We have blogged previously about Legal Expenses Insurance (LEI).
If you have LEI and approach your insurer for cover under the policy to make, for example, a personal injury claim, you may find the insurance company saying that they have the right to appoint a solicitor of their choice to act for you.
We often get asked the question: “Do I have to use the solicitor my insurer tells me to use?”
The true position is that you do not have to go with their choice.
Right to appoint own solicitor for proceedings
It’s not entirely simple but under Regulations dating from 1990 (the Insurance Companies (Legal Expenses Insurance) Regulations) you have the right to select the solicitor who will be appointed in respect of any proceedings.
Of course, the normal procedure with a claim is that your solicitor will intimate it by letter first of all and, in many cases, the claim can be negotiated to a successful conclusion without the need for a court action – in other words, without the need for “proceedings”.
The Insurance Ombudsman has interpreted the 1990 Regulations as meaning that the insurer is not obliged to agree to your choice of solicitor before proceedings are required.
A possible problem with appointing your own solicitor – and a solution
On the face of it, this is a problem: it does not make sense to employ a solicitor who your LEI insurers will not agree to pay under their policy, even if it’s just for any pre-litigation work.
Remember that many solicitors will agree to take on a claim with good prospects on a no win-no fee basis. So, it’s not really a problem, in practice.
The fact – if it is the case – that your LEI insurer will not authorise the employment of a non-panel solicitor before a court action is required is only going to be a problem in fact if your chosen solicitor will charge for the work done during any pre-litigation period.
At Grigor & Young / Moray Claims, for example, we will generally take on a claim, provided it has better than 50% chances of success, no win-no fee.
If the claim can be negotiated to a successful conclusion, you won’t have to pay us anything for our work. You will receive your agreed compensation in full and we will be paid by means of the Voluntary Pre-Action Protocol Scale fee.
If we need to raise court action, we can then approach the LEI insurers and get cover under that policy from the point where court action is required. We won’t charge for any work done prior to the date that the policy cover becomes effective.
LEI insurers will generally require that better than 50% prospects of success exist before they will allow a court action to be raised, so the test they apply is the same one that your solicitor will be applying anyway.
Your aim should be to get the legal help you need at no cost to you, win or lose.
In a LEI situation, solicitors like Grigor & Young / Moray Claims can help in that way, whether or not the LEI actually kicks in – but making sure that the benefit of the LEI insurance is brought into play wherever possible.
We consider that it is important that you exercise your freedom of choice of legal representation under an insurance contract and insurers should not be allowed to wriggle out of their contractual responsibilities.
Particular solicitors are recommended by insurers even in non-LEI cases
For example, if you have a road traffic accident, which results in your vehicle being damaged, you may submit a claim to your motor insurer, indicating that you were also injured and suffered other losses, such as wages or damaged clothing.
Your vehicle damage claim will probably be an insured loss claim under the policy and your insurers will be obliged to help you sort it out.
On the other hand, the injury, wage loss and clothing damage are uninsured losses and a matter for you to sort out yourself.
In that situation, though, you may be contacted by your insurer offering to appoint a solicitor to act on your behalf in respect of the uninsured losses or by a solicitor who has already received your details from the insurer.
In offering to represent you , it will probably seem to you as though this must be the “normal way to do things” and, in our experience, it is unlikely they will tell you the full story, including that you have freedom to choose whichever solicitor you wish.
Insurers’ conflict of interest
Insurance companies may have a vested financial interest in pushing you towards a particular panel firm because it may be that the insurer will receive payment of a referral fee from that firm for generating the business for them – which hardly inspires confidence that the insurer or that solicitor has your best interests as their primary concern.
You have the right to choose which firm of solicitors represents you.
You may be happy with your insurance company’s choice of solicitor and, if so, that’s fine.
An insurer-appointed solicitor is unlikely to be close to where you live if, say, you live in Moray; if, instead, you employ a local solicitor, it can be reassuring to know you can easily meet face to face with your solicitor as and when required.
You need to make sure your solicitor has the necessary experience and expertise in Personal Injury Law, and that’s something you can check.
Whoever acts on your behalf, you need to have confidence in their abilities and their impartiality.
If you prefer to use a solicitor chosen by you, do not allow yourself to be browbeaten into accepting the choice made for you by your insurer.
How we can help
If you are in a situation where an insurer – or an insurer-appointed solicitor – is trying to persuade you to instruct a particular firm of solicitors to handle business on your behalf and you are not sure of your rights or where your best interests lie, feel free to contact us for a chat.
All initial enquiries are free of charge and without obligation. We’re happy to talk it through with you to help you decide what will work best in your situation.