Create legal documents with an ARAG legal expenses policy

Most ARAG legal expenses insurance (LEI) products give customers access to an online document service where they can create personalised documents such as wills, tenancy agreements, job offer letters and many more.

The range of documents available is tailored to the policy that you sell, for instance with ARAG’s Landlords’ Legal Solutions your clients will have access to circa 160 legal documents, including Section 8 and 21 notices, as well as a comprehensive law guide.

The process of producing a document is simple. Using the Rapidocs system the user follows a series of step-by-step questions and their responses populate the required elements of the template to produce a tailored and personalised document to download.

The best thing is that many of the documents are free with ARAG policies, others will attract a reasonable fee but customers can always try before they buy.

The documents, letters and law guide are all written by solicitors and barristers and to ensure that they are current they are frequently reviewed and updated.

The latest updates, which will be rolled out in the coming months, include:

• Auto question scrolling: On pages with long lists of questions, users will no longer need to use a scroll bar; instead the next question appears in the middle of the page to ensure that they don’t miss anything
• Intelligent progress bar: Enabling easier navigation and includes a progress bar so users can see how far way they are from completing the form
• Online editing: In some cases customers will be able to directly edit the documents online if necessary and return the document for a final review 

To find out more about ARAG legal expenses insurance products and legal services online, either visit www.arag.co.uk or email enquiries@arag.com 

A cut too far?

Why do so many businesses operate without legal expenses insurance?
We still hear statistics that the vast majority of SMEs operate without the benefit of legal expenses insurance and my brokers tell me some of their clients are opting out of the legal cover when their insurance package is renewed.

In hard times such as these, all costs are scrutinised more carefully, but is cutting the legal expenses from a policy a cut too far? Are they throwing the baby out with the bath water?

To me this has two aspects; is the cover understood and is it properly sold?

Important covers provided by an LEI policy
Is a legal expense claim likely? I recently read that an employment dispute is 12 times more likely than a fire. The usual employment settlement is £3,000 but they can easily run to tens of thousands.

Add to that other covers like tax investigation, regulatory cover (including health and safety defence) and contract and debt. ARAG LEI policies have a limit of indemnity of £100k, so for the low premium involved surely it is well worth having.

Adding even more value
Don’t forget that the policy also includes legal and tax helplines which some think are worth the money alone.

And what about the online document drafting service? This is definitely a valuable benefit with circa 100 documents available for download and tailored online to suit the policyholder’s needs. For example, property owners can access a buy to let guide, draft a tenancy agreement and download an inventory checklist.

Selling LEI
Most SME business is transacted via a broker, so clearly they have a vital role to play. It may be tempting to let the client delete the legal cover, take the cheque and run, but is that in the client’s best interests?

I have sat in brokers’ offices and seen their renewal checklist where right at the end there is a one-liner “Commercial legal expenses, not required”.

At renewal discussions, is legal cover relegated to this tick box exercise at the end of the meeting or is it better to take time to sell the benefits and explain the cover?

Hopefully the answer is the latter option and ARAG can lend a hand with training and advice on sales materials, just ask.

I have run my own business and I would state categorically that every SME should have legal expenses insurance.

For and most importantly against the LASPO Bill

Various government proposals and bills seem to be having a tough time in the House of Lords, not least the rocky ride being shown to the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) which proposes cuts to legal aid and sweeping changes to civil litigation.

Currently in committee stage there have already been a few concessions made but with many peers opposed to the Bill the next report stage should be very interesting.

The last couple of weeks have seen a number of articles in the news with varying opinions on the LASPO Bill.

In the Telegraph over the weekend, the Justice Minister Ken Clarke was defending the Bill by highlighting the costs that the NHS pays in success fees to lawyers in clinical negligence cases. According to their figures:

• the number of claims rose from 5,426 in 2006/07 to 8,655 in 2010/11
• legal costs of claimants suing the NHS rose over the same period from £83 million to £195 million
• the cost of defending the actions rose from £49 million to £62 million.

Blaming the compensation culture, Clarke explained that "Taxpayers expect that the system should compensate claimants properly and reward their lawyers appropriately, not liberally.”

On the other side of the fence, the Telegraph article mentions phone-hacking victims like the Dowler family who have lobbied the government with a letter saying that “the changes will make it difficult for any but wealthy people to launch legal actions.”

Similarly, a range of charities, organisations and campaign groups are fighting back against the Bill, including AJAG and the CJA both of which ARAG is a member of.

The latest press release from the Law Society explains: “Peers in the House of Lords will discuss altering the legislation in a bid to eradicate "compensation culture" but the move would instead penalise victims of accidents, fraud, negligence and wrong-doing as well as businesses and even the Government.”

In an article in the Guardian, charities Oxfam and Amnesty International have joined the campaign on behalf of those suffering human rights abuses, warning that, “Victims of oil spills, pollution or land grabs in developing countries will no longer be able to pursue claims in British courts against multinational corporations under [these] legal reforms.”

Another hole identified in the Bill is that of the money saving aspect. Concerns have been raised by many that the calculations haven’t been done and that the cuts in legal aid and amends in civil litigation will cost more than they save. A report by King’s College London identifies that “these changes will incur new costs for the taxpayer by simply shifting the burden onto other parts of the public purse.”

In another academic report, Dr McIvor, Senior Lecturer at Birmingham Law School, accused the reforms of being “excessive and over-zealous”. She advised that “the evidence does not necessarily demonstrate that the primary source of the current high level of costs is the recoverability of success fees and after-the-event insurance premiums.”

What is also surprising about the Bill is the lack of joined up thinking in the government. With Clarke, together with his counterpart, Eric Pickles, continually following the party line about saving money (Guardian article: Eric Pickles: council tax rise a 'kick in the teeth' for cash-strapped residents), if the Bill is passed and legislation implemented then Council Tax will increase. The reason for this is quite simple. Unlike the present system where Local Authorities can recover their legal costs when they successfully defend a claim, under the new proposed system, they will not unless the case is deemed to be fraudulent or frivolous, which is extremely difficult to prove. This Bill is leaving Local Authorities will their hands tied behind their back. One the one hand they will want to defend cases, but on the other they know that if they do they won’t recover costs. Claims won’t reduce, so compensation payments by local authorities will increase, meaning only one thing, a cut in services or an increase in the Council Tax.

With the report stage to come and many amendments expected to be tabled by the Lords to all sections of the Bill, the fight is not yet over for those battling for and most importantly against the LASPO Bill.

Employment tribunals – an update

With cost-cutting high on the Government agenda another set of measures to reduce taxpayer costs have been tabled in the latest consultation on employment tribunals - Charging Fees in Employment Tribunals and the Employment Appeal Tribunal.

Currently costing around £84 million a year the consultation aims to lower this amount by proposing that those who use the “system make a financial contribution”. Two options are laid out in the consultation:

• Option 1: an initial fee of between £150-£250 for a claimant to begin a claim, with an additional fee of between £250-£1250 if the claim goes to a hearing, with no limit to the maximum award; or
• Option 2: a single fee of between £200-£600 – but this would limit the maximum award to £30,000 – with the option of an additional fee of £1,750 for those who seek awards above this amount

There are a number of benefits listed in the press release issued by the Ministry of Justice on 14 December, including:

• Access to justice for those on low incomes or limited means will be protected by fee waivers
• Discourage unmeritorious claims
• Encourage early settlement of claims
• Small businesses will be encouraged to recruit new staff without the fear of unnecessary actions
• Incentivise complainants to choose conciliation or mediation
• Reduce taxpayers costs

On the other hand, an article in the Law Society Gazette has comments from Victoria Phillips, head of employment rights at national firm Thompsons, who is concerned that “fees at any level will make it more difficult to pursue a claim against an employer.”

With the number of employment tribunals increasing every year and money spent by both parties unnecessarily on applications that often do not reach a full hearing, how well will these proposals tackle the problems going forward and who else will be affected by the changes? Your comments are of course very welcome.

Matrimonial bliss or matrimonial miss!

The latest statistics from the Office for National Statistics show that the number of divorces in England and Wales is unfortunately on the rise, with an increase of 4.9% from 2009 to 2010.

In real terms the figures have risen from 113,949 divorces in 2009 to 119,589 in 2010, this is equivalent to 11.1 divorcing people per thousand married population.

Alongside this dissolutions of civil partnerships are also increasing with provisional total of 509 in the UK in 2010, an increase of 44% from 2009.

The average age for couples to divorce is between 40 to 44 years old. The 2010 trend also shows that women are more likely to divorce at younger ages and men when they get older. With regards to the average duration of marriages in 2010 the statistics show that it remained steady at 11.4 years.

While no-one planning to get married or enter into a civil partnership wishes to think that things may not work out, nuptial agreements are becoming a popular way for individuals to protect their property and assets if the relationship does break down.

ARAG is now selling two new divorce insurance products – Pre-nuptial Legal Solutions and Divorce Legal Solutions – that are sold alongside nuptial agreements. These products provide a legal expenses insurance policy that starts from the date of a marriage or civil partnership and protects the policyholder against legal costs associated with matrimonial breakdown.

Both policies cover costs arising from a legal challenge to the nuptial agreement whilst Divorce Legal Solutions extends cover to include the cost of divorce proceedings.

Find out more about Pre-nuptial Legal Solutions and Divorce Legal Solutions from the ARAG website.

Quango signs its own death warrant with misleading report on legal expenses

Read one of the articles from our latest newsletter - The RAG. If you'd like to read more click here.

Consumer Focus has published a mostly negative Report, called In Case of Emergency, on the legal expenses industry and in doing so has made the strongest case yet for its own abolition. The soon-to-be abolished quango’s findings are riddled with errors, misleading conclusions and ill-informed comment. Indeed, some of the errors are so serious they undermine the Report’s credibility.

Following discussion with ARAG’s MD, Tony Buss, Consumer Focus have put their hands up and admitted mistakes, and have also made some factual corrections. Whether this is sufficient to quell its headline-grabbing scaremongering on the Before-the-Event (BTE) market remains to be seen.

The watchdog investigated the industry following LJ Jackson’s assertion that the BTE market can and should take up the cases his proposed reforms would remove from After-the-Event (ATE) funding and the government’s £350m legal aid cuts. It rightly concluded that the current legal insurance market cannot ‘fully’ fill the gap, but mostly for the wrong reasons. Somewhat bizarrely, it then added that over half the people who had made successful claims thought legal expenses insurance (LEI) was the only way to sort out their legal problem.

The Report highlights several negative opinions and

• says that product design should be harmonised between providers or the Key Facts provided to make them easier to understand and ‘shop around’. This ignores the reality of the add-on sales channel (referred to elsewhere in the Report) and that full documentation is automatically provided in accordance with FSA rules
• proposes a consumer information and knowledge campaign, headlining ‘Millions confused by LEI’, when corrected figures reveal a relatively high product knowledge (64%) with 48% and 16% respectively being either ‘satisfied’ or ‘very satisfied’
• proposes independent appeals when policyholders can already go to the FOS
• excludes favourable findings on BTE; for example, just 4% of respondents asserted they had received no policy information while 70% found the information ‘clear’ or ‘very clear’.

Looking at whether claimants should be able to choose their own solicitor, the quango proposed that they should despite acknowledging that premiums would rise and even more people on modest incomes would be denied access to justice. It makes some woolly assertions on impartiality and incorrectly mentions the Eschig case in support.

“We always welcome properly researched independent surveys but in our opinion this Report’s authors came from a state of ignorance and have not moved on”, comments Paul Hurley, Business Development and Marketing Director, ARAG UK. “We feel they are guilty of spreading disinformation that promulgates the ‘widespread confusion’ it alleges for LEI. Some of their findings and perceptions may be useful indications on the way policy information could be improved but overall the Report does far more harm than good and is ‘not fit for the purpose’: its own words in characterising LEI products”.

Hurley’s comments have been echoed in the insurance world but not on consumer websites or in social media, which failed to observe the discrepancies between conclusions and evidence.

Lesley Attu of ARAG UK has been elected as Chair of the working party which has been set up following an industry wide meeting of LEI providers, (facilitated by but independent of the ABI). The working party has been established to respond to recommendations of the Report. It will provide feedback on these recommendations and the degree of benefit they are likely to bring to consumers; with a view to engaging with the Ministry of Justice (MoJ) to support wider promotion of BTE.

Click here to read more artcles from our newsletter - The RAG

Fighting for access to justice

As a member of the Consumer Justice Alliance (CJA) we at ARAG were very interested in seeing the video that they have just produced and released on YouTube. Called ‘Fighting for access to justice’ it looks at how the CJA are campaigning against the Government’s proposals for changes to civil litigation as presented in the LASPO Bill.

More importantly victims of accidents and medical negligence are invited to discuss their experiences and how their lives have been transformed not only by their illnesses or injuries but how they managed to turn it around thanks to the compensation and support they received as a result of being able to claim through the current system.

As one victim of medical negligence describes in the film, “changing the funding regime will make it harder for people to have their claim properly investigated and also for the hospital to change the practices that allowed it to happen and deny them full compensation for the loss they have suffered.”

The risk of having to pay for legal fees should the decision go against you would have been too much of a barrier for the people speaking in the film and they all explain that this is not a risk that they could have taken.

Nigel Meurs-Raby, Chairman of the CJA concludes the film by saying, “These are real people who are real victims with injuries that are not their fault. We need to do everything that we can to make sure that this dreadful new legislation doesn’t end up on the statute book.”

Watch the video in full here: http://www.youtube.com/watch?v=gtvMdYOu3Ks&feature=related