Legal Showdown Over Costly Credit Hire Charges

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This legal clash originated from a vehicular accident in Wollongong, December 2021, where Cameron Lazicic’s car collided with and irreparably damaged Thomas Rossi’s Honda Civic.

While Mr. Lazicic’s insurer, NRMA Insurance, admitted liability for the damages, they refuted the $29,684 bill from credit hire company Right2Drive. This charge was for a Hyundai i30 rented at $343 per day for 86 days, until Mr. Rossi’s car was replaced.

The total bill for the car hire exceeded the cost of purchasing some models of the Hyundai i30 outright. This discrepancy has sparked significant legal debate.

Given NRMA Insurance’s rejection of the credit hire claims, Mr. Rossi proceeded to sue Mr. Lazicic. However, in an interesting turn during the Local Court proceedings, the magistrate observed Mr. Rossi’s apparent confusion and reluctance, noting that credit hire company Right2Drive had likely initiated the lawsuit by exercising a right of subrogation.

Known for offering replacement vehicles to car crash victims with the assurance of reclaiming the expenses from the at-fault party’s insurer, credit hire companies have drawn the ire of motor insurers. The main concerns stem from their substantial fees, which insurers argue inflate claims and, consequently, hike insurance premiums.

NRMA Insurance provided evidence illustrating that alternative hire car services in Wollongong offered rates as low as $90 per day at the time of the accident. Mr. Lazicic maintained that a rental fee of $7380, equivalent to $85.52 per day, was more reasonable. However, the Local Court ruled against him, holding him liable for the full credit hire bill.

In his appeal last month, the NSW Supreme Court’s Justice Jeremy Kirk highlighted a critical lack of communication between Right2Drive and Mr. Rossi about the financial implications of the hire.

Justice Kirk remarked that Mr. Rossi received a call from Right2Drive shortly after the accident. According to the Local Court magistrate, during this call, there was no discussion regarding payment, rates, or potential discounts. Justice Kirk noted, "When asked about agreeing to pay roughly $345 for a fairly ordinary $22,000 car, Mr. Rossi implied he was unaware of the rate being charged." Further, Mr. Rossi did not inquire about the costs involved.

Ultimately, Justice Kirk overturned the Local Court’s initial decision, citing the magistrate’s failure to provide detailed reasoning or critically assess whether Mr. Rossi's actions in incurring the rental expenses were justified.

This matter has been sent back to the Local Court for a new hearing, promising further developments in the ongoing legal battle.

The original source of this story can be found on [Insurance News](https://www.insurancenews.com.au).

Published:Friday, 9th Aug 2024
Source: Paige Estritori

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