What is Legal Expenses Insurance and do I need it?
Clients often ask us about Legal Expenses Insurance, sometimes known as LEI.
LEI has been around for many years and is especially common on motoring policies. Confusion frequently arises from the fact there are two types of Legal Expenses Insurance.
Before the Event LEI (BTE)
This is the conventional type of LEI. Policies that are taken out prior to circumstances arising that might lead to a claim. BTE policies are frequently sold as “add ons” to motoring policies, with the insured being charged extra for the legal expenses cover.
After the Event LEI (ATE)
This type of policy is taken out after the event giving rise to a claim has occurred, eg after the date of a motoring accident. ATE insurance is generally arranged by the solicitor dealing with the accident claim.
Solicitors are under an obligation to consider whether their client already has the benefit of BTE legal expenses insurance. We have to take reasonable steps to ascertain whether a BTE policy exists which normally involves us in checking the client’s insurance documentation ourselves. This is because BTE LEI is often sold by insurance companies without the insured themselves being aware of it!
For those that do not already have BTE LEI, we can arrange for a policy of ATE insurance to be taken out. This can be done at no cost to the client and does not affect the Slee Blackwell Solicitors guarantee to pay to our clients 100% of the compensation awarded to them.
The insurance industry has attracted a lot of criticism in relation to BTE insurance, with some commentators claiming that BTE insurance for motoring accidents is an expensive and unnecessary luxury.
The insurers make a double profit. Not only do they charge people to take out BTE insurance but they then charge their “panel” solicitors hundreds of pounds in referral fees.
Unlike most firms dealing with accident claims, Slee Blackwell doesn’t pay referral fees to insurance companies. We prefer to remain totally independent and impartial We rely on our good name in Devon, the South West and beyond for our work. People choose to come to Slee Blackwell because we are experienced personal injury lawyers with a proven tack record, not because they are told to by an insurance company whose only motivation is the referral fee they receive.
Some insurance companies provide family legal protection policies that offer wider and more worthwhile cover. But critics say that BTE insurance for motoring accidents is completely unnecessary. After all, why should a consumer be expected to pay for insurance that covers them in a situation where a reputable and independent local firm of solicitors like ourselves would be prepared to act on a ‘no win, no fee basis’?
However, this is not to say that legal expenses insurance is unnecessary: far from it. Even in the most straightforward cases it is always advisable to have insurance in place. Our legal system in England and Wales operates on a “loser pays” basis. This means that if you win your claim you can expect to recover your legal fees from your opponent. However, the other side of that coin is that if you lose you become responsible for your opponent’s costs. For this reason, we recommend that our clients have legal expenses insurance in place when pursuing a personal injury claim. So, for those that have not already paid up front for a BTE policy we can arrange for ATE cover to be taken out at no cost to the client.
Whenever we deal with an accident claim on a “no win, no fee” basis we always expect to win. We have been dealing with personal injury claims on a ‘no win – no fee’ basis here in Devon from the very beginning and we like to think that we have become pretty good over the years at identifying those claims which are likely to succeed. It is because we have such a strong team of specialist personal injury lawyers in North Devon and Exeter specialising in this field that we are able to ‘put our money where our mouth is’ by offering to deal with claims on a genuine ‘no win – no fee’ with no hidden deductions or charges that are often found elsewhere.
Nevertheless, we do think it is important that our clients do not take any unnecessary risks and for this reason we always like to ensure that LEI is in place: whether it is a previously bought and paid for BTE policy or an ATE policy that we arrange ourselves.
So, the next time your motor insurer asks whether you wish to add on a BTE LEI policy which only covers road accidents you might like to keep your money in your pocket on the basis that your local Slee Blackwell office will be willing to deal with any personal injury claim at no cost to you.