LEGAL EXPENSES INSURANCE

A guide to legal expenses insurance from the employment law experts

Marjon Law, specialist employment lawyers is owner-led by Marc Jones, who is ranked and recommended in legal publications as a leading employment law solicitor, with over 20 years of experience practising solely in employment law.

If you would like urgent advice on legal expenses insurance, please contact us as soon as possible.

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 (eg breach of contract, discrimination and unfair dismissal).

How does legal expenses insurance work?

Most insurance companies have their own panel of legal representatives. 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 these relatively low rates, the work may be done (and often is done) by unqualified staff.

Can you instruct Marjon Law 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 legal representative’s charging rate to that of their own panel rates.

You may be able to persuade the BTE insurance company to pay a higher rate for your lawyer than its panel of legal representatives 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 lawyer 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) expects an insurance company to agree to the appointment of the policyholder’s chosen lawyer in cases that involve large or complex cases (ie employment disputes). 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 their own lawyer when there is a conflict of interest with the insurance company or its panel of legal representatives.

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 lawyer.

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 of legal representatives and you are not happy with those representatives or the person acting for you and would like to change your lawyers, you can inform the insurers and tell them you wish to use your preferred lawyers 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.

The material contained in this web page is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

Why choose Marjon Law for legal expenses insurance claims?

We have been involved with hundreds of employment tribunal claims for clients for over 20 years, many of which have been funded by legal expenses insurance.

As specialist employment lawyers, our clients' interests are paramount to us.

We ensure that all our clients receive the best advice possible.

We can advise you on your legal expenses insurance policy and represent you in an employment tribunal.