Why So Few Credit Hire Cases Prove Impecuniosity (and How Handlers Can Close the Gap)

Disclaimer: This note is general guidance, not legal advice.

Keoghs' 2026 benchmarking data shows a stubbornly low litigated impec success rate. The FCA's Financial Lives data shows a population with thin financial buffers. The lever that bridges the two is operational, not legal.

Keoghs published its 2026 Credit Hire Benchmarking Review on 19 May. The headline number for any handler running a credit hire file is this. Fewer than 10% of litigated cases in 2025 succeeded in proving impecuniosity.

The Financial Conduct Authority's most recent Financial Lives data, set out in its press release of 13 May 2025, found that one in ten UK adults have no cash savings at all, and another 21% have less than £1,000 to draw on in an emergency. One in four UK adults are recorded as having low financial resilience.

Those two sets of numbers don't measure the same thing. But the distance between them is the question every credit hire operation should be asking itself this quarter.

What the two data points actually say

The Keoghs figure is about cases where impec was tested in court and the claimant's evidence was found sufficient. Keoghs frames the under-10% success rate as a structural limit on recovery, observing that litigation activity is up but successful outcomes are not following it through. The review recommends "selective litigation, early financial investigation and cost discipline" as the lever both sides should be pulling.

The FCA figures are about the cash savings position of the UK adult population. Roughly 31% of adults sit at or below £1,000 in cash. That isn't a count of who would meet the legal test for impecuniosity, but it is a useful indicator of how thin financial buffers really are for a meaningful slice of the people who turn up in a credit hire file.

Why this matters in cash terms is simple. Impecuniosity proven means the full credit hire rate is recoverable. Impecuniosity not proven typically means Basic Hire Rate, often a third or less of the original quantum. On a four to six week hire, the difference between proving and not proving is regularly the entire value of the claim.

Why the legal test is stricter than "low savings"

The starting point is Lagden v O'Connor [2003] UKHL 64. Lord Nicholls set out the test that has anchored every credit hire impec argument since. Impecuniosity is not just low savings. It is the claimant's inability to hire a replacement vehicle at Basic Hire Rates without manifest financial hardship.

That means a court doesn't just look at the current account balance on the date of the accident. It looks at available credit, income, savings held elsewhere, asset position and the practical ability to draw on alternative funds. A claimant with £200 in their current account and an unused £2,000 limit on a credit card is unlikely to meet the test. A claimant with £1,500 in their account and £3,000 of unsecured debt approaching its limit may well do so.

The FCA headline figures are suggestive of a population that may include a lot of impecunious people. They are not a count of who would actually clear the Lagden bar. That distinction matters when you're building an argument that has to land with a Deputy District Judge on a Friday afternoon.

Where handlers actually lose impec

If the legal test is settled and the population is plausibly there, why is the litigated success rate so low? Five reasons turn up on file after file.

• Time. Bank statements arrive late, sometimes after Basic Hire Rate has already been pleaded against the claim. The defendant insurer is then arguing on the back foot data the handler should have had from the start.
• Completeness. Current accounts arrive but credit card statements, savings accounts, income and recent loan agreements often do not. The picture has holes in it, and a defendant lawyer will find every one.
• Cross-referencing. Income declared in a witness statement has to match the money actually hitting the bank account. Doing that manually across multiple accounts and months is two to three hours of handler time per file. It is also exactly the work that wins or loses the impec argument.
• Disclosure timing. Recent guidance has continued to tighten expectations around early disclosure of financial documents in credit hire matters. Late or thin disclosure is increasingly being treated as a substantive credibility problem, not a procedural one.
• Argument structure. A bare assertion that "the claimant had less than £X available" is not a Lagden argument. It is a number. The Lagden argument is about hardship, alternatives and the reasonableness of the BHR alternative. The witness statement and the schedule have to be written in that register.

The Keoghs review itself recommends "early financial investigation and cost discipline". From the claimant side, that translates directly. Build the financial picture earlier. Build it more completely. Lead with it, not behind it.

What an impec assessment tool actually does

CreditHire Assist's impec assessment was built around the five problems above, not as a clever feature but as a structural answer to where handler time gets eaten.

The tool pulls a structured financial picture from the documents that have been disclosed. Current accounts, credit cards, savings, payslips. It flags gaps the file will need to fill before the impec argument goes out. It cross-references income declared in the witness statement against actual credits hitting the bank, and surfaces any inconsistencies that a defendant will spot in two minutes if you don't.

The tool also drafts the impec argument in Lagden language. Hardship, alternatives, reasonableness, manifest financial difficulty. Not "the claimant had a low bank balance", which is a number a court can dismiss, but the test the court actually has to apply. A job that takes a handler two to three hours per file becomes ten to fifteen minutes of review. That is the difference between settling the weak files early at BHR, and pushing the strong ones through with a full evidential pack on day one.

The "1 in 10 versus 1 in 3" point, made honestly

It is tempting to put the Keoghs <10% number next to the FCA's combined 31% figure and call it a 1 in 10 versus 1 in 3 story. That comparison overstates the case, and a defendant lawyer reading the piece will pull it apart on day one. The numbers measure different things.

What the data does support is this. The litigated impec success rate sits well below the proportion of UK adults whose financial position is plausibly within the impec range. That gap is the opportunity. It isn't in the legal test, which is settled. It is in the time-to-evidence, the completeness of the financial picture and the way the argument is framed. Move on that and the structural limit shifts.

Six things to check on your impec workflow this week

1. How soon after first contact do you start building the financial picture, hours, days or weeks?
2. Are you asking for credit card statements and savings, or only current accounts?
3. Do you cross-reference declared income against actual bank credits before pre-action correspondence goes out?
4. Have you mapped the Lagden test against your impec witness statement template?
5. When impec is disputed, how long does it take your team to build a full evidence-based response?
6. Remember the financial check is against all heads of claim, so includes credit repair costs, write-off values, storage and recovery costs.

If the honest answer to any of those puts you in the back-foot category, the Keoghs review has just told you where the recoverable value is leaking from.

FAQ

What is impecuniosity in credit hire?

Impecuniosity is the legal test established in Lagden v O'Connor [2003] UKHL 64 that allows a claimant who could not afford to hire a replacement vehicle at Basic Hire Rates without manifest financial hardship to recover the full credit hire rate rather than the BHR. It is not a test of low savings alone. It considers available credit, savings, assets and alternative funds.

What did the Keoghs 2026 Credit Hire Benchmarking Review say about impecuniosity?

Keoghs reported that fewer than 10% of litigated credit hire cases in 2025 achieved a successful impecuniosity outcome, describing recovery as "structurally limited by low impecuniosity success rates". The review recommends selective litigation, early financial investigation and cost discipline.

What evidence do you need to prove impecuniosity?

A complete financial picture covering the relevant period. Current account statements, credit card statements, savings accounts, evidence of regular pay, evidence of partner income where relevant, and a witness statement that frames the position in Lagden terms (hardship, alternatives, reasonableness) rather than as a bare statement of bank balance.

Why do so few litigated credit hire cases succeed on impecuniosity?

Most files lose on evidence and timing, not on the legal test. Late disclosure, incomplete financial documents, lack of cross-referencing between declared income and bank credits, and impec arguments framed as low-savings narratives rather than Lagden-test arguments all contribute.

What do the FCA Financial Lives figures mean for credit hire?

The FCA's May 2025 release reported that one in ten UK adults have no cash savings and a further 21% have less than £1,000. Combined, around 31% have less than £1,000 in cash. That doesn't directly translate to 31% of claimants meeting the Lagden test, but it indicates that the population of claimants with thin financial buffers is large.

How does CreditHire Assist help with impecuniosity arguments?

CHA's impec assessment tool pulls a structured financial picture from disclosed documents, flags gaps and inconsistencies, cross-references declared income against actual bank credits, and drafts the impec argument in Lagden language. It cuts a job that typically takes two to three hours per file to around ten to fifteen minutes of handler review.

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