Acquisition

Claims Direct PLC
24 January 2002





                              CLAIMS DIRECT PLC

                          ACQUISITION OF CLAIMLINE PLC

                                 TRADING UPDATE



Claims Direct plc ('Claims Direct' or 'the Company'), the leading personal
injury claims management specialist, is pleased to announce that negotiations to
acquire Claimline plc ('Claimline') have today reached a successful conclusion.
The Company first indicated at its AGM on 19 September 2001 that discussions to
acquire Claimline had commenced, and confirmed this at the time of its interim
results on 20 November 2001.



Background and reasons for the acquisition



Claimline carries on a personal injury insurance business similar to that of
Claims Direct.  Both Claims Direct and the shareholders of Claimline are
confident that this acquisition is in the interests of both companies. Claims
Direct will benefit from Claimline's innovative business model and its ethical
reputation which is second to none in the industry; Claimline will benefit from
the volume of business that Claims Direct generates through its higher marketing
budget and call centre as well as its greater critical mass and maturity, and
additional funding.



Claimline brings a powerful, distinct and unique brand which has considerable
marketing potential.  It has exceptional relationships with its panel solicitors
and underwriters and has also earned an excellent reputation with liability
insurers.



Together with its additional management expertise, state of the market IT
systems, stronger legal and vetting procedures and lower case leakage ratios,
experienced and professional business partners and bespoke marketing techniques,
Claimline should further enhance the future prospects of Claims Direct.



The acquisition of Claimline will enable Claims Direct to accelerate the launch
of its new business model in two principal ways; first, by the replacement of
its claims manager structure ('the franchisees') with direct client access to
panel solicitors, and secondly, by the introduction of a range of conditional
fee arrangement products to replace the current one size fits all Claims Direct
insurance policy. The two brand names will be run in tandem for marketing
purposes depending on the markets being addressed.



Structure and terms of the acquisition



All the shareholders of Claimline, including Mr Simon Ware-Lane, (the 'Sellers')
have today agreed to sell the entire issued share capital of Claimline to Claims
Direct.  The maximum consideration for the acquisition will be an issue of up to
11m shares in Claims Direct, valued at £1,540,000 based on yesterday's closing
price of 14p a share. Half the consideration will issue on completion with the
issue of the remaining half being deferred in the following way:-



The value of Claimline's book debts will be agreed at completion.  A further
quarter of the consideration shares may be issued on the later of the first
anniversary of completion or on the recovery of half the agreed Claimline debtor
book.  The remaining consideration shares will be issued to the Sellers on the
earlier of the second anniversary of completion or on the recovery of the entire
agreed debtor book. The payment of the deferred consideration will be
accelerated if the Claims Direct share price reaches 30p at anytime before the
second anniversary of completion. On such occurance, the remaining consideration
shares will be issued to the Sellers as soon as practicable thereafter. However
if Claimline does not recover the agreed debtors in full by the second
anniversary of completion, the Sellers are bound to sell in the market (and
remit the proceeds to Claims Direct) such number of consideration shares as net
of expenses equals the amount of the shortfall in the recovery of the agreed
debtors.



If Claims Direct makes any successful warranty or indemnity claims within the
next two years or settles the terms with the Sellers of any claims under the
warranties and indemnities contained in the share purchase agreement, the amount
of any such claims will be set-off against the deferred consideration not yet
paid to the Sellers.



If Mr Ware-Lane and parties acting in concert with him were to acquire Claims
Direct shares or rights over Claims Direct shares that would result in him
controlling 30 per cent or more of the voting rights in Claims Direct, they
would together be required by the City Code on Takeovers and Mergers to make a
cash offer for all of the remaining shares in Claims Direct. Prior to the
acquisition of Claimline by Claims Direct, Mr Ware-Lane controlled 29.77 per
cent of the voting rights in Claims Direct. If the issue of any of the
consideration shares would result in Mr Ware-Lane and parties acting in concert
with him gaining control of 30 per cent or more of Claims Direct, Mr Ware-Lane
has undertaken to sell in the market so many Claims Direct shares as will ensure
that he and his concert parties own less than 30 per cent of the share capital
of Claims Direct thus ensuring that the obligation to make a cash offer for the
entire share capital of Claims Direct is not triggered.



Claimline made a pre-tax loss for the year ended 31st December 2000 of £560,000;
as at 31st October 2001, Claimline had net liabilities of £152,000.



Trading update



At the time of the Company's interim results in November 2001, it was indicated
that performance for the full year would be materially affected by the
inactivity as a result of the lengthy bid process, delays to the business
re-engineering process and other uncertainties relating to premium
recoverability and recovery of outstanding debtors.



Since then, although the level of accepted cases has continued to remain at the
lower levels experienced during 2001, good progress continues to be made in
reducing the cost base.  Progress on recoverability has been slow, although not
without successes, and debtor recovery is making good progress with overdue
amounts having reduced by around £2.7m since the interims.



Since the half year end, the run rate of monthly losses has as expected reduced
significantly. As a result, the second half performance, whilst considerably
improved on the first and closer to breakeven, is still expected to be
lossmaking.



Commenting on the acquisition of Claimline and the trading update, Ronnie
Henderson, Chief Executive of Claims Direct plc, said:



'The modifications and improvements being made to our business model are
beginning to provide a platform from which Claims Direct can re-establish its
business and reputation.



'The acquisition of Claimline and the launch of the new business model should
allow the Company to break-even with significantly fewer cases per month.
Together with our successful cost reduction programme we are more optimistic
that will we achieve our goal of returning to profitability as soon as possible.
'



                                    - 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/Claudine Cartwright



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