Ethical insurance?

“Let's be very careful not to tar Accident Line Protect (Alp) and other professional providers of legal services with the claims manager's brush,” says James Innes, chairman of Abbey Legal Protection, the insurance agent behind the scheme.

In actual fact, the current furore over claims management companies has given Alp, the Law Society-endorsed conditional fee insurance product, which relaunched last October, a rather useful marketing tag – the “ethical option”.

As Chris Ward, the managing director of Alp, explains, its message is a simple one: “Accident Line isn't a claims manager, it's a claims referral service.”

One positive by-product of the bad press about claims management companies is that the public could see lawyers in a better light. “A few years ago, you'd have said that having been injured, the last face you'd want to see is a lawyer's,” says Ward. “But that is now imperceptibly changing, and the opportunity is there for lawyers – and schemes like ours – to trumpet the fact that we deal with the professionals.”

Of course, Alp mark one broke new territory when it was launched in 1995 with its premium of £85 for all personal injury claims. Cynics claimed that such low prices could never last, and were proved right when it was forced to double its premiums in 1999.

The revamped Alp has premiums ranging from £300-£2,900 and it is not going to make the same mistake twice. Indeed, some have accused it of being too pricey. According to Ward, none of its premiums have been challenged by defendant insurers. “Our premiums have been structured in such a way that we believe they fall within the definition of reasonable in terms of the Access to Justice Act,” he says. He is happy to explain to any defendant insurer how its premiums are made up. “I have nothing to hide,” he says.

What lessons, then, have been learned from Alp's first incarnation? “The single biggest lesson is to be firm but fair and to come down firmly on our members who are abusing the rules of the scheme,” Ward says. He believes the new scheme to be much tighter than the old one.

The “delegated authority” nature of the scheme, says Ward, where solicitors do not need prior authority before starting proceedings, remains “vitally important”. But he adds that its weakness depends on how lawyers play the game. The old scheme suffered from “adverse selection”, where solicitors signed up weaker cases and ran stronger ones independently. “We believe that, with the introduction of recoverability, why on earth wouldn't you insure if you know you're going to get your premium back,” says Ward.