A leading claims management company today announced plans to take an ownership interest in firms providing legal services.
National Accident Helpline says it had to respond following the government’s decision to raise the small claims limit to £5,000 for RTA-related claims. The new threshold is expected to affect up to 30% of the enquiry volumes generated through the company’s personal injury division.
In a statement to the London Stock Exchange, NAHL confirmed it will play a more ‘proactive role’ in the entire conduct and financing of a case.
Arrangements are being conducted with a number of the larger firms in the PI market with a view to long-term agreements to form an alternative business structure.
NAHL will enter into a form of joint venture with firms to take a share of profit from work processed by the ABS.
The company says it will retain its traditional panel model to provide services ‘in support of generating and triaging enquiries’ and will offer deferred enquiry payment terms to selected panel firms to support incremental volumes.
‘The deployment of these structures will allow us to manage the forthcoming period of demand uncertainty whilst enabling us to grow market share through brand investment and optimise our returns,’ said the statement.
‘The group has been planning for these changes since the initial proposals were announced. Whilst there is no doubt there will be some uncertainty in the short to medium term as all market participants reflect on the proposals, we are committed to maintaining both our market leading position and our relationship with our [panel law firms].’
NAHL confirmed the investment will divert some cash away from the business, but it reassured investors that both profits and cash will ‘normalise over time’ as cases settle. Cash generation is likely to ‘significantly reduce’ in 2017 and 2018 before returning to levels previously achieved.
The new PI regulations – which include a tariff system for whiplash compensation – are set to be implemented in October 2018 and form part of the Prisons and Courts Bill. That legislation will be debated in the House of Commons for the first time on Monday.