Taxi insurer Servico and its agent broker Whiterose Insurance are at loggerheads following comments made in Insurance Times.

In a tit-for-tat exchange, both firms are planning legal actions over claims of non-payments.

Servico is sueing Whiterose principal Pritam Atwal for alleged non-payment of £28,000, but in response, Atwal has instructed lawyers to serve a counter claim against Servico, alleging he lost thousands of pounds worth of business each week that Servico refused to deal with him.

In Insurance Times on October 12, Atwal claimed that Servico director Stephen Arnold would not return his phone calls or deal with existing business he had placed with Servico, after he declined a £60,000 franchise deal.

Insurance Times reported that Servico had ditched the controversial deals following criticism from brokers and the Association of Insurance Intermediaries and Brokers.

Since the article appeared, Atwal said Servico continued to ignore his requests for changes to cover notes for business he had placed previously, before having the summons served against him.

“They've deliberately victimised me because of the newspaper report,” Atwal said.

“This is business that they accepted, that we paid them for.”

Atwal said the only time Arnold had contacted him was to ask him to withdraw his comments to Insurance Times.

Arnold confirmed that Servico had reconsidered its franchise scheme.

“There has been an adverse reaction to our initial proposed franchise fee and we are reviewing ideas with our insurance advisers to decide whether it is economically viable to continue with this plan or not,” he said.

However, Arnold said Atwal's account had been stopped prior to his comments to Insurance Times. “The legal summons against Mr Atwal bears absolutely no relation to his comments to Insurance Times and it will be the decision of the courts to judge whether he has a case to answer,” he said.

Arnold denied he had asked Atwal to withdraw the comments made to Insurance Times.

“When the article appeared, he was asked why he had made such comment,” he said.