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Opinion on the role of Alternative Business Structures (ABS) within the Legal Expenses market is divided. While some providers have indicated that a move to becoming an ABS may be a potential solution to tackle up and coming challenges in the market as result of changing regulation and legislation, Arc Legal Assistance believes that becoming an ABS is not the answer.


Helen Withers, Managing Director of Arc Legal has stressed that the company has no plans to go down the ABS route. The ABS model presents an opportunity for conflict between the commercial needs of the Legal Expenses provider and the insured.


The Arc Legal model ensures that there is no conflict as the insured is provided access to independent law firms who manage the entirety of the legal proceedings aspect of a claim. This means the insured receives independent legal advice with no potential for conflict with the interests of the insurer. Arc Legal outsources the whole legal process, ensuring that the decisions made by the solicitor will be based entirely on the legal proceedings of a claim.


Helen also discussed what impact the proposed referral fee ban, as part of the LASPO Act, will have on a legal expenses insurer’s consideration into becoming an ABS. Under an ABS model, there may be the potential for legal expenses firms to ensure that they do not lose a significant proportion of revenue despite the referral fee ban.


The partnership that setting up an ABS effectively creates, offers the law firm and legal expenses provider with the potential of sharing the profit generated from personal injury cases. While referral fees will not be paid, this share of profits will replace the income a legal expenses firm loses from the referral fee ban. Arc Legal generates 100% of revenue through premium. Referral fees do not make up any aspect of Arc Legal’s revenue who will therefore be unaffected by the referral fee ban, and would receive no benefits operating as an ABS for this purpose.


Helen was speaking to Post Magazine. The full article can be found on their website at

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