The AA has applied for a licence to become an ABS as it considers entering the legal market by offering its own services to customers.
The motoring group’s move follows news that Saga, with which the AA merged in 2007, has launched a legal services arm for over-50s.
An AA spokesperson said the company was at the first stage of the application process, with no timescale currently set. It currently plans to offer property and employment services, reflecting its focus on home and car insurance.
The spokesperson said: “We’re often being quoted in the potential market for going down the ABS route. We already have a range of legal documents on our website which are run by Parabis. They’re actually very successful.”
Commenting on the production of legal documents published on its website, the spokesperson said the service would likely still be run by Parabis even after a potential ABS conversion.
He said: “In the short to medium term it’s business as usual and I suspect we may well run the legal document service [even after the change], which does work extremely well.”
Saga, which this week launched a legal services division in England and Wales, said its services are aimed at “making legal services more straightforward in terms of charges, language and accessibility”.
The services, named Saga Legal Solutions, will cover will writing, power of attorney, conveyancing and probate, charging fixed prices. It said conveyancing would be charged at a flat rate rather than based on the value of the property, while probate fees will depend on the how complex the estate is rather than its value.
It also said it would offer a ‘Legal Essentials’ package with unlimited legal advice by phone or email, including a free online standard will and £100,000 legal cover.
Saga Services CEO Roger Ramsden said in a statement: “The current legal services market appears to be stacked in favour of the provider rather than the consumer. We aim to change things and have developed services with the customer in mind. People want legal advice and products at a price they understand, can afford and that is agreed in advance.”
The £6.15bn between AA and Saga saw the groups join together in 2007 under the control of private equity houses Charterhouse, CVC Capital Partners and Permira Funds, the largest owners (2 July 2007). The former owned Saga, while the latter two owned the AA.
Acromas, the company behind the AA and Saga, is conducting due diligence on a possible sell-off of part of the businesses, according to a report in The Sunday Telegraph last month.