A few years ago, insurance cover for the cost of bringing or fighting proceedings was being talked about as a credible future alternative to legal aid.

There were even tentative suggestions in some quarters that the whole of the legal aid scheme might be transformed into one giant legal expenses policy, underwritten by private companies.Since then, the market seems to have gone rather quiet.

In some ways, the last few years have been ripe for a boom in legal expenses insurance (LEI): an increasingly litigious general public becoming more determined to exercise its rights, confronted with declining legal aid eligibility and legal costs spiralling out of its reach.

What better way of ensuring access to justice than by insurance? Yet the boom did not materialise - if anything, the reverse happened.Tony Brown, marketing manager at legal expenses insurer Legal Protection Group, agrees that some of the ingredients for an upsurge were in place, but adds: 'It was also a time of one of the worst recessions on record.' When money is tight, LEI becomes a luxury that most people decide they cannot afford, he says.In any event, he rejects the suggestion that the market has gone into decline.

LPG is seeing an increase in interest in legal expenses insurance from commercial customers, he says.

And DAS Legal Expenses Insurance says it has just moved into profit 'after taking losses over a number of years', according to claims and advisory manager Charles Wright.Although both DAS and LPG are bullish about the future, they both admit that there has been a rather steeper learning curve for all players in the market than they might have liked.Mr Wright says: 'If you go back to the 1970s when all this kicked off in this country, everyone envisaged a golden future.

The answer is that the golden future was not there.

It has taken a lot of hard work and effort and refining our approach.'LPG's Mr Brown says: 'It would not be right to say the market has gone flat, but the withdrawal of companies from the market has not been helpful.'Both stress that legal expenses insurance is still a relatively new class of business - DAS claims to have been the first into the UK, 20 years ago - and teething troubles are inevitable.Mr Brown says: 'Most types of insurance business have been around for hundreds of years.

If you looked back to the beginning of, say, motor insurance, I am sure you would find a similar situation.'One of the biggest problems facing legal expenses insurers is adverse selection.

People who take out LEI are those who are determined to use it - which means the co st of claims is too high.

Some companies have responded to this difficulty by pulling out of stand-alone products altogether - offering LEI only as an add-on, say, to a motor or home insurance policy.LPG, however, is one of the few still offering stand-alones - although Mr Brown admits that these policies are no longer actively promoted in the same way.

The emphasis and nature of the policies has changed.At one time, LPG sold its insurance on the basis that it was wide-ranging and would cover you for almost any legal eventuality.

Now, the policies are more narrowly targeted, depending on the individual's needs, say in areas like personal injury or employment.In this way, the company hopes it has dealt with the problem of adverse selection.

People are unlikely to take out legal expenses insurance with a view to going out and crashing their car or getting themselves unfairly dismissed from work.Some areas of cover have been dropped altogether, for example divorce - because too many people seemed to be taking out the cover specifically with this in mind - and slander and libel.

'This is not an area that most people are worried about,' says Mr Brown.Reducing the scope of cover has also tackled two of the major criticisms usually levelled at LEI: expense and exclusions.

According to Mr Brown, it has meant that the cost of the cover can come down to more affordable levels and, ironically, by being narrower, you need fewer exclusions.

If the policy extends only to, say, personal injury litigation, you do not need to have endless complicated exclusions about when, for instance, divorce proceedings will or will not be covered.

'If you are not covering it, you do not need to exclude it,' says Mr Brown.LPG has also tightened up its underwriting criteria for stand-alone cover.

'We now look at the proposals individually when they come in and underwrite them individually,' he says.In DAS's case, it has dropped stand-alones for individuals completely.

It will, however, offer wide-ranging cover for groups - say trade unions or clubs which have a sufficiently large membership to minimise the risk of adverse selection.There seems to be growing emphasis on commercial cover, fuelled by changes in legislation and government policy.

Mr Brown says employers are particularly interested in protecting themselves following the scrapping of the upper limit in some industrial tribunal cases.

'We would cover them for the cost of any compensation award made in, say, a case of unfair dismissal.'Mr Wright says: 'In the commercial world, we have had the impetus of increased privatisation.

National Health Service trusts and even the academic world have all undergone radical changes which mean a lot of these organisations are now prepared to buy legal expenses insurance.

Whereas it used to be seen as a luxury at one time, it is now seen as an essential part of the risk management programme.'