“Pieces of eight…pieces of eight…” – Pirate ship or flag of convenience as Admiral ponders legal launch?

Photo: The Telegraph

Is it now any port in a storm for under-pressure insurer Admiral?

Saturday’s Telegraph reported that Admiral, the FTSE 100 motor insurer, is considering branching into the legal sector as it “faces up to the loss of the lucrative referral fees that generate millions of pounds in profits each year.”
According to industry insiders, Admiral must move quickly to replace the loss of income from the fees paid to insurers for information of potential personal injury claimants. 

The Cardiff-based group is exploring plans either to set up its own personal injury law firm where it could potentially direct customers with claims or become a majority backer in one, following the implementation of the Legal Services Act in October this year., when the implementation of “Tesco law” widened the provision of legal services to new investors including retailers, banks, insurers and outsourcing companies – The Four Horsemen of the Apocalypse as far as independent legal advice in the UK is concerned. 

However, as the story of Britain’s over-hyped, and mythical so-called compensation culture rumbles on, insurance companies are becoming increasingly uncomfortable when quizzed about their involvement in various referral fee schemes…and Admiral seems to be no different. We wonder why.

Despite periodic denials that it sells client information, according to official Admiral sources, about 5.6% of its overall profits come from these fees. So who are we to believe when Admiral contradicts its own statements?

Speaking after the referral fee ban was announced in September, the company said: “Admiral does not sell customer data; if one of our policyholders has a non-fault accident, suffers a bodily injury and they require assistance, we will put them in touch with a personal injury lawyer.” So what about the income from referral fees then?

Admiral would not be the first insurer to push into the legal industry. Axa owns Knight Legal Services, a defendant law firm. It has always denied it refers its customers to Knight Legal Services and says it has no plans to start doing so…but what will happen if insuers own law firms?

How can injured people be confident that their accident compensation claims will be handled fairly and with their best interests at heart? It might be tricky to find independent legal advice when the representatives of those causing injury are also investors in law firms that pursue claimants’ rights, or even worse perhaps, set up theit own personal injury law firms…

It would appear that Admiral’s plans are at an early stage and are one of several being considered. However, the news is likely to raise eyebrows across the City with Admiral’s shares having fallen heavily in recent months. A case of who’s next?

So me hearties, let’s observe this “rum do” as they set sail on a steady course for berating personal injury lawyers, stigmatising their clients, perpetuating the myth of a compensation culture and,

oh yes,    …becoming personal injury lawyers themselves??

Can all this be about profit and an attempt to make a flawed business model work? Well, it’s not quite “Neverland”, but you can see it on the horizon, allegedly…



If you want to deliver legal services but can’t be bothered meeting clients, then perhaps you too could become an ABS…

At a time when many lawyers don’t even want to be lawyers, we ask the question “what is driving the demand for Alternative Business Structures?”

Today, legal expenses insurer DAS has taken the next step in its preparations to become an alternative business structure (ABS) by acquiring online legal services company Everything Legal.

Do they really want to be lawyers or do they want to target the soft underbelly of the legal services market – ‘the low-hanging fruit’ as they see it – and leave the tricky, problematic and challenging lawyering stuff to local firms who employ qualified solicitors? 

We have seen Amanda Holden wax lyrical on Good Morning recently as she ‘helpfully’ and uninvitedly highlighted the evils of High Street law firms whilst extolling the as yet unproven virtues of her new employers.

These would be the very same employers who are relying on said High Street firms signing up for their new franchise in order to deliver legal services in towns and cities the length and breadth of the UK.

Will the public get a better service because law firms have a shiny new sign above the door?

Are the public THAT gullible?

There are quite a few legal brands jostling for position in a market they claim is ripe for re-structuring. They claim that the public have been ripped-off for years by unscrupulous, money-grabbing shysters who fleece their clients and pocket fat fees for old rope.

However, the truly ‘ironical bit’ is that they actually think that their brand new brand will instantly engender client loyalty and referrals as they seek to deal the ‘coup de grace’ to local solicitors…by positioning themselves as trusted legal advisors.   

The mixed message that these brands must sell is this:

“Existing lawyers bad – new lawyers good.”

As for the big beasts in the jungle, aka the ‘supermarket sweepers’, whose legal services business model is predicated on hoovering up everything that they think they can plaster their brand across – AND DELIVER AS CHEAPLY AS POSSIBLE… 

can the public trust the lawbreakers when it comes to upholding their legal rights? 

Sorry, we know that this might sound a bit petty and small-minded and self-serving or even insular and parochial, but actually we don’t wish any of them well in their endeavours.


Easy one this…

It’s because we and firms like us the length and breadth of Britain are the best legal services option for the British public. 

Experience, expertise and empathy with a client’s case go a long way to reassuring people that solicitors have their best interests at heart.

When all is said and done, in the brave new world of ABS, is the public going to be any the wiser about how to choose a lawyer? 

On 24th November, the legal sector’s consumer watchdog warned that voluntary quality
marks should not be made mandatory to access part of the market as this could ‘usurp’ the role of regulators.

Elisabeth Davies, chair of the Legal Services Consumer Panel, said:

‘Consumers tell us that specialist expertise is important to them when choosing lawyers.However, in their current form, some voluntary membership scheme claims that their members are better than the market average just can’t be relied upon by consumers.’

The watchword for the public here is ask for a personal referral from family and friends and / or trust the tried and tested specialist legal regulators.

Despite the blurb, do not rely on a ‘flag of convenience.’