Direct Line Group extends commitment to providing insurance customers with affordable access to legal services

Direct Line Insurance Group plc ("Direct Line Group" or "the Group") today announces its intention to extend the provision of legal services it offers to its customers. Legal services are planned to be offered through a newly formed and wholly owned law firm, DLG Legal Services Limited ("DLG Legal Services"), which will operate in partnership with solicitors Parabis Law LLP. Direct Line Group has submitted an application to the Solicitors Regulation Authority ("SRA") for approval and licensing.

Direct Line Group already provides customers of its own Direct Line, Churchill, Privilege and other partner insurance brands with some legal services in-house and through outsourcing agreements with a panel of law firms. Following a number of legislative changes and regulatory reforms in the industry, Direct Line Group has been considering the impact of these developments, including their impact on its customers, and now believes that it is in the clear interest of its customers for Direct Line Group to provide a broad range of legal services.

It is with this objective in mind that Direct Line Group intends to launch DLG Legal Services. The new law firm will provide Direct Line Group customers with an affordable range of legal services, including legal advice and management of their personal injury or non-injury claims, including debt recovery, employment and contract issues.

Customers who have already purchased either Motor Legal Protection ("MLP") or Family Legal Protection (“FLP”) with their motor or home insurance and choose to be represented in their claim by DLG Legal Services will receive 100% of any damages awarded, protecting them from the cost of paying success fees typically levied by alternative legal services providers. Own brand MLP and FLP products will continue to be offered on an opt-in basis and will not be bundled with other add-ons to policies. Customers will also be able to appoint a solicitor of their own choosing, in line with existing policy terms and conditions.

Direct Line Group will also provide customers who have chosen not to purchase an MLP or FLP policy with affordable access to justice through DLG Legal Services. Where this occurs DLG Legal Services will agree a standalone fee arrangement with the customer under which fees will be deducted from the damages awarded, on a basis designed to maximise customer compensation after deducting case costs and be proportionate to the risk taken by DLG Legal Services. This fee structure will differentiate DLG Legal Services within the market as a firm whose customer offering is founded on ensuring affordable access to justice rather than levying the maximum permissible charges, which may see claimants lose 25% of any damages awarded as success fees, as is charged by some other legal providers.

As was the case before the launch of DLG Legal Services, Direct Line Group believes that customers who choose to buy MLP or FLP before needing to make a claim for uninsured losses will continue to benefit from better value protection against the risk of incurring legal costs, whilst also ensuring that for claims which do not involve injury they continue to receive affordable access to justice.

DLG Legal Services is not expected to make a material contribution to Direct Line Group profits.

Paul Geddes, Chief Executive Officer, Direct Line Group, commented:
"We've decided to launch a law firm to extend the legal services we provide to our insurance customers. We have the opportunity to protect our customers from excessive legal costs, especially in the event of a personal injury claim.

"It will also help our customers to have affordable access to justice, should they need it. This is a key concern of the Government at a time when fewer and fewer Britons are eligible for Legal Aid as a result of tougher means testing. For all these reasons, we think the time is right to launch a competitive legal services business."

Tim Roberts, Senior Partner, Parabis Law LLP, commented:
"This is a very significant development in a period of major change in the delivery of insurance and legal services. Direct Line Group is putting itself at the forefront of providing cost-effective quality legal services to its customers and we welcome the opportunity to be its legal partner."

The law firm structure will be regulated by the SRA, subject to the approval of its licence application. Direct Line Group and its principal underwriting entity, U K Insurance Limited, will continue to be regulated by both the Prudential Regulatory Authority (“PRA”) and the Financial Conduct Authority ("FCA").


For further information, please contact:

Jennifer Thomas
Group Media Relations
Direct Line Group
Tel: +44 (0) 20 8285 8865

Direct Line Insurance Group plc

Direct Line Insurance Group plc (Direct Line Group) is headquartered in Bromley, Kent; it has operations in the UK, Germany and Italy.

Through its number of well known brands Direct Line Group offers a wide range of general insurance products to consumers. These brands include; Direct Line, Churchill and Privilege. It also offers insurance services for third party brands through its Partnerships division. In the commercial sector, its NIG and Direct Line for Business operations provide insurance products for businesses via brokers or direct respectively.

In addition to insurance services, Direct Line Group continues to provide support and reassurance to millions of UK motorists through its Green Flag breakdown recovery service and TRACKER stolen vehicle recovery and telematics business.