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The implementation of the Legal Services Act 2007 next year and the future of referral fees are two significant areas that will affect the market going forward according to Arc Legal director, Richard Finan.

The development of in-house legal practices by some legal expenses providers in the wake of the Legal Services Act could create conflicts of interest. Arc Legal uses a panel of well-established, national law firms with a range of specialist expertise to avoid such issues.

The future of referral fees is an issue for legal expenses insurers and brokers alike. Arc Legal, which does not earn any income from referral fees, believes that the removal of referral fees, as proposed in Lord Justice Jackson’s review, could impact significantly on some legal expenses insurers’ operations and bottom lines and drive more to set up their own law firms to protect the income streams. The change could also see brokers developing new structures including joint ventures with law firms.

Richard was speaking to UK insurance broker magazine, Insurance Age. More can be found at

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