The no-win, no-fee industry is here to stay despite the high profile collapse of The Accident Group (TAG), commentators said.

Its failure could lead to falling costs for defendant insurers as experts predicted a shift towards solicitors taking cases direct and the demise of big claims managers.

Andrew Twambley, partner at Amelans Solicitors, said: "Is this the end of no-win, no fee? No, but it is the end of the big accident management firms because the direct approach will grow. Solicitors will pitch direct with no-win, no-fee agreements."

Abbey Legal Expenses managing director Chris Ward said: "Claims companies used these questionable models at the expense of insurers. This won't be allowed to continue."

Tony Buss, assistant general manager at DAS, said: "TAG's model added an unnecessary layer of costs to the claims process."

Market leader TAG's demise also removes the inflationary pressure of its £500 guaranteed minimum payout from the market.

Others predicted that before-the-event (BTE) policies would gain from the bad publicity.

Michael Horrocks and Craig Livesey of PricewaterhouseCoopers were appointed as joint administrators of TAG's parent, The Amulet Group, on 30 May.

Edinburgh personal injury firm Waterman's Solicitors is believed to be among several bidders interested in acquiring parts of TAG.

Tory MP Edward Garnier QC had expressed his concerns about the no-win, no-fee industry when he was shadow attorney-general.

On the collapse, he said: "[It] illustrates the fragile nature of access to the legal services market.

" Another avenue of access to the law has been cut short. There is very limited legal aid, the no-win, no-fee market is pretty limited and has become even more so."