Legal Expenses - Why Do Insurers Refuse An Insured's Own Choice Of Solicitor

[mooreda]

I recently made a claim on my Legal Expenses Insurance and wanted to use my own solicitor. However, upon making the claim and my details being passed to a Legal Expenses Insurer called DAS - DAS refused and said that I had to use their Panel Solicitor. Is this right and Lawful?

 

I have read some legislation which as far as I can see say's that I am entitled to use my own solicitor. As such why does the insurance industry appear to be flouting the law?

 

The Insurance Companies (Legal Expenses Insurance) Regulations 1990

 

Arrangements for avoiding conflicts of interests
5.—(1) An insurance company carrying on legal expenses insurance business shall adopt at least one ofthe following arrangements.
 
(2) The company shall ensure that no member of staff who is concerned with the management of claims under legal expenses insurance contracts, or with legal advice in respect of such claims, carries on at the same time any similar activity—

(a) in relation to another class of general insurance business carried on by the company, or

(b) in any other insurance company, having financial, commercial or administrative links with the first company, which carries on one or more other classes of general insurance business.


(3) The company shall entrust the management of claims under legal expenses insurance contracts to an undertaking having separate legal personality, which shall be mentioned in the separate policy or section referred to in regulation 4.

If that undertaking has financial, commercial or administrative links with another insurance company which carries on one or more other classes of general insurance business, members of the staff of the undertaking who are concerned with the processing of claims, or with providing legal advice connected with such processing, shall not pursue the same or a similar activity in that other insurance company at the same time.


****** (4) The company shall, in the policy, afford the insured the right to entrust the defence of his interests, from the moment that he hasthe right to claim from the insurer under the policy, to a lawyer of his choice or, to the extent that the law of the relevant forumso permits, to any other appropriately qualified person.******

and

Freedom to choose lawyer

6.—(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).

[LemonTwist]

I've found this page on the Financial Ombudsman Service website which may be useful. It says that although The Insurance Companies (Legal Expenses Insurance) Regulations 1990 gives policyholders the right to choose a lawyer, they can only exercise this right after administrative or legal proceedings have started. There's also more about it on issue 26 - legal expenses insurance

[daviet1976]

It would be easier not to claim through your legal expenses!

 

If your solicitor is confident enough to "win", expenses and costs will be claimed from the other party(ies) in any case.

 

How did your claim turn out in the end?

[vandermerwe]

Good morning mooreda

 

I've been an enthusiastic Cagger for some time now but came upon this thread courtesy of Google.

 

My case relates to medical negligence for which I had excellent help from

AVMA (avma.org.uk) a registered charity who referred us to a specialist solicitor a one hour drive away.

 

They appeared ideal with one of the partners having specialist medical knowledge substantive to the case.

 

Upon contacting them one of the first questions asked was whether we had any insurance. I responded with 'household legal expenses cover' Several weeks later I have been advised DAS will 'consider' the case and the appointment of a 'panel solicitor'.

 

The case involves a lack of duty of care by the NHS and relates to my wife (now paralysed).

 

I have no confidence in DAS.

 

With the help of two medical professionals (our son and daughter) and a legal professional (or other son) we have prepared a robust submission but appear unable to proceed beyond the insurance obstacle which we never knew existed.

 

Any help/comments greatly appreciated.

 

Vandermerwe

.

[Endymion]

To answer the initial question - Legal Expenses Insurers, as with other insurers, like to use their own panel solicitors because they usually have a financial arrangement between themselves where the solicitors will usually pay a 'referral fee' for each claim the take on and/or suggest the use of a certain insurer.

 

This is not technically against the rules per se, as long as the solicitor confirms to the client that they have a financial interest in either promoting certain insurance policies or any relationship with the insurers. However, this has been looked at closely by Lord Justice Jackson in his latest report on PI claims and may change shortly.

 

Recent case law suggests that a run of the mill accident, such as a minor whiplash injury, can easily be dealt with by a panel solicitor, irrespective of the distance of the solicitors office to the Claimants home address.

 

This has been covered in law by a case called Sarwar -v- Alam (paragraph 41 onwards)

 

Court of Appeal Sarwar v Alam

 

The problem remains, however, for Claimants who wish to instruct their own solicitors who are not on a panel of the legal expenses insurer, who have a more complicated claim.

 

Fairly recently, there have been a number of discussions with the Association of Personal Injury Solicitors (APIL) and the Ombudsman regarding this issue, especially with DAS and Cornhill. To the best of my knowledge, the Ombudsman ruled against both the insurers and suggested that The Insurance Companies (Legal Expenses Insurance) Regulations 1990 applied and that Claimants could instruct their solicitor of choice whilst still utilising their legal expense insurance.

 

I am also aware that APIL were trying to get secondary legislation to try and sort out this mess as the Ombudsman isn't really a big heavyweight and insurance companies can just ignore it to an extent.

 

As such, I would suggest that you contact APIL and they should be able to help you out with any progress they have made or any more recent case law that may support your claim.

 

However, as vandermerwe's claim is going to be quite technical, high value and probably disputed all the way by the NHS trust, you could argue that Sarwar gives rise for you to instruct your own solicitors, expecially if the solicitors you want to use are particular specialised in such claims.

 

As an aside, with such claims as vandermerwe's, it is likely that the costs for such litigation is going to exceed the coverage afforded by your legal expenses cover and as such, you will need to take out after the event insurance (ATE) to cover your fees and that of the Defendants, in any event. I would therefore see if the solicitors you have instructed are willing to proceed on a CFA WITHOUT a success fee and with ATE insurance instead of BTE insurance from DAS.

[felinefeline]

about 20 years back had an accident and was sent to a well known one in my area who was on a retainer

 

I wanted to go to a local one I had taken advice from a little one man band

 

Anyway went to the appointed one who gave the job to a newly qualified solicitor who was an exnurse which I didn't think qualified her for the job

 

anyway first thing everyone said was well easiest if you plead guilty which i wasn't willing to do

 

after kicking up and saying not satisifed was allowed to go to the one of my choice who did a brilliant job and won the case which kind of proved the point that these guys can be so smug on their retainers they couldn't really give a toss about the client

[Surfer01]

Good morning mooreda

 

Vandermerwe

.

 

And here I was thinking that you only found "Van der Merwe" in South Africa as it is a well known name there. Hope you kick them into touch.

[vandermerwe]

Ja Surfer there's lots of ous there with our lekker name, and we don't much take to skeeming Poms when they try to crook you like that DAS mob!

 

I've been arguing with them for a couple of months now over their choice of solicitor (which appears on the 'Solicitors from Hell' website - well worth Googling).

 

The legal firm has now shot themselves in the foot by putting a paralegal on the case who has stated, on the firm's letterhead, "I am a solicitor'.

 

The Solicitors Regulation Authority (a.k.a The Law Society) seem to find this a bit naughty and tell me it is a criminal offence to impersonate a solicitor and they always prosecute such incidents:D

 

Vrystaat!!!

 

Van

Edited May 16, 2010 by vandermerwe
typo

[Surfer01]

Kaapie gebore but Durbs was my home. I see that you live in the West Midlands. We live just outside Worcster in a small rural village. If you wish send me a pm.