RAC Insurance faces allegations it failed to honestly and reasonably assess 43 third-party hire car claims, with the alleged intent of causing a provider economic harm.
International Vehicle Solutions Pty Ltd, trading as Keep Driving, filed proceedings in the Federal Court of Australia on August 29, 2025. The details of the case emerged through a judgment delivered by Justice Vandongen on February 18, 2026, which dealt with a procedural application but in doing so outlined the nature of the dispute.
Keep Driving's business model is simple. It provides replacement cars to customers involved in motor vehicle accidents at no upfront cost and then seeks to recover the hire fees from the at-fault party or that party's insurer. In this case, that insurer is RAC Insurance Pty Ltd.
According to the judgment, Keep Driving alleges that RAC owed its insured drivers an implied obligation to act with utmost good faith - requiring it to honestly and reasonably assess third-party claims and take reasonable steps to resolve them within a reasonable time. Keep Driving says RAC failed to meet that standard across 43 separate claims over a period of about three and a half years.
A schedule attached to Keep Driving's concise statement sets out the details: the customers involved, the dates of the accidents, the drivers alleged to have been at fault and insured by RAC, and the amounts claimed for replacement vehicle hire.
The claim goes further. Keep Driving alleges that RAC's conduct was carried out with the intention of causing it economic harm, and that this amounted to the tort of causing loss by unlawful means. The allegations remain untested.
The February judgment itself did not deal with the substance of those allegations. It addressed a suppression order application brought by RAC, which argued that Keep Driving's concise statement contained information disclosing the substance of without prejudice settlement communications — including RAC's assessment of claim amounts, its settlement offers, and its reasons for disputing or limiting certain claims.
RAC sought to suppress that information for 10 years or until further order. Keep Driving did not oppose the application but submitted that any order should remain in force only "until further order."
Justice Vandongen granted the suppression order in part. Rather than imposing the 10-year restriction RAC had asked for, the Court ordered that the unredacted concise statement not be disclosed until 4:00 pm on April 2, 2026. The reasoning was straightforward: if a non-party - such as a driver involved in one of the relevant accidents - were to access the document before the privilege question was resolved, any protection ultimately found to exist could be rendered meaningless.
A redacted version of the concise statement, filed by Keep Driving on October 15, 2025, remains on the Court file as an unrestricted document.
Pleadings are expected to close on March 9, 2026, with a case management hearing listed for April 2, 2026. The case is International Vehicle Solutions Pty Ltd (Trustee) v RAC Insurance Pty Ltd [2026] FCA 121 (Federal Court of Australia, WAD 306 of 2025). The substantive allegations have not yet been determined.
