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You may have legal expenses insurance contained in your buildings insurance policy which, if you have a potential employment law or personal injury claim, would pay your legal expenses.
The insurance company may, however, insist that the insured uses its own panel of solicitors, who are often only contactable by phone due to them being based in a different part of the country than the insured. However, this may all be about to change.
On 19 July 2010, the FSA wrote to firms to clarify insureds’ freedom to choose a lawyer under the Insurance Companies (Legal Expenses Insurance) Regulations 1990 (the Regulations). This letter is signed by Ken Hogg its Insurance Sector Director. The Regulations implement Council Directive 87/344/EEC on Legal Expenses Insurance (the Directive).
This clarification of the Regulations follows the ruling in September 2009 in the European Court of Justice (ECJ) in the case of Erhard Eschig v UNIQA Sachversicherung AC (C-199/08). In this case the ECJ ruled that any provisions of a contract which detract from, or qualify in any way, the freedom of an insured to choose their own lawyer will not be compliant with the Directive.
In this case, Dr Eschig had legal expenses insurance with UNIQA. Dr Eschig wanted to pursue a claim and sought assurance from UNIQA that it would cover the legal advice which he had already received and would continue to receive from his chosen lawyer. UNIQA denied coverage, relying on provisions in the policy which allowed the insurer to select lawyers.
The ECJ held that no provisions could detract from, or qualify, the insured’s freedom to choose their own lawyer as set out in the Directive.
As a result of the ECJ decision, the FSA has asked all insurers who provide legal expenses insurance to inform them of the actions which have been taken to ensure that the terms of any legal expense insurance policies comply with the Regulations. Firms are asked to inform the FSA of their actions by 30 September 2010.
Furthermore, following the ECJ judgment, the FSA has informed firms that they can no longer rely upon an undertaking given by DAS Legal Expenses Insurance in July 2006. This undertaking has now been removed from the FSA website.
For further information: Letter from Ken Hogg on legal expenses insurance
Conclusion
The above suggests that if you do have a potential employment law or personal injuries claim you should check your insurance policies to see whether you may be covered for your legal costs.
For further information on Legal Expenses Insurance, contact solicitor Susan Mayall using the details below.
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