The future of Pannone’s longstanding relationship with the Co-operative is in doubt as the mutual retailer prepares to ramp up its legal services division later this year.
The Co-op is planning to grow significantly the size of its in-house division, Co-operative Legal Services, after the introduction of the Legal Services Act.
This is expected to see it take the personal injury (PI) services it currently farms out to Pannone in-house. While the work is thought to currently be worth around £1m a year, the Co-op plans to expand this.
The Co-op already handles PI in-house for its millions of members, but after October it will be free to offer these services to the wider market.
Pannone is currently listed on the Co-op’s website as its sole provider of PI services other than those claims relating to road traffic accidents.
“Once the Co-op can be an alternative business structure [ABS], why would they outsource it?” said Russell Jones & Walker (RJW) marketing director Andy Hoe. “After 6 October it could rip up any agreements it has with the firms it works with and employ its own lawyers.”
Co-op Legal Services managing director Eddie Ryan confirmed that his company’s strategy had always been to extend the range of services it offered.
“We’ve dealt with Pannone for about five years and we’ll probably always require someone to handle conflicts of interest work,” Ryan said. “We’ll probably continue to have a relationship with them.”
Pannone partner Andrew Morton claimed “virtually everything” the Co-op does is already handled in-house.
“Our role’s always been to help them with conflicts,” he added. “That won’t change.”