Making the most of BTE

A recent report conducted by the Legal Ombudsman considers two key points in the run up to LASPO’s implementation. Firstly, how before-the-event legal expenses insurance (BTE LEI) is going to fill the gap and secondly how well it is currently placed to do so.

As reported in Litigation Futures, the report commissioned a YouGov questionnaire which found that while, “40% of those surveyed had some type of legal insurance cover”, 74% of these were “unsure or didn’t know what financial cover their policy provided.”

“Concerning” was the word coined by the Chief Legal Ombudsman, Mr Sampson and perhaps rightly so. As a legal expenses insurer we know that we provide high-quality BTE LEI products that are designed around the customer’s needs. We work hard to make our policies understandable to the masses, following the FSA guidelines and provide training to the brokers who are on the front-line selling our products. There are no secrets; it is all down in black and white with Keyfacts in both the point of sale and policy wording.

However, for most it is currently sold to them as an add-on product which tops up the cover they receive in their main insurance purchase, for example car or home insurance. Already there is a barrier as it is likely that the LEI is buried within the main policy wording. Before I started working in insurance, I would simply skim the wording and make sure that the key areas were covered and then hope that I wouldn’t need to make a claim. I am much more conscious now of checking carefully, but I think this is minority when it should be the other way around. Saying that, if I did have a legal issue and needed to consult a solicitor, if the solicitor is doing their job properly they should discuss with the client their insurance details and investigate if BTE is available. After all, you only need the policy at the time of a claim.

Therefore, perhaps it is a general education of the benefits that is required. As found in the survey only 40% of those asked had LEI, in Germany for instance 60% of the population have some form of LEI. The report acknowledges that “legal expenses insurance is beneficial for the simple reason that it’ll continue to allow people to take legal action when they would not otherwise have been able to afford it.”

LASPO – Insolvency cases exempt from reforms

Further news to the LASPO Bill, which was given Royal Assent last month; with the recoverability of success fees and ATE insurance premiums being unavailable with effect from April 2013, insolvency cases will now be exempt from no-win, no-fee reforms until April 2015.

LASPO is still progressing but there are still big issues and small yet significant concessions that bring into question how it will be implemented as early as spring 2013. As discussed in a Legal Futures article, problems with QOCS still exist, the government is “seeking further advice from the Civil Justice Council” with speculation that there may be some issues making the “qualifications work”. QOCS is an important aspect to get right as claimants are intended to be protected from defendants’ costs in most circumstances, even when they lose.

On the concessions side, Mesothelioma cases were excluded during the ‘ping pong’ stage between the Houses until an impact review has been undertaken. The latest exemption from the April 2013 date brings us to the insolvency cases.

As reported in Law Society Gazette, Justice Minister Jonathan Djanogly made a written statement to the House of Commons, “Insolvency cases bring substantial revenue to the taxpayer, as well as other creditors, and encourage good business practice which can be seen as an important part of the growth agenda with wider benefits for the economy. These features merit a delayed implementation to allow time for those involved to adjust and implement such alternative arrangements as they consider will allow these cases to continue to be pursued.”

The Law Society Chief has welcomed the latest decision asking that “this logic applied to other types of cases, where a similar implementation delay, until 2015, would help to avoid unwelcome impacts on ordinary people’s right to secure legal redress.”

The LASPO rollercoaster continues, be sure to check back soon for more news!

Yet another successful BIBA Conference finished for the year

So there we have it, BIBA 2012 has come and gone for the year, and what a success it was!

ARAG spent months planning and organising their presence at this massive yearly conference, which was held in the bustling city of Manchester; one of the most popular BIBA destinations. We were very pleased with our stand which incorporated the new brand strategy. With free goodies and beverages, the stand remained busy throughout with delegates, and lots of good leads were generated.

Amongst nearly a full house of ARAG management and Business Development Executives, we were pleased to welcome Dr Wolff Graulich, who joined us from Dusseldorf; our ARAG Germany headquarters.

The first day at the conference went well and was extremely productive, so it had to finish just as well - some fine dining with guests at Vertigo; set in the heart of Manchester. The beautiful restaurant is spread over five floors, offering modern elegant food in exquisite surroundings. With a wine and cocktail range as diverse as their creative food, there was time after the evening meal to catch up and relax.

We’ll look forward to BIBA returning next year, where it will be held at the ExCel Exhibition Centre in London. Plans for next year’s stand are already in progress with lots of creative ideas flowing through our marketing department, so watch this space!

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.

Justice for business and supporting growth

On 8 May, the Ministry of Justice (MoJ) published a report; Justice for Business, summarising its programme of reforms. According to the document, these reforms are aimed at transforming the justice system by making it more effective, less costly and more responsive to the public. So how does it measure up?

The report highlights the MoJ's progress against their Action Plan for Growth in the Legal Services Sector which was published May 2011, and its achievements under the coalition government.

“[The MoJ is] supporting increased competition and growth within the UK legal sector by implementing Alternative Business Structures (ABS)”. In October 2011, the MoJ began legislation allowing the creation of ABS; provided for non-lawyers to partially/fully own, or to control firms providing legal services. Some legal expenses insurers have taken steps to become an ABS but at ARAG, we have no intention to join up. Instead, our aspiration is to work with legal practices as partners, not compete against them.

"We [the MoJ] are working to ensure that costs for participants in civil court cases are proportionate.” ARAG is a member of the Consumer Justice Alliance (CJA), which has been formed to highlight the impact that Lord Justice Jackson’s proposals on civil litigation will have on injured victims. Despite opposition, the reforms, contained within Legal Aid Sentencing and Punishment of Offenders Bill received Royal Assent on 1 May 2012. The government is now considering other measures necessary in the implementation of the Act such as the introduction of Qualified One-way Cost Shifting (QOCS), which could have a negative impact on third parties insurers and local authorities.

“The MoJ is moving towards implementing fees for employment tribunals. This will ensure that tribunals are able to focus on genuine claims and help to avoid business being faced with unnecessary or unfair costs.” These changes aim to encourage potential claimants to consider the strength of their case, which they hope will lead to “more realistic expectations for individuals and greater certainty for employers.” There have been mixed reactions to these changes but ARAG is closely following developments to ensure that our products provide the best cover for clients.

“We [the MoJ] are taking forward measures to reform the civil justice system, helping individuals and businesses resolve disputes.” The MoJ is implementing a range of measures which will benefit businesses by making dispute resolution quicker and less gruelling. These include proposals to speed up the process of resolving small claims, increase the small claims limit from £5,000 to £10,000 and refer more cases to a Small Claims Mediation Service. ARAG is working in partnership with Go2mediation to provide an online mediation service. The aim is to reduce costs of litigation and save policyholders the time and stress involved in court proceedings.