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Legal reforms to spark M&A among brokers, law firms and claims management companies

31 January 2013

Legal changes affecting the UK motor insurance market will lead to an increase in mergers and acquisition (M&A) activity among brokers, law firms and claims management companies, according to Deloitte, the business advisory firm.

The Legal Aid Sentencing and Punishment of Offenders Act (LASPO) 2012 is due to be implemented in April 2013. It introduces a series of reforms including the banning of referral fees in personal injury cases, abolishing success fees and introducing a 25% cap on fees in personal injury cases. The changes will mean significantly less revenue for a number of personal injury law firms and claims management companies.

Colin Gleeson, director at Deloitte, said:

“2013 will be a year of unprecedented change for the car insurance market and a series of legal reforms is likely to lead to significant M&A activity in the sector. We expect to see consolidation among personal injury law firms, and also to some extent among brokers and claims managers, in particular those for whom referral fees are a key part of their business model. The reforms should lead to a reduction in both the number and value of personal injury claims.”

 Ends 

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About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities.

Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press. 

Member of Deloitte Touche Tohmatsu Limited

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