We were very surprised at both the timing and content of the
new Law Society LEI survey. The recent appeal cases of Webster Dixon LLP and
Equity Syndicate Management/ Motorplus Limited t/as ULR Additions in England; and
Sneller and DAS Nederlandse Rechtsbijstand Verzekeringsmaatschappij NV in the Court of Justice of the European Union have
reinforced already firmly established rules of what is allowed and what isn’t
when it comes to policyholders’ rights to choose their own solicitors and an
insurer's liability for lawyers’costs. Essentially
nothing has changed.
Here at ARAG we have a substantial solicitor panel with no
in-house handling carried out. We do not own an ABS and have no intention of
competing with solicitors. With this in mind ARAG, together with other legal
expenses insurance providers, have engaged with the Law Society over recent
years to find common ground and a positive way forward with solicitors. Most
recently, at the end of last year, discussions focused on establishing a non
–panel solicitor agreement, to ensure consistency and fairness when a non-panel
solicitor is engaged.
We were disappointed to see the Law Society take such a
negative stance on LEI insurance, particularly considering that the survey is
very unlikely to yield anything new in the way of solicitor opinions on
freedom of choice. The rights of the customer are always our primary concern
and there is no evidence to support the notion that reputable LEI providers are
routinely or even occasionally, unfairly denying policyholders their rights in
this area.
In our view, the survey seems very one-sided, almost to the
point of being misleading. ARAG fully accepts that policyholders must not have
claims “shoehorned” to inappropriate lawyers, and indeed, we will routinely try
to match the type and complexity of the claim with the right firm and
individual within that firm; where Counsel is required, they will also be
suitably experienced. Provided an appropriate lawyer is appointed however, it
remains to be shown what detriment there is to the client in having a panel
solicitor appointed. Our experience shows time and time again that panel
lawyers have better success-rates than non-panel firms, but at a much lower
cost. Both outcomes are of course beneficial to policyholders in direct and
indirect ways. We would therefore question whether, at the heart of the survey,
the intention is to serve the interests of the client (which of course remains
a solicitor’s overriding duty) or rather members of the legal profession that
do not happen to be on an insurer’s panel.
Paul Upton
Head of Claims
Link to Law Society comment on survey
