This is undoubtedly the fault of the woman. She entered a main road without due care and attention. The fact that your grandfather had or didnt have his indicator on at the time is irrelevant. I for one would never pull out in front of a car with its indicator flashing. For all she knew he could have been turning in to a driveway further up the road or there could have been an electrical fault with it. Had she driven out in front of and he hit her it would have made her story more plausible but no difference as to her responsibility for the accident. The fact that she struck the rear of his car shoots her argument down in flames and she should consider herself lucky not to get done for Careless Driving.
Love many, trust few, always paddle your own canoe