The unusual move – based on a potential legal technicality – is an attempt to force Endsleigh into paying outstanding bodyshop invoices. By issuing writs to the policyholders, Retail Motor Law (RML) hopes Endsleigh will be inundatded with phone calls and forced into taking action.
ARMS collapsed in April after Endsleigh, its biggest customer, moved its business to Motorcare.
Andrew Moody of RML says around 200 repairers are affected. “If there are enough bodyshops which wish to pursue this action, I will be happy to represent them,” he says. “We will try to argue there was a contract between the owner/drivers and the repairer. If the insurer failed to pay, there is an implied term that the owner/driver is liable for payment.”
He claims the average monies owed to the 40 bodyshops which have contacted RML about taking action (concerning 1,000 jobs), is £22,500. The greatest loss incurred by a business of which Moody is aware is £49,000.
“These people are trading on a knife-edge at the best of times. they simply cannot afford to write off this sort of money,” says Moody. If sufficient support is gained to go ahead with the action, up to 2,000 consumers could potentially be receiving a letter from RML.
The MVRA and RMI are offering members advice on ARMS. “We want to help where we can,” says MVRA chief executive Mike Monaghan.
A creditors meeting will be held on June 9, after which Moody will make a decision on legal action.