The introduction of the Alternative Business Structure was one that was initially met with limited action and movement on the part of companies. However, it has begun to pick up pace and organisations ranging from breakdown companies to brand extension companies have applied for and been granted ABS licences. Tesco is one of the biggest names, as it continues its march in various new directions, while insurers Admiral and Ageas have also entered the fray.

The new Alternative Business Structure offers legal companies the opportunity to benefit from outside investment and to offer non-legal services as an addition to their suite of legal products. It also allows non-legal companies to begin offering legal services to their existing client base. It has come as part of an upheaval within the legal industry that has also seen the banning of referral fees under the Jackson reform. It is necessary for companies to apply to become an ABS and it has been possible for these applications to be made since last December.

The so called Tesco law reform has been met with scepticism in some parts but the growing number of organisations to embark on the application process is a sure fire sign that it will prove increasingly popular. Among the most recent names to have been granted ABS status or to have made a move into the ABS sector are those of breakdown company RAC as well as major insurance brands. The former agreed a deal with newly licenced Quindell Portfolio to offer legal services to their customers.

It was announced on 5th April that insurer Admiral has been granted two ABS licences. Admiral Law and BDE Law will be formed by teaming up with Lyons Davidson of Bristol and Cordner of Cardiff respectively. The licences are effective from 1st May so Admiral will be able to start trading immediately under the new joint ventures. Admiral Law will cover the main Admiral business while BDE Law will cover Bell, Diamond, and Elephant, all of which are subsidiaries of the insurance giant.

Admiral isn’t the first insurer to take this step. At the end of March, Ageas teamed up with personal injury law firm NewLaw Solicitors to form Ageas Law. This business will offer assistance to Ageas customers that place non-fault personal accident claims. Ageas, which was formerly known as Fortis, has approximately 8 million policy holders. One of the next possible insurance ABS moves could be Direct Line, who have said that they are looking to become an ABS when they break away from current owners Royal Bank of Scotland.

Insurance companies have been expected to move to become registered ABS companies following the changes in personal injury legislation. They will allow insurance companies to offer legal services to their clients, further tying clients in and persuading them to continue to use their insurance services. What’s more, the new business structure can help law firms that apply for and become ABS organisations to be able to tie up these potentially lucrative deals with major organisations. More deals are expected to be announced.