Legal Expenses Insurance Solicitors

You may have legal expenses insurance and not realise it.  This is not uncommon as some insurance companies include this automatically and you may not realise that you have such cover.

What is legal expenses insurance?

It is insurance that is taken out before-the-event (BTE) which may form part of your (or your spouse/partner’s) motor insurance, home contents or building insurance, bank account or credit card.

What does legal expenses insurance cover?

BTE insurance may cover personal injury claims and employment claims e.g. breach of contract, discrimination and unfair dismissal.

How does legal expenses insurance work?

Most insurance companies have their own panel of solicitors.  The insurance company provides those firms with claims and the firms agree to work on those claims at lower than normal charging rates.  Due to the relatively low rates, the work may be done by unqualified staff.  The firms on the insurance panels could be based a long way from where you live, and you may not have the opportunity to the meet the person that is acting for you.

Can you instruct IBB Solicitors to act for you?

Yes. Regulation 6 of the Insurance Companies (Legal Expenses Insurance) Regulations 1990 (Regulations) confirms this.

In the case of Brown-Quinn and others v Equity Syndicate Management Ltd and others, the Court of Appeal confirmed that every BTE insurance company must provide its policyholder with the freedom to choose any lawyer and the insurance policy cannot override the Regulations.  The insurance policy must make the freedom of choice clear and without restrictions.

BTE insurance companies often seek to limit a solicitor’s charging rate to that of their own panel rate. However, the insurance company cannot do this if limiting the rate would result in your freedom of choice being meaningless.

You may be able to persuade the BTE insurance company to pay a higher rate for your solicitor than its panel solicitors if you can provide evidence showing why a higher rate should be paid.  Often BTE insurance companies will pay the rates that are recoverable in the county courts where you live for the level of solicitor undertaking the work for you. These rates are normally more than the BTE insurance companies pay their panel solicitors.

How is regulation 6 interpreted?

Some BTE insurance companies interpret regulation 6 as meaning that you have the right to choose a solicitor of your choice when proceedings are issued and not before.  By that stage, you may simply choose to stay with the panel solicitors, as they know your case, rather than instruct new solicitors.  This is of course exactly what the BTE insurers want.

The Financial Ombudsman Service (FOS) has expressed a view in relation to complex cases in Ombudsman News: Issue 26: Legal Expenses Insurance (March 2003) where it stated:

“We expect insurers to agree the appointment of the policyholder’s preferred solicitor in cases that involve significant … employment disputes (especially if there is a considerable history to investigate and assess).”

According to the FOS, if the policy document does not include a clear statement of what it does and does not provide, then prospective policyholders will not be able to make a fair evaluation of the policy when buying it and they may be disadvantaged when making a claim.

The FOS expects an insurance company to agree the appointment of the policyholder’s chosen solicitors in cases that involve large or complex cases, i.e. employment disputes.

There are other circumstances when it may be unreasonable, or out of line with good industry practice, if the insurance company fails to agree to the appointment of your choice of solicitor (e.g. where your own solicitors have already had considerable involvement in the dispute).

However, despite this FOS guidance, BTE insurers frequently ignore it.

What can you do?

Regulation 6 provides that a BTE policyholder shall be free to choose a solicitor when there is a conflict of interest with the insurance company or its panel solicitors.

If there is no such conflict, regulation 6 provides that the policyholder is free to choose a lawyer at least once any inquiry or proceedings are commenced. In more complex cases, such as employment disputes, the FOS has said that it expects the insurance company to agree to the policyholder’s choice of solicitor.

Therefore, depending on the stage reached, if there is a conflict of interest with the BTE insurance company or if an inquiry or proceedings have already begun, you can inform the insurance company that you have the right to choose a lawyer under the Regulations. If that is not the case, and the BTE insurance company insists on referring the matter to its panel solicitors and you are not happy with those solicitors or the person acting for you and would like to change your solicitors, you can inform the insurers and tell them you wish to use your preferred solicitors instead.

In either situation if the insurance company refuses to comply with your wishes, you should consider referring the matter to the FOS, whose contact details are complaint.info@financial-ombudsman.org.uk or on 0800 023 4567.

Contact our specialist legal expenses insurance solicitors today

IBB Solicitor’s employment law specialists represent individuals in pursuing an employment tribunal claim on range of issues including unfair dismissal, discrimination, whistleblowing, victimisation and more. If you feel that you have been treated unlawfully by your employer, we can offer fast, reliable guidance on whether you may be able to bring a claim against them and the prospects of success.

Contact our specialist legal expenses insurance solicitors today on 03456 381381 or email your details to employmentlaw4you@ibblaw.co.uk and we will get back to you promptly.


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