Claim cover rules clarified

Clients instructed to present all relevant policies prior to referral

Claimant and defendant personal injury lawyers have welcomed a Court of Appeal finding which gives lawyers clear guidelines of the extent they should quiz clients about existing insurance arrangements.Sarwar v Alam caused concern when a judge in Chester Crown Court said that where legal expenses insurance existed, it should be used to fund the case, whether the claimant knew of it or not.In overturning the ruling, the new finding has clarified the steps solicitors need to take when advising on personal injury claims worth less than 5,000.First, solicitors should ask clients to bring copies of their major insurance policies to their first meetings -- if these policies reveal that the client is already covered by before-the-event insurance, the solicitor should refer the client to that insurer.Where an injured client was a passenger in an accident, the client should obtain a copy of the driver's insurance policies, and if the driver's consent is required, the solicitor should ask the client to obtain consent.Although solicitors should make proportionate inquiries into the existence of before-the-event insurance, they are 'not obliged to embark on a treasure hunt,' the court found.However, the court held that it is not proportionate for solicitors to inquire into details of insurance policies connected to credit cards held by clients, and that policies which seek to reserve full control of conduct of the claim might be unreasonable.Andrew Dennison, a partner with Manchester-based Rowe & Cohen, who represents the ATE (after-the-event) Group, said: 'I don't welcome the fact that freedom to choose a solicitor has been curtailed by before-the-event insurers, but I do welcome recognition by the Court of Appeal that solicitors should not embark on a treasure hunt.'Forum of Insurance Lawyers president Andrew Parker said: 'FOIL's stance has always been that claimants should use before-the-event insurance where it is reasonable to do so.'However, Mr Parker said it was disappointing that the case only applied to actions worth 5,000 or less.Association of Personal Injury Lawyers president Frances McCarthy said: 'There has been confusion in the profession for some time about how far solicitors have to go to find out about before-the-event policies, and the guidance provided by the court...

will be extremely helpful.'Jeremy Fleming