A leading law firm is accusing car insurer Direct Line of wasting motorists’ money on unfair lobbying for restrictions on access to justice - as its shareholders enjoy a £101m dividend jackpot.

Thompsons Solicitors says the owner of the Churchill brand, which made profits of £262m in 2012, should be reducing premiums rather than spending money trying to influence political decisions in its own commercial interest.

The firm cites a statement in Direct Line’s annual results announcement saying it was a ‘leader’ in ‘lobbying for change’ in the debate about accident victims having access to legal representation.

Insurance companies are spending millions attacking claimants

“Decode this and Direct Line wants the government to make it even easier for insurance companies to settle claims cheaply and make more profit,” said Tom Jones, Head of Policy and Public Affairs at Thompsons.

“The overwhelming evidence is that when people have proper legal representation they get more compensation and when they aren’t they get bullied into settling for less than they deserve. Insurance companies are spending millions attacking claimants and undermining their lawyers.

“Thompsons doesn’t work for insurance companies or participate in the merry-go-round of referrals between them and some law firms. We’re determined to expose the hypocrisy of car insurers blaming a ‘compensation culture’ for high premiums when they could reduce them at a stroke if they spent less on lobbying and shared their profits with motorists.”

Direct Line £101m dividend payment

Today’s (11 June 2013) Direct Line £101m dividend payment – equivalent to £25 per policy holder – comes a week after the government announced plans to restrict lobbying by ‘third parties’ while leaving its corporate friends free to do what they like.

The change would leave companies such as Direct Line free to spend as much as they like on lobbying without having to publicly reveal any of the details.

Direct Line’s nine-figure pay-out follows last month’s even bigger dividend distribution by fellow car insurer Admiral, which paid a total of £245m to shareholders from profits made in 2012 - equivalent to £81 per policy holder.

Transport Select Committee is currently reviewing car insurance premiums

The House of Commons Transport Select Committee is currently reviewing car insurance premiums and is due to hear further oral evidence in July.

Thompsons has made a written submission to the Committee calling for action that would stop the merry-go-round of referrals between the insurance industry, claims management companies and some lawyers. This included a ban on ‘third party capture’ and credit hire agreements and the outlawing of claim texts, ‘robocalls’ and cold calling. Read the full submission to the Transport Select Committee.

Putting a stop to hypocrisy within the insurance industry

Thompsons is challenging the insurance industry about the hypocritical arguments it makes about fraudulent claims and the negative effect this is having on injured people and victims of road accidents.

We urge you to contact your MP about this issue and have prepared this letter template as an example. Go to http://findyourmp.parliament.uk/ to find out who your local MP is.