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Legal Expense Insurance Policy: choosing your solicitor gets one step easier

I have previously blogged on the growing importance of having Legal Expense Insurance to fund litigation matters given the limitations of alternative funding arrangements.

A big stumbling block though was that many policies dictated which firm of solicitors you could use (at least until proceedings were issued as ruled by the Financial Ombudsman in 2003). They tend to want to use their own panel solicitors simply because they want to keep costs down.

For many clients, by the time they want to call upon their Legal Expense Insurance, it is too late to challenge the terms of the policy about nomination of solicitors.

However, from today, the Financial Ombudsman, has now provided technical guidance that a client can choose their own solicitors from “the point that legal proceedings need to be started”.

This should now cover work from when it is clear that proceedings cannot be avoided because pre-action steps/negotiation have broken down, for example drafting the claim form, instructing a barrister to prepare particulars of claim, getting an expert to provide a report to substantiate the value of the claim.

Another exemption for nominating your own solicitors from the start is ‘conflict of interest’ but I have only really had this invoked successfully in one case – merely being dissatisfied with the panel solicitors chosen by your insurers is usually not enough.

Whilst this is welcome news, I feel that it does not go far enough to ensure consumer choice in this day and age.

Advice for consumers

My advice to clients is to check the terms and conditions of any Legal Expense Insurance to ensure it allows you complete freedom of choice for legal representation before you undertake the same. Although the client is not paying for legal representation directly, they did pay the premium for the policy, and will the one working with the solicitor and the case is one that affects them personally, so why should they not have the ultimate say in who should be instructed to represent them.