Car insurance company RSA made up ‘fictional’ charges on bills to rip-off drivers to boost their profits, a judge has decided.
The judge slammed the firm and said if every insurance company followed their example, the costs of minor car repairs would go up needlessly by 25 per cent.
The made-up fees were revealed when Judge Platt, sitting at Romford County Court, examined paperwork presented by RSA customer Kevin Fallows, who was disputing the costs of a repair to his car.
The judge rejected his claim against Hawker Transport but criticised RSA for their charging structure.
The claim involved ‘subrogation’ which is a practice some insurance companies follow to recover no-fault accident costs from other insurers.
The court was told RSA put these bills through a subsidiary RSA Accident Repairs Ltd (RSAARL). The repairs are carried out by RSAARL or subcontracted.
In this case, RSA was trying to reclaim costs from a subcontractor and RSAARL.
The costs that were questioned were RSAARL’s hourly rate of £39.50, which was £3.50 an hour higher than the subcontractor’s rate and a £118.50 bill for sundries, like cleaning valeting the vehicle.
The judge said: “These repairs were actually carried out by the subcontractor and there is no evidence that the vehicle actually went through the hands of RSAARL for repair.
“Indeed the fact that RSAARL have charged exactly the same number of hours as the subcontractor must lead to the conclusion that such items as environmental charge, washing cleaning, de-nibbing final inspection and road test cannot have been done or incurred by RSAARL and this item is simply a fiction invented by RSAARL.”
The judge’s scathing decision included telling RSA the firm had no legal basis for their billing model and that RSA’s subrogation arrangements were not in the public interest.
“The effect of the arrangement which RSA has sought to implement is at best to pass on to the defendant’s insurers some part of the administration expenses incurred by RSA in dealing with the claim thereby inflating the total repair costs. Other and less innocent explanations are not necessarily to be rejected out of hand,” he said in court.
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