Posted by Leeann Chamberlain, head of market strategy at Legal Futures Associate Verisk Claims UK&I [1]
Chamberlain: Best opportunity in decades to ease tensions in credit hire
Since the 1980s, insurers and credit hire organisations have relied on voluntary protocols, most notably the General Terms of Agreement (GTA), to manage credit hire disputes around daily rates, hire duration and ancillary charges.
The aim was a motor claims process with less friction, fewer trips to court and reduced costs.
Those intentions have only ever been partly realised. Differing interpretations, lack of adherence, and points of contention the protocols never quite addressed meant disputes kept surfacing.
With claims automatically falling outside the GTA 61 days after the invoice is presented, the default route to settlement beyond that point has been common law consideration and, too often, litigation.
A protocol that keeps evolving
The GTA protocols have undergone a series of successive updates intended to address areas of frequent contention and give both sides a clearer standard to work to.
The maximum daily rates are now reviewed independently each year. The latest review, effective from 1 July, drew on more than 16m vehicle-group pricing data points tracking a full year of market movement.
Alongside this sits tighter new-claim reporting requirements, clarity on guidance around mitigation, and revisions to how late payment penalties (LPPs) are valued and applied. Together they form part of the wider ‘GTA2’ framework, designed to reduce friction and accelerate earlier resolution.
Following an initial pilot in 2025 that returned encouraging results, phase 2 of the GTA ADR scheme is due to begin in September 2026.
Phase 2 introduces binding arbitration for its voluntary GTA members for credit hire invoices under £10,000 that remain unresolved after 61 days. Rather than letting claims drop out of the framework and enter the county court, ADR is designed to keep them inside the GTA to be resolved by resolution specialists.
The civil justice system is straining under increasing backlogs, with county court claims now taking over 50 weeks on average to resolve, up from 31.6 weeks in 2015. An online, industry-led resolution route would ease the pressure and settles contentious cases more quickly and efficiently.
Crucially, ADR between subscribers also avoids the motorists involved facing detailed financial disclosure and court attendance, resulting in a better experience for consumers.
The industry need for ADR
Credit hire remains one of the most contentious areas in motor claims, with costs driving much of the tension.
The average credit hire claim has risen from around £1,600 across 2014 to 2021 to more than £2,000 from 2022 onwards, driven partly by daily-rate inflation and longer hire durations, as increasingly complex vehicle technology lengthens repairs and supply-chain pressures compound the delays.
Verisk’s data shows that, while fewer than 2% of GTA cases end up in litigation, more than 80% of claims settled within the framework are still subject to adjustment from the presented invoiced values before they settle.
In the first half of 2025 alone, Verisk estimates the industry spent the equivalent of more than 15 years simply processing credit hire invoices — reviewing, negotiating and settling them.
That’s not 15 years of full-time work – that’s 15 calendar years. If we can get to a place where disputes are reduced, and those that remain are resolved quickly and consistently, we will free up the industry to focus on the areas where human expertise really matters.
Changing behaviours through ADR
Part of what makes ADR effective is that the financial consequences now cut both ways. Previously, penalties only applied to the insurer and were incurred for late payment regardless of whether the invoice presented was reasonable in the first place.
Under ADR, a penalty can now attach to either party depending on how they behaved before the case reached ADR. If the ADR outcome agrees with an offer the insurer made in good time, the settlement is reduced by 10% and the hire company pays the ADR fee.
Conversely, where an insurer fails to make a reasonable offer in good time and the ADR upholds the hire company’s invoiced figure, a 20% uplift is applied to the settlement, and the insurer meets the arbitration fee.
Clear incentives of this kind should encourage both parties to engage proactively and in good faith, to ensure appropriate settlement figures are reached consistently.
Why clear information will decide ADR’s success
Verisk’s proprietary dual-sided claims management platform, verify™, has been chosen to host GTA ADR, building on its long-established role handling liability ADR between insurers on subrogated claims. It streamlines the settlement journey by simplifying case preparation, supporting negotiation and enabling seamless referral to ADR for cases meeting the agreed criteria.
Technology and scalability are not the issue – it’s consistency and behaviours that matter.
Timely, consistent decisions depend on both parties setting out their position clearly and backing it with accessible, transparent claim information.
Improvements such as enhanced new claims advice and payment-pack requirements, introduced to give each side fuller information from the outset, facilitate exactly that. These features will enable ADR to deliver on its objectives – as well as potentially avoiding the need for it in the first place.
Success will be measured by how quickly the industry can negate the need for ADR through improved behaviours and engagement.
What this means for legal professionals
For lawyers, many lower-value disputes will now be resolved through the online ADR portal. However, litigation will remain the route for cases that fall out of scope: higher-value claims, fraud allegations, multi-vehicle incidents and linked injury litigation.
This allows legal expertise and resources to be concentrated where it adds the most value, rather than being taken up by high-volume, low-value claims.
This further incentivises the case for early disclosure, as between roughly half to 60% of credit hire litigation settles only once disclosure has taken place, which is after both sides have already incurred additional costs.
Whether through ADR or a strengthened pre-action approach, it is important to ensure the correct information is provided early in the claims lifecycle to remove the risk of avoidable disputes.
A pivotal moment
With phase 2 due to launch in September, the industry will be watching closely. For many, it is the best opportunity in decades to ease the long-standing tensions in credit hire and build a better system provided both sides are willing to engage and bring clear information to the table.