SRA imposes controls on relationships within AA group after ABS award

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7 November 2013

AA: law firm can use name but must be careful with branding

The Solicitors Regulation Authority has imposed a series of conditions on AA Law that aim to control the relationship between the law firm and the breakdown giant’s insurance and claims-handling operations.

The details of AA Law’s alternative business structure licence were released yesterday and include a waiver from the separate business rule. A near identical set of conditions were imposed on Saga Law, the two being ultimately owned by the same private equity company, Acromas.

The waiver only extends to the prohibited separate business activities that are currently done by Automobile Association Insurance Services (AAIS) and Claims Handling Management Company Ltd (CHMC), which provides claim-handling and credit hire and repair services to Acromas customers. These are the conduct of uninsured loss recovery and third-party claims up to, but not including, litigation.

The conditions say that other than for these, “no formal legal assessment of fault may be undertaken on any matter by CHMC or AAIS that may form part of any matter that could, regardless of probability, proceed to litigation, and any informal assessment of fault may be conducted only for the purposes of directing a claimant to the appropriate firm or department. The view reached by the individual conducting that informal assessment as to fault should not be communicated to the claimant”.

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Where work is transferred from CHMC or AAIS to AA Law, “it must be made transparent to the client, in writing, the point at which AA Law takes over conduct of a matter and the client becomes subject to the protections afforded to clients of an SRA regulated firm”.

However, no work can be transferred the other way from AA Law.

Further, the directors of AA Law who are also involved in CHMC and/or AAIS – Janet Pell, Shahid Mahmood, Andrew Boland and Andrew Strong – are not allowed to communicate to those companies, or make use of, any client information they have access to in their roles at AA Law.

The SRA has also required that AA Law’s branding and logo are “sufficiently different” from that of CHMC and AAIS that it can be easily identified as a separate business, although it will still be able to use “AA” as part of its corporate or trading name.

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