You may be entitled to legal expense insurance as part of a wider home, business, motor or bank insurance policy, either as part of the policy or as something that has been tagged on for an additional premium. Some credit cards may also provide legal expense cover too.
What is Before the Event Insurance?
This type of legal expense insurance is normally known as Before the Event (BTE) cover. It provides you with support if you need legal assistance in the future and would usually cover common types of disputes, such as personal injury, consumer contracts for goods or services and property disputes.
Under such a cover, you would typically be able to claim your legal costs, including solicitor fees, costs of expert witnesses, court fees and legal costs for the opponent should they win the claim. However, it will not cover compensation that you may be ordered to pay if you lose the case.
Most insurers will have a panel of solicitors whom they have already vetted and agreed on payment rates with. They will prefer to use them for commercial and quality-control reasons and will refer you to them should you require legal cover.
But Can I Use My Own Lawyer if I am Claiming Under Insurance?
Yes, your insurers may encourage you to stay with their panel solicitors, but you are not obliged to do so. Under the Insurance Companies (Legal Expenses Insurance) Regulations Act 1990, a policyholder has the freedom to choose their own legal representation.
Many policyholders prefer to appoint a solicitor that they know and trust, especially if they have represented them previously. You may also feel that your interests will be better served by your own solicitor, especially if the legal proceedings require specialist knowledge and are complex.
Note, though, that the right to appoint your own lawyer does not arise at the start of the policy and that the terms of the policy will probably include a reference to the insurer’s panel solicitors. You can use your own solicitor from the point where legal ‘inquiries or proceedings’ begin. The definition of ‘proceedings’ has been interpreted broadly and a landmark case determined that the policyholder’s right to appoint their own lawyer started as soon as a cause of action arose. Case law has also confirmed that the policyholder has the right to choose their own lawyer in mediation proceedings as well as substantive proceedings.
If such circumstances arise and you want to use your own lawyer, you should seek confirmation from your insurers as soon as possible or alternatively, you can ask your chosen solicitor to contact the insurers directly.
Can My Insurers Place any Limits on Whom I Can Appoint?
If you opt to select your own lawyer, your insurer and the lawyer you choose must come to an agreement regarding the fees and hourly rates, as well as the extent of the work that will be included in your policy. As per the law, insurers are authorised to establish restrictions on the hourly rates, which can lead to the same conditions being imposed on independent lawyers as those imposed on their panel lawyers. Therefore, you or your solicitor will need to check the terms of your policy to determine whether there are any restrictions or limitations on the fixed hourly rates from the outset.
It is important to note, however, that while insurers can restrict the level of recoverable fees, they cannot set their fixed rates for non-panel solicitors so low that you have no real choice of which lawyers may act for you.
If you would like more information about instructing your own solicitor when claiming under a legal expenses insurance cover, please get in touch via email at info@witansolicitors.co.uk.
