One of the most common insurance policies taken out by home owners is buildings and contents insurance and in addition to covering obvious losses, such as flood damage, policies frequently include a less well known, but very useful benefit – legal expenses insurance cover.
One of the major concerns that most people have when seeking advice in relation to a legal dispute, such as a personal injury claim, is the question of legal costs. Many clients are more concerned about avoiding a legal bill than they are about recovering compensation.
Solicitors’ fees are generally calculated on the basis of an hourly rate and although the precise work to be carried out will vary from case to case even the smallest dispute can result in a considerable amount of work and hence not inconsiderable legal costs. Indeed in smaller cases the legal costs can exceed the value of the claim simply because of the work necessary to pursue the matter to a conclusion.
In England and Wales the general rule in a legal dispute is that the loser pays all of the legal costs reasonably incurred in the case and that means not only their own legal costs but also the legal costs incurred by all the other parties to the dispute.
If the claim is successful the client is able to recover, from their opponent, the reasonable legal costs incurred by their solicitors, in addition to any compensation which may be due. However difficulties arise where the claim is unsuccessful and the client is left facing substantial legal bills
Home and motor policies frequently include legal expenses cover as an additional benefit and if such cover is available the insurer will, subject to the terms of the policy, indemnify the client in respect of any liability they would otherwise incur, in respect of their own solicitors’ legal costs and the opponents’ legal costs, in the event of the claim being unsuccessful. As a result a client whose claim is unsuccessful escapes from having to pay anything in respect of legal costs.
One word of warning – if legal expenses cover is available the insurers will frequently refer the client to one of their own solicitors. Although insurers are able to insist, at any time prior to the issue of court proceedings, that if the client wishes to use the legal expenses cover they must use the insurers’ choice of solicitor they cannot prevent the client from instructing their own solicitors to deal with the claim outside of the legal expenses policy. If you are unfortunate enough to be involved in an accident and your insurers refer you to their own solicitors please let us know – we may well still be able to help.
