Direct Line to launch in-house law firm

Direct Line Group is planning to launch an in-house law firm.

The new unit, DLG Legal Services, will be run in partnership with law firm Parabis Law.

Direct Line has applied to the Solicitors Regulation Authority (SRA) for a licence to run the new division.

The firm will provide a range of legal services, including legal advice and management of personal injury or non-injury claims. This includes debt recovery, employment and contract issues.

Direct Line Group already provides customers with some legal services – in house and through outsourcing agreements – through a panel of law firms.

However, the company said that following recent legislative changes, it believed it was in the interests of customers to provide a broad range of legal services.

The company said it did not expect the new law firm to make a material contribution to overall group profit.

Direct Line Group chief executive Paul Geddes said: “We have the opportunity to protect our customers from excessive legal costs, especially in the event of a personal injury claim.

“It will also help our customers to have affordable access to justice, should they need it. This is a key concern of the government at a time when fewer and fewer Britons are eligible for Legal Aid as a result of tougher means testing. For all these reasons, we think the time is right to launch a competitive legal services business.”

Customers who have already bought motor legal protection or family legal protection with their motor or home insurance and choose to be represented in their claim by DLG Legal Services will receive 100% of any damages awarded, so will not pay success fees typically levied by alternative legal services providers.

Direct Line Group’s own-brand motor and family legal protection products will continue to be offered on an opt-in basis and will not be bundled with other add-ons to policies.

Customers will also be able to appoint a solicitor of their own choosing, in line with existing policy terms and conditions.

Customers without these policies who want to use DLG Legal Services will pay a fee, which will be deducted from damages.