A judge has ruled that a business that acted on behalf of a landlord to evict a tenant “crossed the line” in carrying out regulated legal services that only qualified solicitors are permitted to provide. Here’s a link to the full story which appeared on Litigation Future’s website: 

https://www.legalfutures.co.uk/latest-news/unregulated-eviction-service-crossed-line-into-litigation

It’s easy to see how landlords are tempted to use services such as “Remove a tenant” as an alternative to representing themselves, or paying for solicitor representation in legal proceedings. Not only did “Remove a tenant” break the law, the legal notice that they issued to repossess the property was faulty. The landlord had to go back to court to proceed with their claim using alternative grounds to repossess their property.

Legal expenses insurance for landlords provides a helpline to talk through correctly issuing a landlord’s notice to repossess and ARAG’s Landlord Legal Solutions policy allows your landlord clients to download the notices and a covering letter for free from our legal services website. If a tenant fails to leave on expiry of the notice, the policy pays legal costs for a regulated law firm to act for the insured.

According from their website “Remove a tenant” charge from £50 to issue a repossession notice, and the cost of preparing for a court hearing and representation is charged from £250 (+VAT) http://www.removeatenant.co.uk/legal-services/ - this is much more than the cost of Landlord’s Legal Solutions over the average term of a tenancy. Surely peace of mind and confidence that claims will be dealt with properly is surely an attractive prospect for customers who may be reluctant to opt in to legal expenses? I’ll leave you to guess the moral of this story...

D-ARAG-ON RACERS!

On Sunday the 10th of June our team of Viking warriors, the D-ARAG-ON RACERS, took part in the Bristol Dragon Boat Festival. This festival is an annual event organised by the Rotary Club of Bristol in order to raise money for Caring in Bristol, a charity to benefit the homeless.

After weeks of training an elite team of 20 D-ARAG-ONS took to the high seas (well, the Bristol harbour) and raced against 29 other teams to see who could cover 200m in as short a time as possible. We had three attempts at this and got better with every run. Our final round we were over 5 seconds faster than the first!

Whilst we came 27^th out of 30 we still had a great time on the day, raising money for Caring in Bristol and our charity of the year Focus. We managed to raise £1,182.50 (including Gift Aid) in advance and even more on the day in cash donations from fans and supporters.

We also had an ARAG yellow gazebo set up by the water all day with our Head of Sales, Andy Talbot, flipping burgers for hours on end to keep the hungry D-ARAG-ONS and their friends and family fuelled up for the races.

It was a really great day, with fantastic weather and a lot of fun had by all. And we were watching the techniques of the best teams, so we’ll do much better next time!

If you'd like to donate towards this great cause you can do so by clicking here to go to our Virgin Money Giving page.

Click here to watch the team warming up!

What has legal protection got to offer the insurtechs?

ARAG has done a succession of deals with new partners in the insurtech sector, but what does the legal expenses provider have to offer these innovative start-ups that is so attractive?

It’s hard to open a magazine (well… email) these days, without seeing the word ‘insurtech’. 

There’s certainly a buzz around the term. Even just the names of some of the businesses have the air of innovation about them: Neos, Homelyfe, Cuvva, Dinghy et al.

But, as is so often the case, the term 'insurtech' covers a multitude of innovations. Some are more concerned with how insurance is bought and sold. For others, technology offers a key to managing risk or reducing the impact of claims.

So, how does ARAG fit into all of this, and why are we doing so many deals with insurtech businesses.

First and foremost, ARAG offers flexibility. The legal expenses sector never used to be known for it’s innovation, with providers competing largely on price to deliver a one-size-fits-all, take-it-or-leave-it solution.

The stack-it-high-sell-it-cheap proposition still dominates the market, but it simply doesn’t work for most insurtech businesses, that need legal expenses and assistance solutions that fit perfectly with their products, policyholders and business models.

For Neos, the insurer that uses “smart home” technology to help either prevent claims or reduce their impact, the flexibility needed was all around the claims process and how ARAG’s home assistance service could integrate seamlessly into their operations to help lessen the cost of claims by minimising the damage that incidents might cause.

Another quality that insurtech business often look far is agility. It’s one thing to be able to tailor our products to the needs of our clients but, if it took us 12 months to get our operational or IT ducks in a row, then most start-ups will have long since walked away.

Our products have their own technological innovations too. Many brokers and their clients have been surprised by the sophistication of our ARAG Legal Services website with its digital legal document building tools for personal policyholders and businesses.

But ARAG’s recent successes in the insurtech sector are actually the product of something we’ve been doing since day one, which is building products that work for our partners and their clients and not trying to sell them a product that just works for us.

Video guide to ARAG Legal Services website

We’ve created a new video to provide a short overview of our commercial section of the ARAG Legal Services website, to help business customers understand the ease and benefits of this valuable addition to the commercial LEI policy.



Our short,animated video provides a step-by-step guide to the website showing the simplicity and use of the website.

Our comprehensive, jargon free law guide, will help policyholders get to grips with business laws and regulations. Our extensive range of easy to customise documents will help them comply with the law and protect their business.

The top services include:

-employment agreements

-employee handbook

-debt collection letters

- Health & Safety compliance review

-job offer letter

-and more…

With ARAG Legal Services;your customers;will have access to a host of useful and legally binding documents at their fingertips and provide value to the policy... even if your customers never make a claim.

Audit Trail to London

The ISO27001 (Information Security Standard) is managed by a small team, comprising of IT Management (Bob Moreton, Ben Clarkson) and six internal auditors drawn from various departments within the company. The Auditors have been instrumental in ARAG annually retaining this important certification for the last three years.

In recognition of the team doing it “for the love” (as they all have very busy day jobs) they were recently rewarded with a trip to London. First stop on this whistle-stop tour was a visit to the Lloyd’s building in the City of London, kindly arranged by our Underwriting partner Brit, where our team were educated on the history of the market’s roots in maritime insurance and shown around the famous boxes. Our team thought it was interesting to note that the visitor seats that the brokers sit on were shorter and more uncomfortable than the box seats, perhaps demonstrating a position of power and of time constraint!

This was followed by another tour, this time at Brit’s nearby offices in the fabulous Leadenhall Building, although some of the team weren’t so keen on being whizzed up in the glass sided, super-fast lift to the 40th Floor and feeling like it was only just clinging to the outside edge of the building.

Of course, there is no such thing as a free lunch so the team then carried out an audit of the ARAG London office (which opened in 2016) and falls within the scope of the ISO certification. The audit includes ensuring the physical security of the office by querying the visitor process with receptionists, and monitoring the server room which was suitably air conditioned, so the team were unsurprisingly quick in completing this audit - brrr!

To follow on from the earlier maritime theme, the team were rewarded with drinks at The Oyster Shed and dinner in Borough Market, followed by a sleepy train journey back to Bristol.

Many thanks to the whole team for a fantastic day and their hard work throughout the year!

The team includes:

• Ben Parkinson, Broker Account Handler
• David Caines, BTE Underwriter
• Fran Box, Learning & Development Coordinator
• Johanna Graham, CMU Team Leader
• Jordan Wall, Compliance Advisor
• Nigel Sobers, ATE Senior Claims Handler

Now is the winter of our… actually quite contented, thank you very much.

As anyone in the insurance industry knows, claims service can be the hardest thing to get right but great service can often go unappreciated. Winters are inevitably tricky for home emergency claims, which come in waves on the back of bad weather, leaving customers distressed and anxious. So, we’ve been particularly pleased with some of the positive feedback our claims handlers have been getting, as winter arrives.

“Lovely”, “Thrilled” and “Fantastic” are not words often used in the insurance claims process, but all are among the many plaudits offered by ARAG Home Emergency policyholders as we helped them through some of the stressful events that the recent storms brought with them.   

“A lot of our Home Emergency business is in the High Net Worth sector,” comments Head of Sales, Andy Talbot “so, customer expectations are understandably high. But that makes feedback like this all the more gratifying.”

It’s no secret that the key to delivering any service is setting clear expectations and meeting or surpassing them. Customers are generally understanding, even at the worst of times, but they need to feel that someone has a plan and the expertise to put things right, as quickly as possible.

“We don’t try to pretend that we never fall short of our own, very high standards and there are always surprises that old properties and a British winter can throw at you,” continues Andy, “But we’re the first to put our hands up if something doesn’t go according to plan, and the claims teams are brilliant at keeping customers informed and helping them through what are always really stressful times.”

“Quality of service has always been one of the key things that ARAG has differentiated on. So, we really have to deliver on that. As we head into another winter, I’m really pleased that we’re living up to the high standards that partners and policyholders have come to expect of us.”

Further discount applied

Last week’s announcement of a new process for setting the discount rate applied to serious injury compensation did not come as quite the surprise that the sudden hike in March did, and the proposals seem targeted on the middle ground between insurers and those representing severely injured accident victims. ARAG’s Product Development Manager Lesley Attu takes a closer look at the announcement.

Liz Truss sent the insurance industry into a tailspin a little over six months ago, when she announced a change to the ‘discount rate” from 2.5% to -0.75%. Share prices dropped, premiums were hiked and the insurers’ PR machines went into somewhat unseemly overdrive, demanding that the ‘crazy’ decision to ensure that people with catastrophic injuries should be adequately compensated, be urgently reviewed.

It may not have come about quite as quickly as some would have liked, but the MoJ’s proposals for a new mechanism to set the discount rate seem designed to strike a compromise. If Lord Chancellor David Liddington’s prediction that the new system would currently generate a rate between 0% and 1%, then it could fall very close to the mid-point between the -0.75% that so outraged the ABI and the 2.5% that it lobbied and fought so hard and for so long to preserve.

The MoJ says it will maintain a 100% compensation rule so that claimants should receive full compensation for the loss caused by the wrongful injury, and not any more, nor any less. It has accepted that the existing legislation governing how the rate is set is unrealistic and could result in awards that significantly overcompensate claimants.

The consequence, it claims, is that the NHS and other public sector bodies can be adversely affected and insurance premiums are inflated.

The MoJ has also acknowledged that injury victims are likely to be more risk averse than ordinary, prudent investors but that “low risk” rather than “very low risk” investments would represent a fairer benchmark. 

Primary legislation is necessary and, once it is passed, the discount rate will be set by the Lord Chancellor, who will take advice from a panel of independent experts. The panel will be chaired by the Government Actuary and will include four other members who will bring experience as an actuary, an investment manager, an economist and a consumer investments expert. HM Treasury will continue to be a statutory consultee for each review, which will take place every three years.

The panel will still be able to set different rates for different types of case, but the principles behind how the rate is set will be set out in the legislation.

So far, the Lord Chancellor’s news has been received more enthusiastically by the insurance industry (and its investors) than those representing injured victims, but only time will tell if the new rate setting mechanism will prove fairer or not.

Big news for small businesses

The banking world has been in the dog house for a while now but a new initiative from the Financial Services Authority (FSA) looks to keep them there for a bit longer. Another mis-selling scandal has emerged in relation to the sale of interest rate swap products to small businesses.

According to an article in the Independent interest rate swaps are “complicated derivatives that have been sold as protection - or to act as a hedge - against a rise in interest rates”. The FSA have identified that more than 90% of the products were mis-sold to the small business sector accumulating to an estimated “total [of] as much as £1.5 billion across the sector”.

As a result of the mis-sold product many small businesses are left with hefty bills, however the FSA has set out a framework for the banks to provide compensation. As quoted in the Telegraph, Vince Cable sets out that “the immediate priority is to ensure small businesses are not driven out of business by banks pursuing liabilities for swaps that they mis-sold”.

With this in mind, ARAG can provide your small business customers with the means to pursue the compensation that they are entitled to with the support of Recourse After-the-Event insurance.

Make that prospect list and then make it happen!

Now is a good time for insurance salesmen and saleswomen around the land to look down the funnel at the pipeline and see where the new business is coming from.

I have a book of existing business so the first effort is to ensure that this is retained. The problem is that you never will manage to keep all of it. Businesses close or are acquired. People move on and new people with different priorities move in. A book of business will always decline without sales input.

However, your existing book of business is also a great source of new revenue. You need to ask yourself: Do you handle all of their business? Can they recommend you to someone else? As always, diligent efforts will prove to be beneficial.

On the other hand you will also need to target a completely new set of customers to create or renew your database of prospects. Here are a first few steps:

• Define: Your area, your products and what your company wants to achieve.
• Research: Invest the time upfront to save it later down the line by building a comprehensive list of potential contacts with names, job titles, contact details and any other useful information
• Refine: Ensure that your data is clean and remove out of date information. This exercise is as good as any excuse to get in touch with people and will help you to prioritise your list.
• Verify: Does your sales manager agree with your list? Yes? Good! Let’s get on with it.

Unfortunately there is no short cut. You must make contact, you must pursue. Nobody likes it but it is just something that has to be done.

Two further thoughts:

• Don’t outsource prospecting. It doesn’t work!
• Now and then enquiries come to you. Jump on them.

Broker feedback instigates BTE sales expansion and restructure

Expansion of our innovative product range, ever growing client base and beating sales targets year on year provides the perfect conditions for BTE sales to reshape the team structure. From a team of two five year ago, headed by Andy Talbot, today it  boasts eight field sales and office based personnel.

In March, Matt Warren was appointed Broker Business Manager.  He moved into the role five years after he joined ARAG as a Business Development Executive.

With a long history of experience in the legal expenses industry, including line management roles he accepted the challenge to drive the broker sales team forward over the coming years. Andy Talbot, Head of Sales comments: “Matt has been with the company practically from the start and has excelled in generating business from brokers in the South of England. His new role makes him additionally responsible for the UK-wide broker facing development team.”

More recently in August, ARAG further strengthened their sales team when Chris French joined the team, taking on the role of Broker Account Handler.

In this newly created position, Chris is responsible for supporting the Business Development Executives, providing office-based support for brokers, monitoring customer satisfaction and also be accountable for his own panel of brokers.

Broker Business Manager, Matt Warren comments, “At ARAG we respond quickly to customer feedback and the addition of Chris to the team proves our commitment to continually benchmarking our performance and strengthening where required, resulting in an enhanced service to our customers.”

It doesn’t stop there. We are positive that we have the relevant expertise, quality product offerings and high level of service required to continue to attract high calibre ‘household’ names. As such we are expanding our Corporate Sales function and expect further insurers and underwriting agencies to work with us in the near future.

To keep up to date with us and discuss your needs, please visit Andy Talbot, Matt Warren and Jon Layton on Thursday 13 September at EXPO South, Ascot - stand 7.

Mutually beneficial outcomes

While there is no definitive number of associations and similar organisations listed in the UK it is estimated that there is well over 300 that are fully staffed and up to a 1000 smaller associations in the UK. For you, the broker, this represents an excellent opportunity to maximise income.

Trade associations have several main functions for the companies that they serve; these include representation, providing economies of scale, supplying information and training. Alongside this associations must work hard to attract new members and retain existing, therefore a range of additional member benefits are offered.

Recently, ARAG has seen a surge of brokers working with associations to provide an insurance offering, including ARAG legal expenses insurance. This growing trend is mutually beneficial for all involved, members receive essential cover with their membership fee, associations can negotiate a competitive rate and for the broker and ARAG we maximise income and grow the business portfolio.

ARAG can provide legal expenses insurance on a commercial or personal basis and most importantly it can be tailored to the needs of industry depending on specific regulatory requirements. It may also be that there are specialist solicitors that the association recommend; ARAG may be able to work with them to provide the cover.

Alongside the legal expenses insurance, ARAG products also come with a range of professional services, such as a 24/7 legal advice helpline and an online document service, helping businesses to concentrate on what they do best.

So, whether you already work with associations or are looking to move into this market the opportunities are there to be taken and a partnership with ARAG means that it is likely to be a smooth and profitable journey!

To find out more either get in touch with your local ARAG Business Development Executive or email chris.french@arag.co.uk

Landlord’s Emergency Solutions, the perfect pesticide?

Landlords of residential properties will often encounter problems with tenants but what about smaller unwelcome visitors taking up residence? Pests can not only cause damage to a property but create an uncomfortable living environment. There are also difficult conversations to overcome with tenants as to whose responsibility it is to get rid of the pest problem. ARAG’s emergency assistance policy for landlords provides the solution.

ARAG’s expanding range of emergency assistance products includes Landlord’s Emergency Solutions which has been designed specifically for landlords of residential property. This cost-effective insurance product provides assistance from a qualified contractor if an unforeseen event makes the property unsafe to occupy or causes actual or potential damage to the property or its contents. Insured events (see list below) include vermin infestation, something that marks Landlord’s Emergency Solutions out from many others.

• Breakdown of the main heating system
• Plumbing and drainage problems
• Damage to or failure of locks and windows
• Breakage or failure of the sole toilet unit
• Loss of the domestic power supply
• Vermin infestation
• Emergency alternative accommodation for tenants if the property is unsafe to occupy.

So what other benefits can your clients expect? Our helpline is available 24 hours a day, 365 days a year and the costs associated with the call-out charge, parts and materials and labour costs will be covered to an agreed limit. As always there are terms and conditions, but if you would like to offer this product to your clients, do not hesitate to contact us for more information.

QuickQuote re-launch – Quote in 60 seconds

ARAG’s online quotation system for commercial legal expenses insurance has received some major upgrades, and is now known as QuickQuote. This new online quotation engine is designed to make it easier and more flexible for brokers to use.

ARAG was voted “Best legal expenses provider” in 2010 and they were congratulated for their “quick and efficient” online quotation system. However, they have further improved on their original system, which has led to this re-launch of a much more efficient quote engine, thus making it one of the fastest quote-and-buy facility in our market.

QuickQuote offers an extensive range of enhancements, including:

• Quotes in just 1 minute
• Simple application form with keyword explanations, training material and “how to” presentations to guide brokers through the process
• Immediate documentation which can be printed straight from the website
• Quotations and hold-cover notes which can be emailed directly to a broker’s email for convenience
• New search facility for existing quotations, making it easier for them to be found, edited and resubmitted
• Variable commission rate for brokers, from 0-25%
• No claims discounts, different levels of indemnity and hold-cover options

“The majority of ARAG’s business arrives under scheme arrangements, although the demand for standalone polices remains high.  A significant number still require individual rating, this is what we had in mind when we enhanced the QuickQuote facility,” says Andy Talbot, Head of Sales at ARAG.

Access to QuickQuote is restricted to agency partners of ARAG, if you are not currently an agent with ARAG; find out more on our website: www.arag.co.uk

Added value products – getting it right

Having run an insurance brokerage in the past, I still remember the regular letters from my motor insurance providers telling me that they were reducing my motor commission. As income from that source was under constant downward pressure, it was only natural that you would examine all of your options for maintaining or even boosting income. Therefore, the ancillary products which sat alongside the main policy became of critical importance to balancing the books.

The days of having an all-inclusive price for the main policy and all of the additional add-on products, such as legal expenses, are over. Nowadays, it is common sense that customers should know how their insurance premiums are made up.

Mandatory commission disclosure did not happen but high margins are causing concern among our betters. The FSA is now on the case and no doubt their successor will follow suit, so now is a good time to make sure your house is in order.

Here are a few thoughts to be going on with:

1. Optional add-on insurance: State this clearly and price it separately
2. Compulsory add-on insurance: Clearly point this out to the client
3. Preferred provider(s) for add-on insurance: Think carefully if the sale is advised or non-advised and reflect this in your terms of business
4. Mis-selling scandals: Avoid this by backing up your add-on insurance with a ‘demands and needs statement’
5. Documentation: Ensure that your clients receive the correct documentation for the policy they have bought
6. Margins: Consider carefully what a reasonable margin would be
7. Find out more: For further advice, facts and figures on selling optional add-ons read the FSA report: http://www.fsa.gov.uk/pubs/other/factsheet_extras.pdf

Ultimately, we should all consider if optional add-on products are genuinely useful for the client and not just a vehicle to increase revenue. I used to think to myself, would I sell this to my mother? If so, at what price?

If revenue from commission and optional extras is not enough, there is always the administration fee. But that is a whole other subject….

John Gray, Corporate Development Executive
Find out more about ARAG legal insurance products

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.

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.

A new addition to your wedding checklist, get divorce insurance

I find myself in a strange predicament at the moment as I am getting married next month, yet at work I am charged with marketing ARAG’s latest offering, divorce insurance. This is not something that I imagined adding to my ever growing checklist when I got engaged however it has definitely given me some food for thought!

Launched to the market on Monday 6 September, the two products – Pre-nuptial Legal Solutions and Divorce Legal Solutions – will be sold alongside nuptial agreements and provide the policyholder with a legal expenses insurance policy that starts from the date of a marriage or civil partnership. 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.

The Government has perhaps unwittingly paved the way for the development of such products with its plans to restrict the provision of legal aid in most divorce cases. As pointed out in an article by the Daily Mail (November 2010) these changes, “mean anyone who wants to protect their share of the fallout from a broken marriage will have to pay for their own courtroom advice... The proposal raises the spectre of hundreds of thousands of husbands and wives taking out ‘before-the-event’ policies against the cost of divorce.”

Further to this the landmark case of £100m pound heiress Katrin Radmacher highlights the huge potential for an insurance policy that covers costs arising from a legal challenge to the nuptial agreement. In the case, Radmacher’s pre-nuptial agreement was upheld by the Supreme Court, reducing her ex-husband’s settlement from £5.8m to around £1m. Following this, the Law Commission is considering a statutory framework for pre-nuptial agreements.

It therefore seems likely that interest in divorce insurance will grow considerably in the coming years. This trend is backed by figures in the 2011 Matrimonial Survey by Grant Thornton where it shows that 58% of their respondents (family solicitors) reported that their level of pre-nuptial advisory work has increased [in comparison to 2010], and the Office for National Statistics Bulletin showing the number Civil Partnership dissolutions in the UK in 2010 increasing by 44%.

Add to this the precedence set in some European countries where there is already an established market for divorce insurance and the potential for development in the UK is clear to see.

Two law firms who draft relatively high numbers of nuptial agreements – Mishcon de Reya and Prolegal - have already made these products available to potential clients. The press coverage received so far, including a feature on Radio 4 show PM, has also on the whole been positive:

The Guardian: "Getting married? Top legal tips for couples-to-be…1. Have a prenuptial agreement.

The Economist: “With half of all marriages doomed to fail, even the moderately hard-headed may be interested in ways of mitigating the danger.”

Financial Times: “So, you’ve just got married, what do you do? A) Go on honeymoon, B) Celebrate with your family, or C) Take out divorce insurance.

If you answered C then, (somewhat surprisingly), you are not alone... while divorce insurance is unlikely to take off for the mass market any time soon, it could work for individuals who have already taken the time to craft a pre-or-post nuptial agreement.”

Financial News: “For the high net worth individual for whom a pre-nup just isn’t enough protection from the one they love, Mishcon de Reya is offering additional new armour for their clients’ personal fortunes: pre-nup insurance.”

Moneyhighstreet: “Savvy investment”

I will leave it to ARAG’s MD, Tony Buss to sum up, “While some may see the very idea of ‘divorce insurance’ as unromantic, the realities of modern life and the government’s legal aid and costs reforms will make it harder for ordinary people to access justice before the courts, meaning this is the right time to launch such a product.”

Find out more about the products: Pre-nuptial Legal Solutions Divorce Legal Solutions

Are you always open for business?

Building on the success of the Home Emergency Solutions product that provides immediate assistance in the event of a domestic emergency, ARAG have launched a new product specifically designed to serve the needs of small businesses.

Filling a gap in the market, Business Emergency Solutions provides cover that protects business premises against situations such as vermin infestation, loss of keys, breakdown of the main heating system and many others emergencies that can halt a small business in its tracks. Health and safety regulations are such that emergencies can shut a business down until the problem has been resolved, often at a significant cost, causing stress and loss of earnings. This product aims to tackle these problems by ensuring that the insured receives prompt assistance from trained professionals. It’s distinctiveness in the marketplace is demonstrated by the comprehensive coverage of potential emergency situations (listed below) and its packaging within one convenient product.

• Breakdown of the main heating system


• Plumbing and drainage problems


• Damage to or failure of the premise’s locks and windows


• Breakage or failure of the customer toilet facility


• Loss of the power supply


• Lost keys


• Vermin infestation within the premises


• Removal of a fallen tree or large branch that blocks access to the premises


• Removal of fly-tipping waste

Find out more about Business Legal Solutions, including information about limitations and exclusions, on the ARAG website.

Employment Tribunal System Part II

Following from the last blog post on the Employment Tribunal System a consultation paper was released on 27th January which seeks views on a number of proposals which if successfully implemented are intended to address concerns raised by the British Chamber of Commerce by reducing costs and making workplace disputes easier to resolve.

Citing the government’s aim to review employment law in order to make “the UK to be the best place to start and grow a business” the paper set outs a number of proposals that it hopes will “encourage parties to use early dispute resolution”, and if the dispute does go through an employment tribunal to make “cases move more swiftly to conclusion, so as to contain costs for employers, employees and the taxpayer”. (i)

With proposals ranging from “increased awareness of mediation”, to putting forward “legislative proposals to simplify the employment tribunal process” and amending the qualifying period for employees from one year to two before they can bring a claim for unfair dismissal to an employment tribunal, the consultation paper is bound to attract many responses before its April deadline. You can read all of the proposals and background information in the consultation paper online. (ii)

If implemented the proposals could benefit both the employee and employer with improved efficiencies, early resolution and a reduction in cases escalating to employment tribunals. Although there may also be some negative financial implications for unfair dismissal claimants in the form of introducing a fee and for employers in the form of introducing fines if the employer is found to have treated their employee unfairly. Moreover, some proposals could have unforeseen consequences which add costs to the system.

ARAG policyholders will be well-placed to welcome these proposals with 24/7 legal advice, updated downloadable legal documents and the assurance that policy coverage will reflect any future changes to the law.

(i) & (ii): Department for Business, Skills & Innovation and Tribunals Service (2011); Resolving workplace disputes: A consultation January 2011