AA gains ABS licence through Bristol joint venture

The AA has become the latest high-street company to be granted an ABS licence by the Solicitors Regulation Authority (SRA) after launching a joint venture with Bristol-based Lyons Davidson.

The new service, AA Law, is expected to kick off on 1 December and will see the company intially taking on personal injury claims and litigation associated with accidents suffered by its members.

The AA applied for an ABS licence a year ago (3 October 2012), with the news breaking in the same week that Saga confirmed its launch of a legal services arm for the over-50s last year – five years after its merger with the AA.  The AA already manages a legal documents service run by insurance giant Parabis.

The AA was one of the organisations earmarked to take advantage of the opportunities afforded by the Legal Services Act as the legislation was being developed, along with other companies such as the RAC and the Co-operative Group.

The RAC laid the foundations for its own ABS move in April, launching a deal with the Aim-listed Quindell Portfolio (5 April 2013),and Direct Line announced its interest late last year (8 October 2013 ).

Lyons Davidson is also involved in an ABS joint venture with FTSE 100 insurer Admiral, alongside Cardiff-based compensation firm Cordner Lewis (8 April 2013).

Since the implementation of the Jackson reforms in April a number of companies have jumped on the opportunities offered in the personal injury sector (8 April 2013). The loss of referral fee income and prevention of after-the-event legal expenses recoverability has led to enthusiasm among volume personal injury outfits to join up with law firms.

Head of AA Law Janet Pell said the move would “ enable us to protect our customers from excessive legal costs”.

The AA is often asked by home insurance customers for advice in dealing with legal issues such as conveyancing or wills – and we plan to expand into offering services such as these as well,” she added.

While the ABS will deal with litigation initially, it is expected to add employment and contract services further down the line.