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Lords back court view on credit

The House of Lords has endorsed the view of the Court of Appeal that some credit hire agreements could be exempt from the provisions of the Consumer Credit Act 1974. The Lords also dismissed the cross appeal on the mitigation of loss and damages.

The long awaited ruling in the Dimond v Lovell case, which dates back to December 1996, means credit hirers must supply replacement vehicles at comparable rates to local rental firms.

Many insurers have held off paying credit hirers in anticipation of a favourable ruling, creating cashflow problems. Last month, shares were suspended in Alpha Accident Management, which floated in December.

A spokesman for credit hire firm Helphire expected rates to become more transparent. The ruling will affect smaller players and could lead to further consolidation.

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