Legal Expenses Insurance – How it could save you thousands of pounds in legal fees when you bring a Personal Injury Claim
Many people have Legal Expenses Cover as part of their Motor and Home Insurance policies and don’t even know that they have it, let alone what to use it for. If you are injured in an accident, the policy (often referred to as “Before-the-Event” or BTE cover by lawyers) may save you thousands of pounds if your claim succeeds.
My last current motor policy included a £27 add-on premium for BTE cover and our family home insurance premium included £17.95 for Family Legal Expenses Insurance. I always ensure I have such cover in place for reasons that will become apparent.
If you already have this cover in place at the time of your accident, you should make sure you notify your insurer straight away to ensure the cover is effective, as it will almost certainly mean that you will have no legal fees to pay if your claim succeeds and you recover compensation.
Our clients who don’t have BTE cover normally enter into an industry standard Conditional Fee Agreement (CFA) with us and also take out a policy of After-the-Event Insurance (ATE cover) to ensure that they pay nothing if their claims don’t succeed. However, if they win their claims, they will have to pay us a success fee of up to 25% of their compensation and pay the ATE premium which can range from £90 to thousands of pounds out of their damages if they win.
By way of example, without BTE cover, if you win £20,000 in compensation, you may have to pay your solicitor a success fee of up to £5k and an ATE premium of around £500 if you win, but if you do have BTE cover you would keep the whole £20,000. A good saving for a premium of around £20!
BTE insurance is usually a stand-alone policy issued by a different insurer to the one that insures your house or car. Well-known Legal Expenses Providers include DAS, ARC, Legal Insurance Management, ARAG and Financial and Legal Insurance Company. Some insurers such as Direct Line provide their own cover. Some BTE policies are contained in premium bank accounts, travel insurance, credit cards and other policies – so look carefully if you have an accident.
We always ask clients to check if they have BTE cover when we see them and if they do, we ask them to notify the insurer quickly as some won’t provide cover if you don’t notify them of the accident within 3 months of it occurring. We then approach the insurer to see if they will appoint us as non-panel solicitors under the terms of their cover. Whilst many will, others will only instruct us if Court Proceedings are required, in which case they have to appoint the client’s chosen solicitors. In those cases the clients have a choice of appointing the solicitors on the BTE Insurers’ panel, which is often a firm in a distant city from where they live and often owned by the BTE Insurer or to instruct us on terms (provided we are prepared to offer them depending on the strength of their case) whereby we will not charge them if the claim succeeds. Most elect to stay with us, preferring to instruct solicitors they know and trust and who they can physically meet with at one of our four offices.
My advice to you is that if your Personal Injury Solicitor doesn’t mention Legal Expenses Insurance to you at your first meeting with them, then search to see if you have it and either return to them or consider instructing another solicitor.
We will always be happy to give you advice on any type of personal injury case, please do not hesitate to contact us on 0114 218 4000 or email firstname.lastname@example.org.