Up to 70,000 personal injury victims fighting their claims through The Accident Group (TAG) look set to foot £35m of the millions owed to banks by the failed claims management company.
According to reports the payment, which will come out of their collective claims will reduce each claimant's payment by as much as £500. The news will hamper TAG's chances of selling itself as a going concern.
Under TAG's terms, victims take out an insurance policy, known as after-the-event (ATE) cover, worth up to £900 to cover court costs. After TAG had gambled on compensation pay-outs covering these costs TAG customers now face the possibility of making up this shortfall.
The no-win, no-fee specialist is now being run by administrator PricewaterhouseCoopers and is trying to placate employees who claim the company hasn't paid their fees and commissions.
The latest developments come as Arriva confirmed that it has started investigations into 400 claims submitted by TAG following speculation that claims might have been fraudulent.
