Exclusive: Saga exits legal services – for now


Savill: Lyons Davidson handling Saga's LEI work

Savill: Lyons Davidson handling Saga’s LEI work

Saga, the over-50s insurance and travel company, has closed its legal services business, Legal Futures can reveal – but said it may yet return to the market in future.

The company was hit by the collapse last year of Parabis, with which it had set up a joint venture alternative business structure (ABS), Saga Law, in late 2013.

Saga’s 2015 annual reported showed that Parabis’s failure cost the company £4.7m, made up of legal fees to put in place new arrangements, the cost of re-doing work by a replacement law firm, and lost profits from the joint venture – Saga accepted £300,000 from Parabis’s administrators in full and final settlement of the £1.3m it was owed.

As a result of the administration, earlier this year Saga stopped taking on new customers to focus on its existing clients, but at the time indicated that it would start up again once new arrangements were in place.

However, a spokeswoman told Legal Futures yesterday: “Since then, we have carried out a review of our legal services business and have concluded that while legal services is an area we remain interested in, we don’t believe it is the right time to take the business forward as we have other priorities at the present time. As a result we ceased all legal services activity in June.

“We do recognise there is an opportunity for Saga in legal services and will return to review it again at a later date.”

Bristol-based firm Lyons Davidson took over the ABS – renaming it from Saga Law to Lyons ABS Ltd – and other contracts as part of a deal to continue the supply of a case management system to Parabis.

Mark Savill, managing director of Lyons Davidson, told Legal Futures: “The Saga statement relates to the market for uninsured consumer legal services. When Parabis went in to administration, our involvement was to assist Saga with the provision of legal services for their customers who have the benefit of motor and household legal expense insurance, and we continue to work together to provide those services.”

The ABS’s accounts, for the 18-month period to 30 September 2015 (shortly before Parabis went under), recorded that it made an £80,000 loss on a turnover of £1.84m, but said it expected to make “significant cash collection with minimal expenses over the next 12 months”.

Originally Saga was bullish about the “significant market opportunity” that it considered legal services to be, and was not shy in criticising traditional law firms – such as with a television advertising campaign that satirised the notion of lawyers being long-winded.

Earlier this year, the AA – which launched an ABS in conjunction with Lyons Davidson at the same time as Saga because they were then owned by the same private equity business – closed its personal injury ABS to new clients, but continues with other legal services.





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