Personal injury specialist Life Repair Group (LRG) has claimed that the claims management industry will grow, despite the collapse of The Accident Group (TAG).
In a statement LRG claimed that forthcoming FSA regulations would reinforce its position in the market.
Tim Schools, LRG chairman, said: "The Accident Group clearly represented the market leader in the sector, in terms of sales, in a period where there were many uncertainties in relation to insurance risks and test case challenges.
"It would seem that lower than expected success rates, and their impact on insurance claims, have led to financial difficulties for the group.
"We are confident that with many of the uncertainties now resolved in precedent test cases, there is much needed clarity in the market allowing growing companies, such as ourselves, to provide quality products and services to clients backed by sound legal and financial arrangements with partners."
Legal protection specialist, DAS, has also defended the industry claiming that the market's future is positive.
DAS' after-the-event (ATE) insurance division, known as 80e, claimed that TAG's collapse would not herald its own demise.
An 80e spokesman said: "The flawed business models of TAG and Claims Direct are no reason to doubt the fundamental principles and objectives of providing justice solutions on an ATE basis.
"As part of the insurance industry, DAS has developed its 80e operation from a position of knowledge and experience in the before-the-event market. ATE should be based on insurance and not marketing objectives.
"The key to it is transparent pricing on the one hand and a good relationship with defendant insurers on the other. This is something that claims management companies are often ill equipped to offer, resulting in their demise."
