A greater uptake of legal expenses insurance (LEI) by individuals could increase access to justice for the ‘forgotten middle’ – people who cannot afford private legal services, but whose earnings or assets disqualify them from legal aid. That is the verdict of a report by the International Bar Association published at its conference today.
For the study the IBA's Legal Policy and Research Unit took case studies from nine jurisdictions including England and Wales. This is described as a 'limited LEI market' compared with the 'widespread' markets of Germany, Japan and Sweden.
A barrier in types of jurisdictions is the widespread exclusion of family law and criminal law, the IBA says. Another is simply that many people are unaware that they have the cover.
Uptake of LEI in England and Wales is to be significantly lower than in mainland Europe, with policies generating €592m in premiums in 2012. However the researchers conceded that estimates of uptake of policies vary widely, from the 40-60% of households suggested by Lord Justice Jackson in 2009 to the 8% estimated by the Legal Services Consumer Panel in 2017. From the insurers' point of view another barrier is costs uncertainty. The report quotes insurer DAS as saying that extending the fixed recoverable costs regime beyond the current basket of cases would not resolve this issue 'because insurers do not set the value of fixed recoverable costs – the legal profession does'.
To encourage take-up of before-the-event LEI, the IBA report proposes:
- Efforts to increase individuals’ awareness of LEI as a purchasable product;
- Improving information for existing policyholders on the extent of coverage;
- Better data gathering to measure the spread and impact of LEI;
- Expanding LEI coverage to include family law disputes;
- Dispensing with panel lawyer schemes to remove the perception of conflicting interests; and
- That bar associations and law societies establish and maintain panels of legal practitioners who meet predetermined qualifications and are prepared to act based on a set scale of fees.
It suggests that 'a push from the legal profession to increase access to justice in an affordable manner could potentially lead to greater trust in the legal profession generally'.