Legal expenses insurance - an alternative way to fund litigation

 

By Cassandra Anane

With all the up and coming cuts and life’s expenses as a whole, many people who have serious claims to make are struggling to find the funds to pay a solicitor. If your claim does not fit into the remit of a “no-win, no-fee” or a  conditional fee agreement, or you do not qualify for Legal Aid, then one of the most cost effective ways of instructing a solicitor, (whether it be for an unfair dismissal matter or a civil litigation claim), could be Legal Expenses Insurance (LEI).

LEI is protection which can be brought on its own but is more commonly purchased as part of home or car insurance. In general, for an extra premium of approximately £20 a year (depending on the insurer) full cover can be obtained.

There are two types of LEI available to you, these are known as:

  • Before LEI- This would be purchased prior to the event taking place and would cover any future incidents.  If you purchase this type of protection you will be covered against court fees, solicitors’ fees, witness reports, and any compensation which may be offered to the other side
  • After LEI- This will simply protect you should you lose your case

For the most protective cover, insurers would recommend having both car and home content insurance. All LEI policies vary, so provided your claim is not in regards to defamation, small claims or custody hearings, LEI could be the solution to your legal pursuit. However, before embarking on this route four key things should be considered:

  • Value of the claim- An Insurer will not accept a case if the value you are claiming for is likely to be smaller than the cost of the actual case itself
  • Time frame- You must make a claim as soon as the matter arises, which is usually within 180 days of the incident taking place
  • Success Rate-   If your case does not carry a high success rate, a solicitor will not take it on
  • Offers to settle- In most instances you will be obliged to accept the first reasonable offer made to you. If you do decide to reject an offer, then you may be liable for any costs incurred

One of the biggest issues concerning LEI can be the solicitor. There is a lot of conflicting legislation when you compare The Insurance Companies (Legal Expenses Insurance) Regulations 1990 and Competition Act 1990 with regards to whether you are allowed to choose your own solicitor. Many insurers do insist on their panel members acting, however depending on your insurer and your policy, you may be permitted to choose your own solicitor. However the reality of this is that a solicitor cannot be chosen until a decision as to whether to take a case on is made, and unfortunately it could be too late by then.

So if you have any doubts at all, give us a call at Contact Law on 0800 1777 162 or fill in a web-form, and we will be able to discuss all of your options and put you in touch with the best solicitor to help.

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