Two of the most frequently asked questions Harold Stock & Co’s solicitors are asked are do I need legal expenses insurance, and do I have to instruct a solicitor chosen by my insurance company? The simple answer to both these questions is that whilst you need funding for your claim, you don’t need legal expenses cover sold to you at insurance policy renewal time, nor must you instruct an insurance-appointed solicitor.
So what is legal expenses insurance?
Well, most people are offered legal expense insurance when they renew their motor or household policy. It’s often sold as a product that covers the cost of legal fees for pursuing or defending a claim for many kinds of disputes. Unlike conventional insurance, legal expenses insurance (LEI) doesn’t make a direct payment for a claim like pranging your car: these accidents are covered by your existing insurance. Instead, it covers the legal costs involved in pursuing or defending a claim against a third party for ‘uninsured losses’. Legal costs include the appointment of solicitors, barristers and expert witnesses.
A legal expenses product sold to you as an add-on to a car or household policy is called ‘before the event’ insurance: one taken out after an accident is ‘after the event’ insurance. It’s worth noting that the insurance premium for a legal expenses policy taken before the event is often considerably cheaper than if taken out after the event.
How does ‘before the event’ insurance work?
The broker or insurer will charge you the amount for the add-on, and when you have an accident they pass their claim to one of their ‘panel solicitors’. The panel solicitors have entered into an agreement with the insurer following, in the majority of cases, a number of quality checks, and they will have agreed to pay the highest referral (introduction) fee for your claim. How much are panel solicitors paying in introduction fees? Well, there are no hard and fast rules, but feed now often exceed £750. If introduction fees are paid by a solicitor, however, your broker or insurer should make you aware of this in order to ensure transparency.
Are you obliged to use one of your insurer’s panel solicitors?
The short answer to that is no. There may be a clause in the contract stating that your claim has to go to a panel solicitor, but this is generally quite a rare occurrence. Normally you are given a choice. You can choose representation through one of the panel solicitors, or you can pick the solicitor you think would best represent your interests. Naturally your insurer might be persuasive and encourage you to use one of its panel firms. After all they do have a vested interest. However, they can’t compel you to do so. You have a freedom of choice.
Which solicitor should you choose to fight your claim?
You need to appoint the firm of solicitors you feel will work to ensure you get the best possible outcome. To do that, you need to establish whether the firm has specialist knowledge of the area in which your claim falls. Why is this important? Well, take motor cycle accidents as an example. Motor cycle accidents are very often assessed differently by a non-biker or someone who doesn’t deal with these types of claims regularly.
Harold Stock & Co’s advice is simple: whatever you do, make sure you end up with a solicitor of your choice and funding that suits you.
For further information contact Harold Stock & Co solicitors on 01457 835597 or email info@haroldstock.com.
