The article FSA underlines policyholder right to choose solicitor could leave some readers with the impression that the Eschig judgment has in some way affected the position of already-compliant legal expenses insurers, which is not the case.

Both the Financial Services Authority and the European Commission have made it clear that legal expenses insurers remain free to utilise panel law firms before the issue of proceedings. Therefore, policyholders can continue to benefit as a result, taking advantage of the lower costs and careful selection and auditing of the firms concerned.

Eschig does not affect this in any way and it certainly does not establish any right to ‘free choice’ in the vast majority of claims handled by insurers. However, one useful spin-off of Eschig is that it has highlighted the need for all insurers to ensure that wordings are compliant and that they do not unfairly restrict free choice in circumstances where it is legally required to be given.

Paul Asplin , chartered insurer, chief executive officer, DAS UK Group