ACCIDENT GROUP: dispute involving more than 600 law firms draws to a close


Parties involved with The Accident Group (TAG) litigation involving more than 600 law firms are believed to have agreed an overall settlement figure rumoured to be around £30 million, the Gazette understands.



Insurer Winterthur's group action against TAG panel law firms was originally thought to be worth more than £100 million and so, if confirmed, the £30m settlement figure falls short of expectations.



Richard Spafford, a partner at Reed Smith Richards Butler who represented Winterthur, confirmed the litigation had been settled but refused to comment beyond the following prepared statement.



He said: 'Winterthur, NIG, Rowe Cohen and the vast majority of panel solicitors have agreed settlement terms in the litigation arising out of the TAG scheme, including the separate proceedings relating to recovery of the AIL [Accident Investigations Limited] fee. All parties are pleased that the litigation has come to an end.'



TAG - a claims management firm that sought out personal injury claims on a 'no win, no fee' basis which were then passed on to selected lawyers - folded in 2003 with debts of more than £100 million.



There were two core elements to what might have been the biggest ever action against the profession. The first related to the repayment of an 'investigation fee' paid by law firms to TAG sister company Accident Investigations Limited, which was later ruled to be a then illegal referral fee.



The second action alleged that TAG panel firms were negligent in failing to vet and monitor personal injury claims properly. The firms denied the negligence charges.



While the 'vast majority' of firms have settled, an unspecified number have yet to do so. Kerry Underwood, personal injury solicitor and senior partner at Underwoods in Hemel Hempstead, said: 'I think [Winterthur] is likely to go after other firms as they have been fairly persistent to date.'



Frank Mayer, a partner at Liverpool law firm Legal Risk, said group litigation is far more complex than claimants realise at the outset and results can often fall short of expectations.



'From the firms' point of view, there will be people with quite a lot to swallow. There will be firms with a small number of claims who will be glad to be out of it and some where the amount causes real pain because the overall payments will not be proportionate to the size of the firm,' he said.



No one from Winterthur was available to comment beyond the statement issued by Mr Spafford.



Anita Rice