Answering your questions in relation to Legal Expenses Insurance
What is Legal Expenses Insurance?
Legal expenses insurance is cover purchased to fund the cost of legal advice and representation in Court proceedings. It is often sold as an optional ‘add on’ to other standalone insurance policies, such as car, home or life insurance.
Legal expenses insurance can help you obtain support and representation in a wide range of legal matters, including:
- Employment disputes – unfair dismissal or discrimination at work
- Personal injury claims
- Faulty goods or services
Legal expenses insurance is typically ‘before the event’ insurance – e.g. before you are involved in something which you need the insurance for.
‘After the event ’ insurance is when you decide to make a legal claim or are defending legal action and the policy provides cover against paying the other side’s legal costs. These are generally standalone policies.
How does Legal Expenses Insurance work?
Usually, provided your case has a 51% or better chance of success, the insurance policy will cover the costs involved in pursuing your case. That may include solicitor’s and barrister’s fees, Court costs and expert’s fees.
If your insurer thinks that there is no “reasonable prospects of success” (or less than 51% chance of success) when assessing your claim and consequently will not cover your legal costs, then you are able to challenge this by having your claim assessed by an alternative law firm. If this assessment does support your claim but the insurance company still will not provide cover, then you can then complain to the Financial Ombudsman service.
How do I know if I have Legal Expenses Insurance?
Legal expenses insurance can typically be found in:
- Building or contents insurance policies
- Bank accounts
- Credit cards
- Care or life insurance policies
Sometimes it is included in a policy without you even having to opt in or pay extra for it. It is always, therefore, worth checking with your insurer whether you do have legal expenses insurance under any of your insurance policies.
Also, it is worth checking if anyone living in your household has legal expenses insurance, as in some cases the policy will cover everyone that lives in that property.
Can I choose Nelsons to act for me under my Legal Expenses Insurance?
We do not currently act for clients on an insurance funded basis in employment law matters. However, many other legal services providers (including those law firms who are on insurance companies’ panels of solicitors) will act for clients on an insurance funded basis in employment law matters.
If your insurer confirms that your cover will apply to your case, they may want you to instruct a firm of solicitors from their elected panel. The insurer is able to do this up until the point where the legal proceedings begin but once they have commenced (e.g. the “claim form” or an ET1 form in an employment law matter issued) or if there is a conflict of interest, you are allowed to choose your own legal representation. This is specified under regulation 6 of the Insurance Companies (Legal Expenses Insurance) Regulations 1990.
Regardless of the timing of your claim (e.g. if you are unhappy with how your appointed panel solicitor is handling your matter), you can request a specific law firm to handle your matter to your insurance company. You are entitled to exercise your freedom of choice to ensure that you have a specialist law firm with whom you feel comfortable representing you.
Will Legal Expenses Insurance over all of my costs?
Depending on the terms of your policy, you may have to pay an ‘Excess’ to your insurer before any work can be done.
In some cases, the insurer will cover most but not all of the costs in your case and there may be additional charges that fall to you to pay.
When should I notify my Legal Expenses Insurance provider?
It is generally best practice to notify your insurer as soon as possible, this is usually stipulated in the policy itself. In some cases, the policy will not cover the legal costs if more than 30 days have passed since you became aware of the potential claim. Your insurer may refuse to cover the claim at all if you notify them of the dispute after the applicable notification period.
When notifying your insurance provider, you will most likely need to complete a form, providing a summary of your claim. After fully assessing the claim and the likelihood of it succeeding, the insurer will then advise you if your claim has been successful or not.
How can Nelsons help?
We know only too well how overwhelming the issue of costs can be when dealing with legal action. We can explore with you whether you have the appropriate cover in place and provide you with sensible and pragmatic guidance in respect of your prospects, the value of your claim and the terms of your insurance cover.
Please call 0800 024 1976 or contact us via our online form for further assistance.