ACE.L Regulatory News (ACE)

24 Sep 2007 10:41

Accident Exchange Group PLC24 September 2007 FOR IMMEDIATE RELEASE 24 September 2007 Accident Exchange Group Plc ("Accident Exchange" or "the Company") SECOND SUCCESSFUL JUDGMENT IN LEGAL CHALLENGE Judgement on the second of the two cases in the legal challenge over enforceability was handed down today and found in favour of the Company's client. Together, these judgements confirm the enforceability of the two variants of the Company's Terms and Conditions which were the subject of the legal challenge. These judgements now clear the way for Accident Exchange to pursue the recoverability of the outstanding hire charges. In the ordinary course of business, the Company provides vehicle hire on credit to the non-fault victims of road traffic accidents and recovers the resultant hire charges from the negligent party or their insurer. This may involve a solicitor being nominated to represent the Company's client and the client issuing proceedings for recovery of those charges. The Company has previously disclosed details of a legal defence to a minority ofclaims outstanding where proceedings have been issued on behalf of such clients.That defence concerned, inter alia, an argument surrounding the enforceability of two variants of the Company's terms and conditions of hire that are no longerused. Two cases were recently heard to conclusion before two separate courts and in both cases, at the conclusion of the trial, judgment was reserved. Judgment in one of the cases, relating to the agreements referred to as the "A" Agreements, was handed down on 31 August 2007. An announcement was issued by the Company on that date detailing the successful outcome which, as of today's date, has not been appealed by the defendant. Judgment on the second of the two cases was handed down earlier today. The Judgein this case also found in favour of the Company's client, thereby confirming the enforceability of the first variant of terms and conditions referred to previously as the "X" Agreement and allowing for the recoverability of the hire charges from the defendant or their insurer. This decision from a Designated Civil Judge sitting in the County Court, like the earlier decision, is binding on the lower courts. It will be significant in influencing the positive outcome of a large number of cases currently listed before District Judges where the enforceability defence has been pleaded. The defendants did not have the opportunity to appeal the decision today but they have 28 days to do so. The Board of Accident Exchange ("the Board") is confident that if leave to appeal were granted, then today's judgment in favour of the Company's client would be upheld. It is the Board's view that these legal actions have cast a cloud over thereputation of the Company and improperly delayed the recoverability of a largeportion of the Company's debtor book. The Company's legal advisers haveidentified evidence that those acting for the defendants in these matters mayhave breached certain elements of their professional codes of conduct and, inaddition, that they may have made unsubstantiated, inappropriate and recklessallegations in the pleadings of many of the cases that have been litigated. TheCompany's lawyers have been given permission to report those involved in thesematters to their respective professional bodies and we believe that this mayresult in an investigation against the individuals and the law firms involved. Steve Evans, Chief Executive Accident Exchange, said: "The result in this case is absolutely in line with the original opinion we hadfrom our legal team and we are delighted to be able to draw a line underneathwhat was effectively a legally inarticulate and intellectually flawed challenge. "Cash flow remains our number one priority and, following this judgement, wewill continue to communicate openly with insurers to allow them a chance tosettle the X, A and other agreements but we will also continue to execute on ourstrategy of litigation to improve our cash flows where such discussions areavoided." Ends CONTACTS: Accident Exchange Group PlcSteve Evans, Chief Executive 08700-116 719Martin Andrews, Group Finance Director 08700-053 649 Numis Securities Ltd 020-7260-1000Chris Wilkinson, Corporate Broking BanksideSteve Liebmann or Simon Bloomfield 020-7367-8888 About Accident Exchange Based in Coleshill, West Midlands, Accident Exchange delivers accident management and other solutions to automotive and insurance related sectors. Fully listed, the stock code is LSE: ACE. This information is provided by RNS The company news service from the London Stock Exchange