Funding a Case via Legal Expenses Insurance (LEI)
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.
We recommend that you check your home, vehicle or business insurance policy documents yourself to check whether you have this type of cover in place on your policy, as opposed to asking 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 and the level of cover you have been provided with. 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.
If you are unsure whether you have appropriate cover for your case, please contact us immediately and provide us with the relevant extract from your insurance policy and one of our lawyers will be able to provide assistance on whether you have relevant cover in place.
We have represented clients via Legal Expenses Insurance for the following offences;
- Causing Death by Dangerous Driving
- Causing Death by Careless Driving
- Corporate Manslaughter
- Dangerous Driving
- Inquest Hearings
- HSE Prosecutions
- Regulatory Prosecutions
- Why Use Legal Expenses Insurance?
Legal Expenses Insurance (LEI) is potentially a useful funding arrangement when dealing with more serious offences such as Death by Careless / Dangerous Driving or Corporate Manslaughter. These more serious cases understandably require a significant amount of time preparation and represent
at Court, given the serious nature of these offences and therefore it is not uncommon for our legal costs to run into the tens of thousands of pounds due to the substantial work involve in these types of serious prosecutions.
Some of our clients are in a financial situation where they have the funds to pay our fees privately however some clients are unable to cover the estimated costs of representation and in those circumstances, we will seek to establish whether there is appropriate insurance cover in place to cover our fees.
As our lawyers have experience in dealing with major insurance companies and have previously worked as part of several ‘Panel Law Firms’ we have the appropriate knowledge to liaise with insurance companies and are able to negotiate with them to agree payment terms and arrange for cover to me transferred to Kang & Co Solicitors so that our clients can benefit from the best possible representation without paying directly.
Whilst we aim to be flexible with our fees, our fees are in line with quality legal advice and representation and on certain occasions an insurance provider may offer legal fees which are significantly below our normal rates, in those circumstances we are unable to provide a service inline with our standards and we are unable to agree to the fees of the insurance company.
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 differ from insurance company and are based 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 that 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. It will be cheaper for the insurance company, if you remain with the ‘panel law firm’ and for that reason you will notice your insurance company is placing a heavy emphasis for you to remain with the panel solicitors.
Law firms that are on the insurance panel have tendered for the work and usually the deciding factor for which firm is appointed to the panel is based on legal fees. In simple terms, the law frim which offers the cheapest rate to represent their insured (you) is likely to be appointed to the insurance panel.
Kang & Co Solicitors is not part of any insurance panel because our lawyers are specialists and our focus is on providing quality legal services, rather than cheap legal services for an insurance company.
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, provided the insurance company agrees to the fees of the ‘Off-Panel Law Firm’.
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.
Shortfalls in Fees
In certain circumstances an insurance company may agree to pay a proportion of the fees of the ‘off panel solicitors’ in such circumstances the insured (client) may need to pay the shortfall. As an example, our hourly rate is £250+VAT the insurance company may agree to pay £200+VAT the shortfall of £50+VAT per hour will then need to be paid by the client.
Some insurance companies will orchestrate a scenario deliberately where they offer very low fees to non-panel solicitors and will seek to limit how much they are prepared to pay, knowing that the non-panel solicitor will not agree to those terms, which ultimately results in the client having no choice but to use the panel solicitors. This is something an insured person should be aware of.
Our lawyers need to be able to properly dedicate time and attention towards preparing high risk cases such as those involving a fatality, as the consequences are very serious in the event our client is convicted. If an insurance company is placing restrictions on the time, we can dedicate to a file, unfortunately we are unbale to agree to such terms with an insurance company as this would prevent us from acting in our clients best interest.
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 low paid, unqualified and inexperienced paralegals.
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.
Policyholders that are familiar with the legal and insurance industry will be aware that a panel firm will be more focused on keeping the insurance company ‘happy’ because the insurance company is their real client from which they receive regular cases.
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 fill out the contact and we can liaise with your insurance company on your behalf.
Useful Related Links: Financial Ombudsman
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