’s future mobility. However, as with all new technologies, further regulation may be necessary to address emerging challenges and ensure the safety and rights of everyone on the road.