What is Legal Expenses Insurance?
Legal Expenses Insurance (LEI), either purchased separately or included as an element within home insurance policies, should meet the legal costs of policyholders when they encounter difficulties which require the advice or representation of a lawyer.
Restriction of the Right to Choose Legal Representation
Often policyholders find that when they decide to make a claim on their policy they are discouraged from choosing their own lawyer. Insurers prefer policyholders to use a solicitor who has been appointed from a panel of solicitors and with whom they may have previously agreed reduced fees. In effect, some financially motivated insurance companies are denying those whom they insure their right to choose legal representation. The policyholder’s best interest might, however, be best served by a lawyer of his or her own choosing. This is particularly the case where a policyholder is in need of specialist advice. For example, a person with an employment dispute might be better represented by a specialist employment lawyer than by a generalist litigation lawyer.
The Law Guarantees the Individuals Right to Choose Legal Representation
In the case of Maltez v Lewis 1999 it was held that
”It has always been a fundamental right of every citizen to be represented by a lawyer of his or her own choice”.
Regulation 6 of The Insurance Companies (Legal Insurance) Regulations 1990 prohibits insurance companies from restricting a policyholder’s right to choose legal representation.
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).
(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 Solicitors Regulation Authority Code of Conduct 2011
It’s possible that a solicitor acting for a client on the instructions of a third parties (the insurer) in a way which could be considered a restriction on an individuals right to choose legal representation could amount to a breach of the Code of Conduct.
Mandatory Principle 3 ”A solicitor may not act where his or her independence might be compromised”.
Mandatory Principle 4 ”A solicitor must act in the best interests of each client.”
If you feel that you would like further advice on a legal matter or are being discouraged by your insurance provider from choosing your own lawyer you may wish to contact us on [phonenumber] for free initial advice.