On 20 December 2019, the Insurance Times published an article titled ‘Credit hire sharks circle as market reacts to excessive costs’ (First Article), and on 2 January 2020, a second article titled ‘Rogue agent aggravates industry with trumped-up credit hire costs’ (Second Article).
Direct Accident Management Ltd & Anor v Newsquest Specialist Media Ltd [2022] EWHC 2572 (KB)
Case background
The First Article made comments/accusations about Direct Accident Management Ltd (DAMS), which is a company specialising ‘in all aspects of vehicle accidents, post-accident assistance and vehicle hire’. The Second Article made reference to DAMS and a firm of solicitors, Bond Turner Limited (Bond Turner), which is part of the same group as DAMS.
DAMS and Bond Turner were unhappy with the content of the First and Second Articles and accordingly issued proceedings against the Insurance Times on 17 December 2020. Following a hearing in May 2022, Mrs Justice Tipples DBE handed down her judgment on the natural and ordinary meaning of the claims made in the First Article and Second Article.
It is important to note that no formal defence had been submitted by the Insurance Times at the date of this hearing and accordingly the Judge was not required to determine the truth in the words set out in the article or any of the other statutory defences available to a Defendant in defamation proceedings (see our previous blog for comments on some of the available defences).
As is required in defamation cases, DAMS and Bond Turner set out their case on what meaning they believe ought to be attributed to the words set out in the First Article and the Second Article, as follows:
- “DAM’s case is that the words complained of that make up the second article, in their natural and ordinary meaning, meant and were understood to mean that DAM:
(1) is guilty of widespread fraud, in particular of the fraudulent concoction and exaggeration of excessive and extortionate credit hire costs, which it then fraudulently seeks payment for through the Courts via claimants bringing road traffic accident claims;
(2) is guilty of generally dishonest and underhand practices, going back many years;
(3) operates in a manner that is unusually dishonest and wrongful, even within the unregulated and generally unethical credit hire sector; and
(4) does not act honestly, fairly, and professionally in their customers’ best interests, directly contrary to FCA principles for businesses;
(5) in breach of its own FCA obligations to act honestly and with integrity, knowingly participated in activities that constituted a breach of the Solicitors Regulation Authority (“SRA”) Principles and GDPR namely improperly acting in respect of introducing and referring clients to other members of the Anexo Group of companies; making impermissible direct referrals; referring customers to other Anexo Group companies without consent; and generally acting towards its own customers in a deliberately non-transparent, dishonest and underhand manner;
- Bond Turner’s case is that the words complained of that make up the second article, in their natural and ordinary meaning, meant and were understood to mean that Bond Turner:
(1) does not act honestly, fairly and professionally in their customers’ best interests, directly contrary to FCA principles for businesses; is guilty of acting in a deliberately non-transparent, dishonest and underhand manner towards its clients in respect of introductions and referrals, and in particular:
(2) acting improperly despite having a conflict of interests in respect of client introductions;
(3) failing to disclose referrals from firms in the same group to consumers;
(4) engaging in unlawful direct referrals of consumers;
(5) referring custom directly, without client consent, to other Anexo Group companies for group-wide financial gain, in breach of SRA regulations and GDPR;
(6) allowing a credit hire company which it knows or ought to know is rogue and fraudulent to benefit from its SRA authority, in breach of SRA regulations; and
(7) failing to be transparent in its contracts and fee disclosures in respect of their work with the obviously rogue and fraudulent company, in breach of SRA regulations and the GDPR.”
The Defendant conversely contended for the following natural and ordinary meaning:
“(1) DAM and Bond Turner are part of a group through which DAM provides credit hire services and Bond Turner provides legal services within the same Road Traffic Accident marketplace.
(2) DAM allowed a grossly excessive and unreasonable sum many times the value of the relevant vehicle of £400,000 in credit hire fees to accrue to its client, a driver to whom it had provided a replacement vehicle. DAM did so notwithstanding that the driver was involved in a claim in which the defendant insurer’s liability was being disputed and in which there were strong grounds to suspect fraudulent and underhand behaviour in relation to the accident, in which the driver had driven her car into a stationary, parked vehicle. The litigation was conducted on the driver’s behalf by Bond Turner. This gives rise to:
(A) reasonable grounds to suspect that DAM:
(a) failed to investigate whether its own client was at fault for her accident;
(b) failed to mitigate its client’s liabilities in an attempt to pressure the settlement of her claim;
(c) in doing so contravened the requirement to act honestly, fairly, and professionally in their customers’ best interest;
(d) does not act honestly and transparently towards its clients in respect of client introductions and referrals to Bond Turner; and
(B) reasonable grounds to investigate whether Bond Turner:
(a) fails to act honestly and transparently towards its clients in respect of client introductions and referrals from DAM, and in respect of extending its SRA authority to a credit hire company such as DAM.”
The Defendant did not take issue with the Claimant’s claim that the First Article and Second Article were defamatory at common law but claimed that the underlined sections in the above extract were statements of opinion.
The judge adopted the widely recognised approach in terms of reading the articles first before delving into the parties’ positions so that she could gauge her initial reaction to the articles. The judge found the First Article’s natural and ordinary meaning when taking into account the proper context, to be:
“(1) In a recent legal action relating to liability for a road traffic accident DAM, a credit hire organisation, had sought to charge a driver the excessive sum of £400,000 for a replacement vehicle, used for two years and nine months while liability was disputed.
(2) DAM does not participate in the self-regulation by the credit hire sector to limit credit hire charges. DAM has taken advantage of the lack of regulation in the credit hire sector to seek to charge excessive costs, and in doing so has applied poor practices such as exploiting loopholes or elongating repair periods.
(3) DAM is an example of a credit hire organisation that is particularly bad when it comes to charging excessive credit hire costs.”
The Judge found the Second Article’s natural and ordinary meaning when taking into account the proper context, to be:
“(1) DAM, a credit hire firm, is guilty of fraud in relation to charging exaggerated and grossly excessive credit hire costs to its customers. Such fraudulent conduct by DAM goes back to 2013 and it is particularly bad conduct by a credit hire firm in the unregulated credit hire sector.
(2) DAM provided a replacement vehicle to a driver in a road traffic accident and, over a period of almost three years, charged its customer the exaggerated and grossly excessive sum of £400,000 in credit hire costs whilst her car was being repaired and liability was being disputed.
(3) There are reasonable grounds to suspect that there is a conflict of interest between DAM and Bond Turner, a legal firm, in relation to the provision of credit hire services and claims to recover the cost of such services.
(4) There are reasonable grounds to suspect that DAM does not act honestly and transparently towards its customers in respect of client introductions and referrals to Bond Turner.
(5) There are reasonable grounds to suspect that Bond Turner fails to act honestly and transparently towards its clients in respect of introductions and referrals from DAM.”
The judge further found that both sets of natural and ordinary meaning were statements of fact rather than expressions of opinion. The effect of this is that the defence of honest opinion set out in s.3 of the Defamation Act 2013 will not be available to the Defendant in this matter. The case will now proceed with a view to determine whether any of the other statutory defences are available to the Defendant.
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