Britain’s biggest car insurer Direct Line today confirmed it has been authorised to provide legal services.

In an announcement to the AIM stock exchange, the firm announced it has been granted an alternative business structure by the Solicitors Regulation Authority.

DLG Legal Services, a subsidiary of Direct Line Group, intends to offer legal services to its existing customers. The firm currently has around a fifth of both the UK’s motor and home insurance markets.

The service will be offered in conjunction with Parabis Law LLP and is expected to start on 3 March.

Direct Line’s ABS application was confirmed last summer, when the company pledged its customers ‘will receive 100% of any damages awarded, protecting them from the cost of paying success fees typically levied by alternative legal services provider’.

Clients who do not have motor or family polices will pay a ‘standalone fee arrangement’ under which fees will be deducted from the damages awarded.

Crispin Passmore, SRA executive director, said: 'The authorisation of DLG Legal Services, part of Direct Line Group, is further evidence of the positive changes that the Legal Services Act has ushered in. Competition is good for consumers as we see more firms innovating andseeking to win consumer loyalty.

'The robust authorisation process, targeted regulation and appropriate consumer redress in place gives consumers the confidence to take advantage of this growing choice for buying legal services. Better access for consumers and greater opportunities for legal businesses go hand in hand as the SRA continues to reform and modernise legal regulation.'

Direct Line Group already provides customers of its own Direct Line, Churchill, Privilege and other insurance brands with some legal services in-house and through outsourcing agreements with a panel of law firms.