Elite Insurance chief exec ‘very disappointed’ that firm wasn’t consulted about reforms

Divisions within the industry caused by the Jackson Review have deepened, with all but one standalone legal expenses insurer leaving the ABI.

Financial & Legal Insurance walked out of the ABI on Thursday in disagreement over the Jackson reforms, leaving the trade body with Lamp Insurance as the only specialist legal expenses insurer remaining as a member.

Legal expenses insurers claim that the ABI has under-represented their views and failed to consult properly over Jackson, causing both DAS and Elite Insurance to leave.

The biggest sticking point is the ABI’s silence over Jackson’s call for an end to after-the-event insurance premiums, a big revenue stream for legal expenses insurers.

But the ABI strongly defends itself against the claims, stressing it carried out a full consultation. The ABI also has the support of the majority of its membership.

Elite Insurance chief executive Jason Smart said: “We have left on the basis that we weren’t even consulted. We were very disappointed, and in many respects pretty disgusted, that we weren’t even asked for our opinions.”

Elite wanted a counter-proposal to the Jackson Review that suited insurers, lawyers and the injured party, he said. “We’ve been calling for one for a while, but people just don’t want to talk.”

Credit Hire Organisation managing director Tony Baker also had strong words for the ABI, warning its stance breached its own rules. “Their constitution says that, when they are making representations, if there are minority views they should be presenting them,” he explained.

Financial & Legal general manager Mike Timmons commented on his firm’s ABI exit: “We can no longer support an organisation that is working against our business interests.”

He added that the ABI is side-lining the views of dedicated legal expenses insurers, and was instead supporting the views of the larger insurers with legal expenses arms.

“I don’t believe the ABI can now portray itself as representative of the legal expenses market to the government,” Timmons said.

Smart offered an olive branch to the ABI, saying Elite hoped to rejoin the association if it would consider discussions on its stance on the Jackson reforms.

But an ABI spokesman said it would not change its position on Jackson, and denied that any smaller members of the ABI have been sidelined over the larger members.

“We did consult fully on Jackson, as we do on all issues. We don’t look to ostracise any member,” the spokesman said.

“On this issue, the view was very much guided from the ABI board that the over-riding view of all members was reflected in the ABI stance.”

The ABI believes that consumers will benefit from the Jackson Review being rolled out in full, he added.

Alan Cousins, chief executive of Lamp, which is the only specialist remaining, said the firm wanted to stay in the ABI to represent the views of the standalone legal expenses insurers.

“We think there is more chance of changing something from within than outside,” he explained. “Once you’re outside, you have no chance of changing things.”

Meanwhile, DAS chief executive Paul Asplin said his firm had no plans to rejoin the ABI.

Asplin said DAS would not look to change the ABI’s stance, but added: “The lobbying that we do is to lobby the government and get them to reconsider the ill-conceived proposals for the implementation of Jackson.”

The bulk of insurers support the ABI’s backing of the Jackson Review.

Zurich chief executive Stephen Lewis said earlier this year: “We firmly believe that the implementation of Lord Justice Jackson’s proposals will deliver a fair result for all parties – especially claimants, who deserve access to advice, justice and speedy compensation, all of which is currently hampered by the very system designed to protect them.”