Call to widen insurance

LEGAL EXPENSES: clients should be given option of paying for solicitor they want, says report

Clients who use legal expenses insurance (LEI) to fund their claims should be given the option of paying more to appoint a solicitor of their choice rather than being forced to use insurers' panel firms, research by Westminster University law school has suggested.

The report - which also called for a government review aimed at making LEI a stronger alternative to conditional fee agreements (CFAs) - said that although most clients did not mind using panel firms, many would prefer more personal contact with a local non-panel solicitor.

The report conceded that this could increase insurers' uncertainty over costs, but said one way around this was to peg premiums according to choice and location.

An alternative was to allow policyholders to pay the difference between the fixed fee the insurer would pay the panel firm and the actual fee charged by a non-panel firm.

It said insurers should ensure a greater geographical spread of panel firms and show more latitude in the use of non-panel firms in specific types of cases.

The report also raised concerns that LEI insurers were acting more like referral agencies than funders in successful personal injury cases because they were not paying costs, which could cause firms to become risk averse.

The Association of Personal Injury Lawyers (APIL) has warned that this commercial pressure has real implications for access to justice.

Report author Pamela Abrams told the Gazette that LEI funding was not currently being used to its full potential, partly because clients associated it with CFAs, which they mistrusted.

'CFAs and LEI can co-exist, but the public needs to be made aware that LEI covers a wider range of disputes than just personal injury claims - the area where CFAs are so heavily marketed - and so is a real alternative,' she said.

An APIL spokeswoman said it supported LEI in principle, and would be looking at how a sliding scale of premiums could facilitate choice.

Paula Rohan