CREDIT hire firm Auto Indemnity has side-stepped a bitter row between the industry and insurers to clinch a contract with the UK's largest direct insurer, Direct Line. The agreement will see Direct Line refer customers involved in accidents to Auto Indemnity and has prompted the accident management company to call for a 'culture of co-operation and not confrontation' between the industries.

Auto Indemnity won the contract after agreeing to adopt a strategy in-line with the Association of British Insurers' replacement vehicle initiative. The scheme was designed to end the damaging battle over payments between insurers and credit hire firms.

Auto Indemnity chief executive Adrian Palmer said the credit hire industry had to work with insurers and meet them half way. 'Even before the Dimond-v-Lovell decision, Auto Indemnity was positioning itself for just this kind of change in our industry,' he said. 'I am delighted we are now starting to realise the fruits of our strategic co-operation, rather than confrontation.'

An ABI spokesman said: 'We are now keen to extend this new initiative as widely as possible and welcome Auto Indemnity's involvement as an important player in the industry.'