Ockham Holdings subsidiary Highway has been accused of threatening to drop brokers who have made complaints about its uninsured loss recovery partner, Crusader.
Highway passes non-fault claims on to Crusader, which then appoints a legal firm to organise a conditional fee agreement (CFA) policy if there is an injury involved.
Managing director of WiseCall Claims Assistance, Donald Roger, claims he has received complaints from brokers whose customers are being sold CFAs by Crusader, even though they already have legal expenses cover from another insurer.
According to Roger: "If a broker objects to Crusader being involved in the claim, Highway takes the business away from them."
Roger also alleges that Crusader passes on customers to credit hire firm Drive Assist in return for commission, even when free courtesy cars are available. He labelled Highway's business practice "incestuous".
One of the legal firms involved in the sale of CFAs on behalf of Crusader is Seth Lovis & Co, owned by the son of Highway director Quin Lovis.
Crusader is 60% owned by Highway's parent company Ockham Holdings. Highway and Crusader also share two of the same directors, David Poole and Andrew Gibson.
Roger has written to every insurer in the country warning of "bad practice" by Highway, Crusader and Seth Lovis.
It is understood that The Motor Uninsured Loss Recovery Association (Mulra) is investigating the matter, although it would not confirm or deny this.
Chairman of Mulra, David Heynes, recently sent a warning to brokers in a newsletter about "hijacked ULR claims".
He said: "We have found evidence that this is happening. It is dangerous and against clients' interests."
Stuart Davies, general manager of Highway, has denied any wrongdoing. He said: "If the policyholder wants the services of Crusader, they are passed on. I have only had one complaint in the last 24 months and we do not threaten complainants."
On the matter of credit hire vehicles he said: "Highway never guarantee courtesy cars and they are not always available. The cost of the car can be recovered from the other party's insurance so the customer does not pay"
Seth Lovis said: "We have a requirement under CFA Agreement 2000 to check if people have legal expenses insurance and we do this."
WiseCall, which offers legal expenses cover itself, is owned by James Humphries, owner of underwriting agency Tradewise, which was one of the companies dropped by Highway when it stopped accepting new business from brokers at the end of last year.
At the time Highway cited "a number of issues including capacity".