Our client’s are often confused about their rights to claim assistance with their legal costs under their insurance policy.
You may have legal expenses insurance to covers the cost of your claim. (A reference to this is often contained in household contents insurance policies). Our clients have told us that insurers can be unhelpful. The insurers often give the impression that you do not have the right to chose your own solicitor and that you must use their panel solicitor.
The panel solicitor will be a firm who has entered into an agreement with the insurance company the terms of which are likely to include the payment of a referral fee to the insurer reduced hourly rates in return for volume work.
Will you get the same quality of service and experience that your matter needs when using a panel solicitor? You might is the answer although we have many clients who come back to us dissatisfied with the service and the level of advice given by the panel solicitors. It is a little like going to Asda or Waitrose and it depends on what you want. Proper quality service does cost more.
So what can the insurer insist on? They can insist that a panel firm issues proceedings if you want the insurance company to cover the entire cost of litigation. Your legal costs will only be covered by your policy after proceedings have been issued. After that you are entitled to choose your own solicitor.
You may find it helpful to refer your insurers to their own regulations, and to the case law set out below.
The right to choose your own solicitor is contained in regulation 6 of the Insurance Companies (Legal Expenses Insurance) Regulations 1990, which states:
“(1) Where under a legal expenses insurance contract recourse is had to a lawyer (or other person having such qualifications as may be necessary) to defend, represent or serve the interests of the insured in any inquiry or proceedings, the insured shall be free to choose that lawyer (or other person).
(2) The insured shall also be free to choose a lawyer (or other person having such qualifications as may be necessary) to serve his interests whenever a conflict of interests arises.
(3) The above rights shall be expressly recognised in the policy”.
The right was clarified in the ECJ case Erhard Eschig v Uniqa Sachverischerung AG Case C-199/08. This confirmed you have the right to choose your own solicitor, but only once proceedings have been issued. (Some insurers will pay your chosen solicitor to issue proceedings for the sake of continuity, but they are not legally obliged to do so).
Although insurers may try to impose a low hourly rate on your solicitor, the agreed rate must be reasonable. The case of the Brown- Quinn v Equity Syndicate Management Ltd confirmed not only your right to choose your solicitor, but also that their reasonable hourly rate should be paid. Your solicitor’s hourly rates should not be artificially lowered to match a panel solicitor’s rates- (and you should not be liable for the difference). Exercise your choice and make your own decisions about who you would like to work with.
