If you or your business has the benefit of legal cover insurance, chances are you will never need to rely on it. But should a circumstance arise in which it's necessary to seek legal assistance, it’s important for you to know the full extent of your rights, especially in relation to appointing your own solicitor.
What is Before the Event Insurance?
Before the Event (BTE) Insurance is a type of legal expense cover that may arise as part of a wider insurance policy, such as your home, business, motor or bank insurance. This cover is normally an ‘add-on’ in personal policies, but is also common in a wide variety of business contexts including partnerships, companies, and other corporate organisations.
BTE cover provides you with support in the event that legal assistance becomes necessary. Legal assistance covers a wide variety of circumstances including investigations, inquiries, and legal proceedings. These circumstances can be cumbersome and financially onerous, especially in large commercial settings. Accordingly, BTE insurance is often viewed as a prudent element of the wider business insurance cover policy. BTE insurance may cover an array of eventualities but typically will cover your legal costs including solicitor fees, costs of expert witnesses, court fees and legal costs for the opponent, in the event that they win the claim.
How does BTE cover work?
Most insurers will have a preferred group of solicitors, or ‘panel’, they will refer policyholders to, in the event legal cover is required. The insurers and panel solicitors will agree to fixed fee rates within their terms of appointment which are favourable to the insurers. If legal proceedings are initiated, you will be referred to the insurer’s panel solicitors. There can be benefits to being represented by your insurer’s panel solicitors. For example, panel solicitors will have the relevant expertise for the matter in hand and will have considerable experience in dealing with your type of issue.
Can you instruct Tees to act for you if you are claiming through your insurer?
Yes. Although insurers will place a strong emphasis on you staying with their panel solicitors, there is no obligation for you to do this. In fact, under the Insurance Companies (Legal Expenses Insurance) Regulations Act 1990, policyholders have the freedom to choose their own legal representation.
Indeed, many policyholders prefer to appoint solicitors they know and trust. If you know a solicitor that has represented you before, you may feel this solicitor will serve your interests better, particularly if the legal proceedings are complex or require specialist knowledge. It’s important, therefore, that you are clear on your rights in relation to choosing your own legal representation.
The right to appoint a solicitor of your choice does not arise at the start of your policy. The policy itself is likely to include terms that reference your insurer’s panel solicitors. It will only be at the point where legal ‘inquiries or proceedings’ begin that your own solicitor can be sought. The definition of ‘proceedings’ is broad and includes initial steps that need to be taken (including consultation, investigation, mediation, as well as other early stages of legal assistance), in addition to claims that go on to require litigation. In Nobile v DAS Rechtsschutz-Versicherungs AG, the court ruled that the policyholder’s right to appoint their own solicitor started as soon as a cause of action arose.
Where circumstances such as these do arise, you can either seek confirmation from your insurer that your own solicitor may be used or alternatively, you can ask your preferred solicitor to contact the insurers directly. In either case, it is advisable to act swiftly, to ensure your solicitor can begin to take steps on your behalf.
Are there any limitations on who I choose to appoint?
If you decide to choose your own solicitor, it will be necessary for your insurer and your solicitor to agree on fees and hourly rates, as well as the scope of the work which will be covered under your policy. It's essential that you check the terms of your insurance policy to ascertain any restrictions or limitations on fixed hourly rates from the outset. If your insurer’s fixed hourly rates are lower than the rates of your solicitor, the insurer cannot simply refuse to pay towards any of the legal costs.
Insurers may try to insist that your solicitor charges the same hourly rate as their panel solicitors. This can be a considerably lower rate than your solicitor’s standard rate of work, so it’s important to note that your solicitor is not bound to agree to these terms. The Court of Appeal case of Brown-Quinn & Anor v Equity Syndicate Management Ltd & Anor  states that insurers may restrict the level of recoverable fees, but not to the extent that it renders your freedom of choice meaningless. This means the insurers cannot set their fixed rates for non-panel solicitors so low that you have no real choice of which solicitors may represent you.
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Chat to the Author, Jamie Hare
Associate, Dispute Resolution and LitigationMeet Jamie