Trading Update

Claims Direct PLC
28 March 2002


For immediate release                                    Thursday, 28 March 2002


                               CLAIMS DIRECT PLC

                      Trading & new business model update

Claims Direct plc ('Claims Direct' or 'the Company'), the leading personal
injury claims management specialist is pleased to announce that its new business
model, based on the methodology employed by Claimline, the business it acquired
in January 2002, has been launched with a new panel of solicitors and insurance
underwriters, and that it has made significant progress in terms of settling
with its claims managers ('franchisees'). It has also recently successfully
opened its own in house customer contact centre at its Telford headquarters and
has been encouraged by recent legal developments prior to its own test cases
being heard.

Trading update

At the time of announcing the acquisition of Claimline on 24 January 2002, the
Company gave an update on current trading, indicating that the run rate of
monthly losses had reduced significantly through progress in reducing its cost
base. However, the number of accepted cases has continued to remain at the lower
rates experienced during 2001 due to lower levels of activity as the new
business model was being developed and due to other uncertainties affecting the
business.

It has clearly taken longer than first expected to launch the new business model
and there has been a correspondingly lower level of marketing activity during
the last few weeks. In addition, it should be noted that the new business model
includes a more prudent income recognition policy, with the average period of
the receipt of premium income from case enquiry being 6-8 weeks rather than the
3-4 weeks previously. The effect of this has been that income generated from
enquiries in February and March will not now be received in the financial year
ending 31 March 2002.

As a result, the monthly run rate of losses has increased during the last
quarter of the financial year ending 31 March 2002 and the previously indicated
second half improvement in performance has not materialised. For the year as
whole, the exceptional costs associated with the franchisee exits including
arbitration costs (c.£3.5m) and the termination of arrangements with Poole & Co.
(up to a maximum of £2.3m), when added to the loss before tax reported for the
six months ended 30 September 2001 of £11.5m, and the second half losses, are
expected to increase the overall losses for the year to around £22m (2000/1:
loss before tax £20.2m).

The new business model features two new after the event insurance policies
('ATEs') with the following premium levels; £500 plus 5% insurance premium tax
('IPT') for road traffic accidents ('RTAs') and £950 plus IPT for other levels
of claim, including employers' and public liability. In the new methodology
solicitors will be able to charge a success fee through a conditional fee
arrangement. In future clients will not have to take out a loan to purchase the
ATE policy, which will now be acquired on their behalf by their solicitor as a
disbursement of running their case.

An improved trading performance is therefore now likely to be delayed until the
first quarter of the new financial year (April - June 2002), by which time the
new business model is expected be fully operational.

The preliminary results for the year ended 31 March 2002, are likely to be
announced in July 2002.

Franchisees

As at the time of writing, 202 franchisees had agreed exit terms. Of the
remaining franchisees, nine are still in discussions with the Company and three
have yet to respond, whilst only 6 franchisees remain in arbitration; it is
hoped that amicable settlements may be reached with these individuals in due
course. These changes to our franchise arrangements have been critical to our
ability to launch the new business model.

New customer contact centre

The new in house customer contact centre will be supported by a new web-based
software system capable of providing the latest online information to staff,
solicitors and clients alike on cases as they progress from initial enquiry to
final settlement. This is a major development in the speed and extent of
information available to those involved in pursuing a claim. The centre will be
capable of handling 2000 calls per day and is expected to improve the Company's
case conversion rates and service standards.

Test cases

The Company has recently been encouraged by certain legal developments, albeit
it is still too early to be optimistic of a final conclusion to the long running
issue of premium recoverability. Nonetheless it is noteworthy that, following
the judgements in Callery vs Gray and Sarwar vs (Allen), that in a third case,
Tilby vs Perfect Pizza, the senior costs judge has supported the fundamental
elements which are the cornerstone of the Company's new business model. The next
stage of Callery vs Gray is due to be heard in the House of Lords 24-25 April,
whilst the Company's own test cases are due to be heard by the senior costs
judge by the summer.

Commenting on the update, Ronnie Henderson, Chief Executive of Claims Direct
plc, said:

'The recent acquisition of Claimline, the launch of the new business model, and
the other developments referred to, are all building the platform from which we
can re-establish Claims Direct's business and restore its profitability and
reputation.'


                                    - Ends -


For further information please contact:
Claims Direct plc                                                  01952 284800
Ronnie Henderson, Chief Executive                          www.claimsdirect.com

Weber Shandwick Square Mile                                       0207 950 2800
Reg Hoare/Christian Taylor-Wilkinson/Claudine Cartwright


                      This information is provided by RNS
            The company news service from the London Stock Exchange