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A clash of interests?

27 January 2012 / Susan Brown
Issue: 7498 / Categories: Features , Professional negligence , Personal injury
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Susan Brown highlights the potential conflicts of interest surrounding ABSs, insurers & motor claims

We are told that insurers are keen to use alternative business structures (ABSs) as vehicles through which they can take control of the whole claims process, from first notification of loss to settlement.

Admiral, for example, has been reported as considering branching into the legal sector to plug the hole that will be created when they can no longer generate referral fee income by referring motor accident victims to law firms. They are unlikely to be the only insurer thinking along the lines that an ABS is an attractive prospect, with the insurer part of the business referring claims to the legal/claims handling part of it, without formal exchange of referral fees, but on the basis that the legal costs recovered when the claim is settled are additional income generated for the business.

Law firms are also exploring the business opportunities offered by setting up ABS as “one-stop shops” for dealing with motor claims. For example, the Parabis

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