FMG gets go-ahead for legal services business

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FLEET management specialist FMG is launching a new legal services business after winning approval from regulators.

The Huddersfield company is launching FMG Legal with NewLaw, a Cardiff-based law firm, to help drivers make personal injury claims following non-fault accidents.

The Solicitors Regulatory Authority has given the thumbs-up to the new entity, which is among the first of its kind in the sector.

John Catling, chief executive, said the service will increase the “stickiness” of FMG in a tough trading environment.

He told the Yorkshire Post: “This is an exciting venture for our organisation. It demonstrates that FMG is growing into new markets.”

The company provides incident management and accident reduction services to blue chip customers and last year drove sales approaching £100m.

The company expects that FMG Legal will process 1,500 personal injury claims a year, arising from the 250,000 incidents it handles.

Mike Richardson, finance director, said the new business will bring in-house services which used to be carried out by law firms.

Previously, FMG would sell on referrals of potential personal injury claims, but new legislation has banned referral fees in an attempt to stamp out spurious claims and a wider ambulance-chasing culture.

Regulators have approved the new model of dealing with personal injury claims, said Mr Richardson, who added that FMG Legal, like any law firm, will act in the best interest of its clients.

He said: “Rather than the economic benefit of these being a referral fee, we are deriving a benefit from the profit and loss account of a law firm.”

Mr Richardson added that in the event of an incident involving personal injury FMG Legal will deal with it in the most responsible and professional way.

FMG already provides its customers with uninsured loss recovery services. A company spokesman said FMG Legal is a natural complementary extension of that service.

FMG Legal will also offer its customers private client services to include wills, trusts and probate, he added.

Mr Catling said: “This is an innovative solution to an issue faced by businesses, which in the past, may have been unsure of who to turn to, or who they were dealing with.

“NewLaw are experts in personal injury claims, and have a similar customer service focus to FMG.

“Our aim is to let businesses focus on running their business, and not risk being side-tracked by complex legal cases.”

FMG was able to enter the legal services arena following the introduction of the Legal Services Act, which allows non-lawyers to own law firms for the first time.

Mr Richardson said FMG’s entry into the market presents a risk to law firms which specialise in personal injury and have relied in referrals in the past.

“There are going to be winners and losers. The smaller, less efficient law firms are going to find it extremely difficult going forward,” he added.

Helen Molyneux, chief executive at NewLaw, said FMG Legal brings together two very experienced and well respected companies. She said: “We have worked hard to establish the right processes, which will provide a streamlined service for businesses and their drivers.

“We share a common focus on conducting our businesses in a fair and responsible way.

“This new initiative will allow businesses to benefit from joint expertise, help ensure that claims are handled more effectively and provide access to a number of legal services.”

FMG has a majority share in FMG Legal; NewLaw holds a significant minority.