Funding a case via legal expenses insurance (LEI)
Kang & Co Solicitors
If you or your business are facing a criminal or regulatory prosecution, then Legal Expenses Insurance (LEI) could potentially be available to cover the legal costs of your defence/representation at Court.
What is Legal Expenses Insurance (LEI)? Legal Expenses Insurance is an insurance to cover the cost of legal advice and representation brought against a policyholder.
LEI means that your insurance company will cover the cost of a Solicitor or barrister to defend your case and usually the cost of experts.
If you have Legal Expenses Insurance (LEI) in place, please speak to one of our lawyers who will be able to provide further information and assistance on how you could potentially fund your case via your insurance company.
What is Before The Event Insurance (BTE)? Before the event insurance (BTE) is the most common type of insurance cover.
It covers potential future claims and is purchased before a legal dispute occurred. Before the event insurance can be taken out on personal (car or home insurance) or commercial insurance. What Is Covered by Legal Expenses Insurance?
The types of cases covered by your Legal Expenses Insurance largely depends upon the policy you have taken out with your insurance company.
In certain circumstances you may have limited cover, only covering legal representation for a very narrow set of circumstances or alternatively you may have cover which includes representation at an Inquest Hearing, the Crown Court, the Magistrates’ Court and / or Police Station.
It is not uncommon for Legal Expenses Insurance to cover the following offences; Causing Death by Dangerous Driving Causing Death by Careless Driving Corporate Manslaughter Drink Driving Drug Driving Dangerous Driving Careless Driving Speeding Failing to Provide Driver Information (Section 172 Notice) Inquest Hearings Police Station Interviews Why Use Legal Expenses Insurance?
Legal Expenses Insurance (LEI) is a more practical funding arrangement when dealing with more serious offences such as Death by Careless / Dangerous Driving or Corporate Manslaughter.
The more serious cases understandably require a significant amount of time to prepare and represent at Court, therefore it is not uncommon for our legal costs to run into the tens of thousands of pounds.
In such circumstances, clients are unable to cover the estimated costs of representation and we will seek to establish whether there is appropriate insurance cover in place to cover our fees. What is an Indemnity Limit?
An indemnity limit is the maximum amount your insurance company will pay out for a claim, usually within one policy year.
Indemnity limits vary from insurance company and vary depending upon whether you have personal or commercial insurance.
Personal insurance indemnity limit can range from £25,000 up to £100,000 and commercial insurance indemnity limits can reach up to and beyond £3 million.
What this means for the policyholder is that an insurance company will cover (indemnify) the policyholder up to the specified amount within the insurance policy, provided the matter has prospects of success.
It is not uncommon for complex and serious cases to incur legal costs well in excess of £50,000.
What are ‘Legal Prospects?’ Some insurance policies are worded with the term ‘provided there are legal prospects’.
This means that the case in question will be covered by the insurance company under the Legal Expenses Insurance, provided there is a realistic chance of a successful outcome.
As far as some insurance companies are concerned, a case must have a minimum of 51% chance of success.
As an example, a client my wish to progress a matter to trial, however the lawyer may have advised the client the case is rather weak and unlikely to succeed at trial.
An ordinary person is unlikely to pay a lawyer to progress a matter to trial if the case is likely to be unsuccessful. Some insurance companies have a similar approach in that they are not prepared to cover a case to trial if the case is unlikely to succeed.
What is a ‘Panel Law Firm?’ This is a law firm which regularly receives instructions (new cases) from an insurance company.
The law firm has a contract with the insurance company and is the preferred provider of legal services to the policyholders of the insurance company.
If you make a claim for legal representation, your insurance company will at first instance automatically appoint the ‘panel law firm’ to represent you or your company, because they have preferential rates with the panel law firm.
The insurance company will try to insist that you remain with the panel law firm because the panel law firm has agreed reduced rates with the insurance company.
In essence it can be cheaper for the insurance company, if you remain with the ‘panel law firm’. Instructing an ‘Off-Panel Law Firm’ If you would like to instruct your own solicitor (Off-Panel Law Firm) to represent you for a pending criminal or regulatory prosecution, you are fully entitled to do so.
It will not cost you anything more to use a firm which is not on the insurance panel. If you have the necessary Legal Expenses Insurance cover in place, it is your choice whether you wish to remain with the panel law firm or alternatively whether you wish to instruct an off-panel law firm.
You will not be charged any extra money for exercising your ‘freedom of choice’ and requesting that your insurance company pays the legal fees to the off-panel law firm.
If you would prefer to use different solicitors and have your insurance company pay your legal fees, you should notify your insurance company as soon as possible.
This should usually be done at the beginning of your case, or towards the earlier stages of your case.
When an individual or company takes out legal expenses insurance, they do so in the event of an incident, they will be afforded the best representation possible and for that reason it might be appropriate to use an off-panel law firm.
Why would a policyholder instruct an ‘Off-Panel Law Firm?’
There are various reasons why a policyholder might decide to instruct an off-panel law firm, some of the most common reasons include:
- A policyholder might prefer to use a firm which is local to their home / business. Panel firms can sometimes be located a significant distance from the home / business address of the policyholder. This can make it difficult to arrange meetings in person.
- A policyholder might prefer to use a local solicitor that has knowledge of where the incident occurred and knowledge of local issues which might have a bearing on the case. ~A policyholder may have previously used a solicitor for another matter, and may wish to use the same solicitor because they have already build up rapport.
- The case in question could be of a very serious nature, such as death by dangerous / careless driving and the policyholder may wish to instruct a specialist experienced solicitor. Some panel law firms can only provide competitive prices to the insurance companies by employing inexperienced staff. ~Some policyholders may prefer to be represented by niche specialist law firms rather than the larger law firms which operates as a ‘litigation factory’.
- A friend or family member may have personally recommended a good local solicitor.
- Language barriers where a policyholder may not be fluent in English and might feel more comfortable in instructing a specialist non-panel solicitor that can communicate fluently in another language.
- A policyholder might have researched the appointed panel ‘lawyer’ and discovered that the appointed lawyer is not a true specialist in that area of law.
- A policyholder might have insisted that the case is dealt with by a qualified lawyer and not a paralegal. It is not uncommon for panel firms to appoint unqualified paralegals to deal with serious matters.
- Some policyholders are aware that they have insurance cover in place and simply want the best possible chance of success, and insist on instructing an industry leader to defend their case via legal expenses insurance.
If you are being prosecuted for a criminal or regulatory offence and have legal expenses insurance in place, you can contact us on 0345 222 9955 or send us a message on info@kangandco.co.uk and we can liaise with your insurance company on your behalf.