Legal Expenses Insurance - necessary or restriction on freedom?

By Richard Paremain

In an ever increasingly uncertain world we take comfort from whatever protection we can get.  One of those comforts can be found in legal expenses insurance.  There is a good deal to be said for knowing that if things go wrong and we need expert advice it is available to us free of charge.

Legal expenses insurance often isn't very expensive as commonly it is found in car or homes insurance for as little as £10 or £15 and covers you for many millions of pounds of legal expenses and in many cases we do not actually realise we have it.

What do legal expenses do?  Generally, if you are defending a claim against you, you will already have the insurance cover and your insurance company will instruct legal experts themselves to protect their own position.  If you are bringing a claim against somebody else then the legal expenses insurers will again instruct a legal expert.  That legal expert will act for you provided you have good prospects of success in your claim, precisely the assessment which any solicitor in the country would make.  Just because you have legal expenses insurance doesn't mean you can bring completely hopeless claims.

The legal expenses solicitor will often pay to buy your case off the insurance company or will agree that in the event that they are not successful they won't charge the insurance company, but as the loser generally pays in any legal action, the legal expenses insurer actually very rarely pays out any substantial amount in legal fees.

Although once court proceedings are commenced your legal expenses insurer cannot restrict your choice of solicitor, they can restrict your solicitor to one of their panel members who will have entered into a financial arrangement with them, either to pay them a fee for your work or not to charge them in the event that they are unsuccessful.  These panel solicitors will more often than not be large firms who are not local to you, particularly they can be found in big conurbations like Manchester, Leeds, Liverpool and London with little prospect of you speaking face to face so they can truly understand the nature of your case.

If your claim is a good one so that your legal expenses solicitors will take it on, then any other solicitor in the country would also take the case on.  Having legal expenses insurance effectively means all you do it pay to limit your freedom of choice, in which case even if the premium is only £10 pr £15 and is hidden in the overall premium for your insurance, it is a huge price to pay.  With exactly the same case and facts you could go to a local expert who can represent you on a no win no fee basis, face to face and get the full freedom of choice of your representation.

Richard Paremain is a personal injury specialist and a member of the Association of Personal Injury Lawyers.