The suggestion that the RAC is hoping to offer legal services highlights another major hurdle to non-legal ownership of law firms (see [2005] Gazette, 17 November, 1). The RAC's ownership by Norwich Union would surely lead to conflicts of interest, with the resultant practice not being commercially viable.

There would be a potential conflict where the client's fees are to be covered by an insurance policy obtained through Norwich Union, as this would result in the practice having a personal financial interest in the case.


While insurers' interests generally coincide with those of their insureds, this is not always the case. I envisage situations where the fact that the solicitors are indirectly funding the litigation could affect the manner in which the case is conducted.


Unless there is a solution to these problems, the parties who could probably see the biggest synergies (namely, the insurers) in offering legal services will not be able to benefit from the opening of the market. The same problems of ownership by insurers could also cause problems for larger firms seeking to convert to listed PLC status.


Simon Liddiard, Highgate, London