Consumer Rights: 'Third party car cover has left me in the lurch'

A motorist faces a legal battle for compensation after a crash ... Debt-ridden business owner wonders whether he should quit now or carry on trading
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The Independent Online

Q. My car's been written off but the person responsible won't pay up. I was driving along a narrow country road and I pulled into my side and stopped when I saw a lorry coming in the opposite direction. The driver braked but couldn't stop and the trailer of the lorry swung round and hit the front of my car. The driver was very good about it and gave me all the details, but when I contacted his office the firm denied liability. My insurance is third party, fire and theft so my car isn't covered and I can't afford to lose the car or to claim in court.



A. First up, read the small print on your insurance policy carefully. You may be lucky enough to have cover for the recovery of uninsured losses – or legal costs cover. That will pay for the costs of a lawyer to contact the lorry driver's firm, set out the details of your claim and negotiate a settlement. The firm will have all its lorries insured and so it will hand the claim over to its insurance company to settle and pay for.

But the insurance company will pay only if it is convinced that the lorry driver was to blame. To win, you need to prove that it was his fault. If you pulled well over on your side of the road and were stopped, you can hardly have caused the accident. But it sounds as if there were no witnesses and the police weren't called. I don't suppose you took any photos. The lorry driver probably had second thoughts about admitting to his boss that he was at fault in case he put his job on the line, or his employer doesn't want to admit liability because his insurance premiums could be affected.

Many drivers have cover for legal costs up to a specified limit without realising it. You may have added it on and forgotten about it or it could be included automatically. If you are a member of a breakdown service, the same kind of cover might be included in your annual fee. If you find you don't have cover, work out how much you've lost and how much your claim will come to. If the car is only insured third party, fire and theft, is that because it's not worth a great deal? If the total you want to claim comes to less than £5,000 it can be dealt with by what's often called the Small Claims Court but is really the special procedure for handling smaller claims in a County Court. The fees are low and the procedure is simple so that you don't need a solicitor. Still, it's important to fill in your claim forms properly with all the details and the arguments you will use to back up your claim so it's best to get some help with that. Get the forms from the County Court or online. Take photos of the spot where the accident happened and draw pictures to show what happened. Your nearest Citizens Advice Bureau will be able to help. Some offer free, half-hour sessions with solicitors to get you started so go armed with as much information as possible.

Q. I've been struggling to keep my business going for the past 18 months. I've managed to pay my suppliers and the wages, and I do a fairly good trade but it has never really been successful because the premises are too small to make enough. I'm six months in arrears with the rent and the landlord is threatening to have me evicted and make me bankrupt. Would I be better to shut up shop and offer to pay the debt off over several years – if I can find a job?



A. You haven't told me enough about the business or your own personal circumstances to advise you fully – except to say you really must get help now. The first question an adviser will ask is whether you're a sole trader, in partnership with someone or running a limited company. You'll need advice on the kind of contract you have for the premises. The landlord can't simply throw you out on the street but he may take legal action against you.

If, as you say, the business has never been very successful, do you think you'd be able to make it pay in future? If not, do you really want to go on struggling? If you do decide to shut up shop, will you be able to pay your mortgage or household rent? If there's no other income coming into your home, you will need advice on what help you can get with rent, mortgage, council tax and whether you can claim benefits to live on until you find a job.

If you owe the landlord more than £750 he can take legal action to make you bankrupt. It depends on how your business is set up as to whether any personal assets you have, such as your home, if you own it, are at risk of being sold to pay the debt. If you have no personal assets and don't own your home, that's less of a worry, but while you're bankrupt you can't be a company director and because your credit rating will be affected you'll have problems getting credit in future. Most bankruptcies are discharged after a year and you can clear the slate and move on so it may be a good option, but the landlord may be willing to accept repayments if you can come up with a reasonable offer. Get advice specific to your situation and think carefully about whether or not you want to keep trying to make the business work.

Landlords are in a difficult position at the minute and evicting you might not be his best option. If you are paying the business rates and keeping the premises in good shape, the landlord could be better off allowing you to stay at a reduced rent, or even giving you a rent-free period, because he could have problems finding a new tenant. Hundreds of thousands of businesses are starting up but most aren't taking on premises. If his property lies empty for any length of time it will become vulnerable to crime and leave him with bills to pay.

However, from what you did tell me, it sounds as if your problems haven't arisen as the result of recession but because the business wasn't viable from those premises in the first place. So you may have to bite the bullet and shut up shop before you run up more debt. The best thing you can do is to call Business Debtline. It's a charity which can advise on all these issues I've brought up and the service is free and confidential. The number is 0800 197 6026.

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