ARAG Legal Services - Online Legal Updates

The legal documents and law guide available to ARAG policyholders who have registered to access our Legal Services Website is constantly reviewed and refreshed.  Registered subscribers can opt to receive monthly lists of all revisions. As the latest round of updates affects some of the most popular documents we thought it was worth drawing your attention to selected changes. We hope this will encourage you to recommend the site to your clients when arranging or renewing ARAG policies. 

Tenancy
Assured shorthold tenancy. This document has been chosen to trial new postcode look-up functionality. When the user needs to enter an address during the questionnaire, they can now enter the postcode, search and the select the correct address to be inserted as their answer. If the trial proves successful we will begin to introduce this across all documents. The formatting of this document has also been generally reviewed, including an improved table in the inventory section.
Notice under Section 21 of the Housing Act 1988. The following changes were made: i. Simplified notice text, in particular to comply with current case law concerning periodic tenancies. ii. Added questions and logic to assist user to specify the correct date in the notice after which possession will be required in the case of a periodic tenancy. iii. Added information screen in questionnaire to explain the concept of service of the document. iv. Added guidance note regarding methods of, and time remaining available for, service, and on steps that can be taken to prove service. v. Added user warnings (validators): a. to ensure that notice is not given under s.21(1)(b) where the fixed term has already expired or where the end of the notice period is before the end of the fixed term; b. to warn about the service of a notice within 6 months of the tenancy commencing; c. to ensure that sufficient notice is given. vi. Added questions and validator to ensure that where a deposit has been taken, the notice cannot be used if the deposit has not been protected or the appropriate information has not given about the protection scheme. vii. Enabled notice to be signed by agent on behalf of landlord, or by one landlord on behalf of multiple landlords. viii. Amended Guidance to clarify difference between a fixed term and periodic tenancy.

 

Consumer goods & services
Reject a seller's denial of responsibility for faulty goods. This document was reviewed to make it more user friendly. A provision was added for the user to reclaim the costs incurred in returning the goods
Complaint to a dry-cleaning company about garment damage This document was reviewed to make it more user friendly. The scope of the document was also increased to include an option for the user to request that the garment be repaired or replaced.
Complaint to a telephone company about a high bill and Complaint to a water company about failure to meet standards These documents have been generally reviewed to bring them into line with house style and to make them more user friendly.
Employment Employment agreement, Employment statement,  Fixed-term employment agreement, Job offer letter and Executive director's service agreement The national minimum wage (NMW), apprentice and accommodation offset rates in the guidance have been updated for October 2013. Amendments also reflect changes to agricultural wages.
Employee handbook Amendments were made to the following policies due to changes in law: i. Basic holiday entitlement - limiting the amount of holiday leave that can be carried over into the next holiday year to 20 days for employees on long-term sick leave. ii. Harassment policy - amended the definition of harassment for England, Wales and Scotland, following the repeal of the third party harassment provisions in the Equality Act 2010.
Grievance letter to employer, Interview checklist, Job application form and Staff appraisal form Amendments were made to the Guidance deleting references to third party harassment, following the repeal of these provisions in the Equality Act 2010
Health & Safety compliance review and policy creator Changes made to the section in the Guidance on the 'Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR)' as a result of changes to the legislation. The changes include amending the list of 'major injuries' and renaming it 'specified injuries' and replacing the list of reportable work-related diseases from 47 conditions to 8 conditions. Changes do not affect Northern Ireland.
	Settlement agreement   This document has been amended and renamed as a result of the Enterprise and Regulatory Reform Act 2013, which has changed the name of compromise agreements to settlement agreements. References to third party harassment have been removed, following the repeal of these provisions in the Equality Act 2010.   The questionnaire and Guidance have been overhauled to improve the user experience. A page has been added to the document, detailing what the user needs to do when they have finished.

ARAG UK Policyholders are guaranteed fair treatment when they have the right to choose a lawyer to represent them in proceedings.

 The European Court published its decision on 7th November in the case reported on as “The Sneller Case”. This concerned the “free choice of lawyer” in legal protection insurance.

 While some commentators have given the impression that the outcome of the Sneller case is somehow controversial and likely to cause UK insurers to change their position with regard to freedom of choice that isn’t the case for ARAG policyholders who have long since been permitted and always will be able to exercise their legal right to choose. In case you need a refresher here is the back ground to the case.

 Background to Sneller

 The case was referred to the EU Court consequent to a request by the Dutch Supreme Court in proceedings between Mr Sneller and DAS Nederlandse Rechtsbijstand Verzekeringsmaatschappij NV (‘DAS’), seeking clarification on how the EU Directive 87/344 (which regulates freedom of choice in legal expenses contracts and is transposed into national law in the UK by the Insurance Companies (Legal Expenses Insurance Regulations) 1990) should be interpreted.

Mr Sneller was a policyholder of DAS in the Netherlands who wished to use his own lawyer for an employment claim. DAS required Mr Sneller to use its own in-house lawyer on the basis that it is not mandatory to engage a registered lawyer to represent claimants in employment disputes in the Netherlands and the insurance contract limited freedom of choice to cases where a claim must be delegated to external counsel or where in DAS’s opinion it was necessary to instruct an external lawyer.

Mr Sneller argued that if judicial or administrative proceedings are brought, the contract terms must always offer the insured person the right freely to choose his legal representative.

The EU Court judgment

The first two rounds went to DAS, but the European Court agreed with Mr Sneller and ruled that EU law on freedom of choice prevents a legal expenses insurer, which stipulates in its insurance contracts that legal assistance will be provided by its employees, from also providing that the costs of legal assistance provided by a lawyer or legal representative chosen freely by the insured person will be covered only if the insurer takes the view that the handling of the case must be subcontracted to an external lawyer.

 Secondly the EU Court said that this limitation on the rights of legal expenses insurers would apply irrespective of whether or not legal assistance is compulsory under national law in the inquiry or proceedings concerned.

According to this judgment, DAS had restricted the insured’s freedom to choose a lawyer for legal assistance in a non-acceptable way, by reserving the right to decide whether an external lawyer is necessary or not to handle the particular case.

 Regarding the cost impact of this decision (particularly for those legal protection insurers who provide a large part of their legal assistance through their employees) the European Court has explained that the premium might be adjusted or costs payable by the insurer may be limited. In order to guarantee a free choice of lawyer it is not necessary to cover all costs borne by the insured, as long as that freedom is not rendered meaningless.

For detailed information here is a link to the EU judgment.
 http://curia.europa.eu/juris/document/document.jsf?text=&docid=144208&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=509849

 ARAG UK’s position
ARAG UK does not use in-house lawyers to represent claimants. We work with a nation-wide panel of firms that consistently deliver superior levels of customer service that we insist on and have appropriate expertise in the areas of law covered by our policies.

When it becomes necessary to issue proceedings our policyholders can choose their own solicitor if they wish but will be responsible for excessive costs where a firm will not agree to work according to our terms of business which allow for reasonable and proportionate costs. This is also true for applicant employment tribunal cases despite the fact that in common with the Netherlands it is not compulsory for representation to be provided by a qualified lawyer. Freedom of choice does not engage where an insurer covers damages or compensation – as in the case of employment compensation awards cover. 93% of ARAG claimants benefit by having their claim handled by a panel firm

If in the future we were to engage in-house lawyers we recognise that freedom of choice is triggered at the point it becomes necessary to issue proceedings and any such developments would be implemented on that basis.

Howell’s School could have been saved with legal insurance

The closure of Howell’s School in Denbighshire was possibly avoidable had the school in place adequate insurance arrangements against employment claims.

The school, which had a loss of £162,733 in its accounts filed in August 2012, had lost a case for unfair dismissal in which a teacher was awarded £38,000. The compensation is still unpaid. The finances are further complicated by another claim for unfair dismissal for a case lost in March this year against the former head teacher and his partner, who was head of PE and pastoral care in which compensation is still to be agreed.

Legal insurance is widely available to cover such disputes, paying both the legal costs to represent the employer, in this instance the school, and paying the awarded compensation to the ex-employees.

The closure of the school that had been at the heart of the community for more than 150 years is a catastrophe, particularly for the pupils and parents who have very little time to find a new school before the new term in September.  The closure will be even more difficult to accept by pupils and parents in knowing that had the school taking out appropriate legal insurance then some of the financial burden could have been removed, possibly leaving the school to serve the community for years to come.

Read the full story

Transport Select Committee Delivers a Refreshingly Balanced Report

The Transport Select Committee’s (TSC) third report on the cost of motor insurance focuses on the impact of whiplash claims on premiums. The report provides recommendations to the Ministry of Justice after considering evidence from a wide range of interests. ARAG admires the thorough approach of the TSC and endorses many of the report findings. Provided that the Government responds positively, the recommendations should ensure that individuals who have suffered an injury, including whiplash, as a result of a motor accident which was not their fault, will retain access to justice through the small claims procedure.

The UK is not the Whiplash capital of the world

The TSC considered medical evidence about the characteristics and effect of whiplash injuries, accreditation of medical experts, the volume of claims and to what extent whiplash claims are exaggerated or fraudulent. They concluded that 58% of traffic accidents result in whiplash injuries, affecting nearly 477,000 individuals in the last year.  This number represents the lowest number since at least 2007-8. The TSC urged the Government to analyse earlier accident statistics and the ABI to provide better data. The committee was not persuaded that the Government’s claim about the UK being the “whiplash capital of the world” could be established from evidence available.

The report expressed surprise that the Government had brought forward measures to reduce fraudulent or exaggerated whiplash claims without having even an estimate of the scale of the problem. ARAG has offices in 15 countries and our evidence supported the TSC’s view. Maybe the Government’s position would have been different had representatives from the legal profession been invited to the PM’s exclusive summit with motor insurers which took place on 14^th February? The TSC was disappointed to hear about lack of engagement with the legal profession.

Medical Reports

The Committee supported Government proposals for accreditation of medical practitioners (including physiotherapists) and suggested that the Government consider a random audit of medical reports. The Committee felt, that claimants should show some additional evidence to support their claim, whether from a visit to the GP or A&E soon after the accident, or evidence of the impact of the injury on their life. As ARAG deplores exaggerated and fraudulent claims we believe this to be perfectly reasonable.

Reducing the limitation period

As injury symptoms emerge relatively quickly the Committee recommended the Government explain why they were unresponsive to changing the limitation period for road traffic claims below £10,000 from three years to one.

The small claims threshold

ARAG provided comprehensive statements about the negative impact that increasing the small claims track threshold to £5,000 is likely to have on access to justice for motor accident victims. We realise that least well off drivers can be tempted to decline BTE legal expenses cover in order to reduce their premium. The committee was impressed by our argument that expecting individuals to have the capacity, confidence or appetite to instigate claims through the portal is unrealistic. They believed “that access to justice is likely to be impaired, particularly for people who do not feel confident to represent themselves in what will seem to some to be a complex and intimidating process”. They further noted that “insurers will use legal professionals to contest claim, which will add to this problem”.

Our evidence also raised concern about small claims track procedures having the potential to increase the risk of fraud. The TSC noted that procedural implications “could prove counter-productive in efforts to discourage fraudulent and exaggerated claims.” 

The committee recommended no change to the small claims threshold until the MOJ had assessed the impact of the Portal.

In conclusion

The TSC asserted that genuine claimants should not be demonised. Again the Committee expressed surprise that the Government had only listened to the insurers’ perspective and found this disappointing in the light of the Government’s own view that the insurers had encouraged unnecessary and excessive claims with their own business models. Insurers were further criticised for making offers in advance of receiving a medical report and for settling claims where fraud or exaggeration was suspected.

The TSC recommended that the Government explain how it will monitor whether or not motor insurers honour their commitment to ensure savings that result from legal reforms are passed through to consumers in the form of lower premiums. Fully recognising the dysfunctional and opaque nature of the motor insurance market the Committee called on insurers to be more transparent about financial and other links in the service chain.

It seems to us that after not being listened to for so long, and even worse being “blamed” for mischiefs in the legal system, the position of claimants has at last been appreciated. We are delighted to see that our submission to the TSC has influenced their report. In particular retaining the small claims threshold at £1,000 will ensure ATE remains a possibility for claimants who have not taken out BTE legal expenses.

 

 

 

ARAG ATE policy safeguards claimant

On the 18th January 2013, the High Court overturned an earlier judgment that an ARAG ATE policy was not good enough security for costs.

The bespoke wording expressly stated that the policy would only be void should there be fraudulent non-disclosure (and not for innocent or negligent non-disclosure), and even if there was, the cancellation provisions expressly stated that ARAG would be liable for costs up to the date of cancellation, so minimising any risk to the defendants costs.

The case was not the type to have an adverse verdict at trial, as it centred on technical issues rather than contentious facts, and so there was no commercial reason why the claimant would wish to jeopardise the policy by not complying with its terms. Quite simply, the policy was for the claimant’s own protection.

This case clearly shows that defendants will use the ATE policy as a way of making life difficult for the claimant, but fortunately in this case, the claimant had an ARAG policy that provided the safeguard for the claimant should they lose, and likewise for the defendant.

Permission to appeal has not been granted as yet, and the claimant was awarded the costs of the application.

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.

Seeking advice?

Are your customers fully aware of the additional benefits ARAG’s before-the-event legal insurance policies offer? A free legal advice helpline accessible 24/7 and manned by experts and access to a wide variety of legal document templates via the legal services website which can be downloaded at any time are two really valuable extra benefits.

With the New Year in full swing, now is the time to emphasise to your customers how these services can empower them to protect their legal rights by providing valuable guidance when help with legal issues is needed.

For business customers statistics from 2012 examining the usage of the legal services website show that the most popular group of legal document templates downloaded were related to employment (62% of downloads). These included employment agreements, documents related to employee disciplinary matters and accessing the comprehensive employee handbook. This was followed by documents related to debt recovery and behind that the health and safety category also proved popular.

For individuals and consumers one of the most popular documents to download was the free will, demonstrating the desire for many to secure their future. As with all documents, the simple step-by-step approach for the will document creation was appealing.

Landlords also utilised the service, sourcing documents ranging from tenancy agreements to Section 8 notices.

A similar pattern emerged with calls made to the legal advice helpline. In 2012, 68% of the calls made to our legal advisors related to employment matters. Other popular reasons for customers to call for legal advice related to landlord and tenant disputes, commercial issues, property-related queries and consumer matters.

These resources are incorporated into ARAG landlord, business, motor and family policies as standard which provides you with a helpful sales tool.  The value for the customer lies in helping them to manage the risk of disputes escalating and provide a cost benefit to those policyholders who do not need to make a claim under their policy. The added value to brokers is that these services create an effective retention tool when it comes to influencing policy renewal.

For more information, visit our website – www.arag.co.uk

 

A time for change... it is indeed!

The recent report - A time of change: solicitors' firms in England and Wales - published jointly by The Law Society, Legal Services Board and the Ministry of Justice examines the results of a comprehensive survey conducted with solicitors firms to provide a “benchmark of the profession”.

The report leads us to conclude that in the light of the recession, evolution of technology, changes to funding and legal aid and further challenges brought about by the LASPO Act and associated reforms -  the industry needs to adapt in order to move forward.

The report highlights a market shift where the larger specialist firms will look to grow and thrive in this environment. Yet this could be at the expense of the smaller firms who will not be able to compete without the benefits of economies of scale. In fact the report finds that “smaller and medium-sized firms are significantly more likely to have reported decreases in turnover”. One of the areas the firms will be hardest hit is in legal aid where funding is being cut right back by the government courtesy of the LASPO Act due to become law in April. The report shows that 23% of the firms included are concerned about “adapting to the changes in legal aid” and “31% of firms currently working with legal aid funded cases were considering withdrawing from one or more areas of legal aid in the next three years”.

With increasingly limited choice owing to the market shift and reduced access to justice, consumers too will suffer. Fortunately for those with BTE  legal protection an expert panel of solicitor’s firms has already been assembled by the provider. With a range of firms available according to the dispute, the customer will be well placed to protect their legal rights. At ARAG, we ensure that our panel solicitors not only have specialist subjects but are also spread far and wide across the country and we ensure service standards through our panel.

ARAG are committed to the ATE market and we are considering options for new products in light of LASPOA. Our message is that in the new legal world we will continue to support access to justice, working with panel and non-panel firms on behalf of those with BTE and supporting others along the ATE route in an environment which it appears will be less welcoming to those wishing to protect their legal rights.

Find out more about legal insurance on our website: www.arag.co.uk

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.