Background: The General Terms of Agreement (GTA) is the long-running voluntary framework that governs much of the relationship between insurers and credit hire organisations in the UK. Developed from industry agreements that emerged in the 1990s and evolved over successive revisions, its purpose has always been simple: to reduce friction, avoid unnecessary litigation and provide predictable rules for handling credit hire claims. The latest development, the GTA alternative dispute resolution (ADR) scheme, is an attempt to achieve what the credit hire market has spent decades chasing: a quicker, cheaper and more consistent way of resolving disputes over hire charges without sending every disagreement to the county court
Credit hire disputes are the sort of litigation that make the county court look less like justice and more like a garage forecourt after rain.
A second phase of the General Terms of Agreement credit hire ADR scheme is due to begin in September 2026. The change matters because credit hire fights have long consumed insurers, hire companies, solicitors and judges over daily rates, hire duration, mitigation and charges that seem to breed overnight.
Credit hire means a replacement vehicle provided to someone after an accident, usually on credit terms, while their own vehicle is repaired or replaced. The bill then becomes part of the claim against the at-fault driver’s insurer. In plain English: someone needs a car, someone else gets the invoice, and the lawyers argue about whether the invoice has eaten too much.
The GTA is a voluntary framework used by insurers and credit hire organisations to manage those disputes. But voluntary frameworks have a habit of leaking. Claims currently fall outside the GTA 61 days after invoice presentation if unresolved, with common law negotiation and litigation often taking over.
Phase 2 introduces binding arbitration for voluntary GTA members for unresolved credit hire invoices under £10,000 after that 61-day point. The aim is to keep lower-value disputes inside an online industry process rather than sending them out into county court, where they join the general queue and lose the will to live.
The numbers explain the attraction. The latest GTA daily rates review used more than 16m vehicle-group pricing data points. Average credit hire claims have risen from about £1,600 across 2014 to 2021 to more than £2,000 from 2022 onwards. Fewer than 2% of GTA cases reportedly end up in litigation, but more than 80% still settle below presented invoice values. That is a lot of arguing to produce a discount.
The ADR scheme changes incentives. If an insurer made a reasonable offer in time and the arbitrator agrees, the settlement can be reduced and the hire company pays the fee. If the insurer failed to make a reasonable offer and the hire company’s figure is upheld, the settlement can receive an uplift and the insurer pays. This is dispute resolution with a small cattle prod.
For lawyers, the impact is mixed. Many lower-value disputes may leave the court track. Higher-value claims, fraud allegations, multi-vehicle incidents and linked injury cases will still need legal work. That may be healthy. Lawyers should be used where judgment matters, not where everyone is arguing over invoice archaeology.
For motorists, the benefit is practical. Fewer court fights mean fewer demands for detailed financial disclosure and less chance of being dragged into a dispute they never wanted.
Credit hire will not become peaceful. It is too good at being itself.
The scheme will depend on trust in the decision-makers and consistency in outcomes. If parties feel arbitration simply creates a faster way to be annoyed, litigation will return with a tow truck. If it works, it may become a model for other low-value, high-friction claims.
But ADR may keep more of the mud off the courtroom carpet.
Author: Marcelo Williams
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