The value of BTE LEI has just increased by a few £ms

The Government has published its response to its consultation on enhanced fees for possession claims and general applications in civil proceedings, and further fee proposals.   http://bit.ly/1RTMMQV

The Government says it has considered all of the responses to the consultation very carefully. Despite the majority of respondents disagreeing with proposals to increase civil court fees and introduce first tier tribunal fees the Government  has decided to proceed with most of the proposals for fee increases set out in the consultation. The Government wishes to ease the burden on the taxpayer and bring down the deficit and while recognising that the increases may make some litigants reconsider whether they wish to pursue litigation in light of the cost and the prospects of success, including the likelihood of recovering a judgement against the respondent it does not overall believe that the proposed fee increases will prevent people from bringing proceedings. The increased fees are expected to generate £15m per annum once parliamentary time allows for the statutory instruments to be passed..

In particular our landlord policyholders who may need to seek repossession and others wishing to pursuing money claims should  benefit from enhanced value from their LEI covers.

Clarifying the rules on unbreakable bundles

FCA Policy Statement 15/22.  General Insurance Add-Ons Market Study – Remedies: banning opt-out selling across financial services and supporting informed decision-making for add-on buyers

Readers will appreciate that as a General Managing Agent it is beyond our remit to interpret the FCA's add-on remedies policy statement 15/22 (PS15/22) on behalf of our agents. The document sets out:

• rules and handbook guidance in relation to the FCA's ban on opt- out selling of add-on insurance effective from 1 April 2016;
• non-handbook guidance on giving appropriate and timely information when selling add-on insurances so that customers can make an informed decision.  The non-handbook guidance applies immediately and the FCA expects firms to have made the necessary changes to their sales journey by 30 September 2016.

This Blog provides our comments on PS15/22 with regard to the opt-out selling ban of add-on insurance as we have witnessed some confusion about the new rules.

We have received queries from insurers and brokers who are concerned about compliance advice they have been given.  In particular firms are being advised that "auto- embedding"  of covers such as legal expenses and assistance services insurance within a primary insurance product – such as home buildings  or contents policies is caught by the FCA ban.  The FCA refers to this practice as "bundling".

While we cannot give compliance advice, it may help to highlight what the FCA has said in PS15/22.

PS15/22 paragraph 2.4 sets the scene by referring to an “optional  additional product". This leads to an early inference that the ban is not intended to apply to covers that are always automatically included within a primary product.

Paragraph 2.10 describes the scope of the remedy, "this remedy would apply to any add-on product when it is sold alongside a regulated financial primary product…….This means that add-ons such as title insurance sold in addition to a mortgage would be covered, as would warranty cover sold in addition to home emergency insurance".  This description is clearly with odds with the position where additional cover is provided as a feature that is integrated into a primary product.

The FCA helpfully devotes paragraphs 2.16 and 2.17 to clarifying that because there is no optionality in an "unbreakable bundle" – the customer buys the whole of or none of the features – "the ban on opt out selling will not apply".  They go on to assert that the ban will apply where a menu of covers is available for the customer to select from.  While acknowledging that "unbreakable bundles can reduce customer choice, in the sense that the customer is unable to tailor the bundle to their individual needs (the FCA) does not believe the ban on opt-out selling is the appropriate way to address this."

In conclusion the effect of 2.16 and 2.17 allows LEI, Home Emergency or other products that may formerly have been offered to customer as an add-on to a primary insurance product to be integrated into it.  An example would be an unbreakable bundle that provides home buildings, home contents, accidental damage cover, annual travel and legal expenses insurance. 

We would say that including legal expenses and assistance services as an integral policy feature by "auto-embedding" cover makes more sense at this time than ever before. The alternative "opt-in" method of sale risks individuals missing out on valuable insurance protection.

Ministrial statement on criminal court charges

Due to concerns raised by the Justice Select Committee Michael Gove has made a written ministerial statement (https://www.gov.uk/government/speeches/courts) announcing that the criminal courts charge shall be quashed from Dec 24 pending a further review of how courts take money from offenders ( including fines, the victim surcharge, compensation orders, prosecution costs and the Criminal Courts Charge).

The Lord Chancellor’s reaction is refreshingly responsive in a positive way.

We can only speculate regarding how he may respond to the review of Employment Tribunal Fees.


We wonder whether he will listen and do the right thing by reconsidering the level of fees ?

Simply the best: Three more awards confirm ARAG's premier credentials

Specialist insurer ARAG has once again demonstrated the high regard in which it is held by its
Votes were cast in a nationwide poll of professional insurance brokers and announced at a gala ceremony in London's Royal Garden Hotel attended by the UK's leading insurers. Now in their sixth year, the Underwriting Service Awards are unique.

They are based on large-scale objective input from UK commercial and specialist broking professionals, submitted through the annual Business Insurers Insight Study. Brokers graded the insurers they have worked with during the previous 12 months. These are some of the comments made by brokers about why they support ARAG;

“Strong support for the customer and the broker, flexible approach to writing business, access to decision makers and key contacts”

 “Flexibility, willingness to work together to create new products. Fairness.”

“Good lines of communication and regular contact from BDM. Claims handled swiftly and claims met”

“We are delighted that so many of our partner companies were either winners or shortlisted too”, comments Andy Talbot, ARAG Head of Sales. “It is very encouraging that over three years of huge turmoil in the legal services arena we continue to receive endorsement of our efforts to be the very best people to work with.

“The accolades are an outstanding tribute to everyone who has worked so hard to ensure we deliver on our promises, and in the most professional manner. As the courts system faces yet more changes, we believe ARAG is well-placed to provide affordable access to justice to everyone who has been disadvantaged by the actions of others. Our legal protection cover, emergency assistance products and advice services are available to millions of people through professional intermediaries either in addition to – or as part of – business, home, motor and landlord insurances”.


-ends-

Further information on how ARAG stays on top can be viewed in its latest newsletter at  http://anyflip.com/jhsj/zibd

Underwriting Services Awards 2015. ARAG wins...
–    Legal Expenses Team of the Year for the 3rd year running.
–    Underwriting Service Awards Team of the Year for the 2nd year running
–    Managing General Agent Team of the Year for the first time

For more information please contact:
business partners, by winning three prestigious, independent awards. At the Underwriting Service Awards the company took the Legal Expenses Team of the Year award for the third year running plus also the Managing General Agent (MGA) award and like last year, the Underwriting Service Awards Team of the Year.

- Andy Talbot, Head of Sales
0117 917 1685/ andy.talbot@arag.co.uk

- David Haynes, Head of Underwriting & Marketing
0117 917 1684 David.Haynes@arag.co.uk

- Rachael Wornes, Marketing Manager at ARAG
0117 917 1578 / pressoffice@arag.co.uk

Latest News from The Rag

Following The RAG November edition and its brand new design, we have also created its online version.

If you would like to read our articles, please click on the image below to flip through the pages.

Happy reading everyone

Yesterday in parliament…

Isn't Radio Four's (slightly satirical) "Yesterday in Parliament" great?  I catch it most mornings as it races through previous the day's debates in the House. We have put together our own report from Hansard focusing on the Justice session and how legal expenses insurance fits into the picture. 

 
Litigants in person and McKenzie Friends
Against opposition claims that the Court Service is in crisis following cuts to the justice budget and a call on Government to commission a survey of Court officials; having already spent £2 million to ensure greater support for litigants in person (such as online guidance, guidance from court officers and judicial training), the Government promised investment in a new strategy to provide more support to litigants in person.
While the Government maintains that Judges, magistrates and legal advisers are well equipped to support litigants in person through the court process... we think it can be intimidating and daunting for individuals. Where legal expenses insurance is available it must be a preferred solution. Make sure your clients opt in. 

Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPOA) Review
The opposition reminded the Secretary of State of concerns raised by the Justice Committee, the National Audit Office and others regarding litigants self-representing and urged the planned review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 to be brought forward from 2017.
Parliament heard that civil legal aid remains available for only the most serious cases, including cases in which life or liberty is at stake, there is a risk of serious physical harm, or children may be removed from their families. However, many hundreds of thousands of ordinary people no longer have access to legal advice or representation. Other than asking lawyers to do more work for free – [that is unless their case is suitable for legal expenses insurance. We are always looking at how our policies can help provide access to justice for new and additional areas of civil litigation].

McKenzie Friends
With the growth in litigants in person there has been a growth in McKenzie friends. There are two types: those who provide backgrounds to unfamiliar settings and those who act effectively as lawyers and charge for their services. The Government expressed an intention to "keep an eye on advice and fees are being charged. [We see Mckenzie Friends as a potential area for concern. Our policyholders are represented by a qualified professional lawyer and we keep an eye on our panel firms to ensure they continue to deliver the high quality service we insist on.]

Criminal Courts Charge
The introduction of this charge has made it possible to recover some of the costs from offenders, which reduces the burden on taxpayers. The Government is keeping the operation of the criminal courts charge under review.
The opposition however was concerned about disturbing case studies highlighted by campaigners showing that this charge is putting pressure on people to plead guilty in order to avoid legal costs, thereby restricting access to a free trial. There are further worries that bailiffs will chase debts that will simply be written off and never collected. 
The Government had expected criminal charges to raise £265million however the Chair of the Justice Committee told the BBC that, as well as distorting the criminal justice system for most defendants and sentences, it may well run at a loss. The Secretary for State was urged to scrap the charge. [Against a background of changes to means testing and cost recovery for criminal cases we introduced our comprehensive Family Prosecution Defence policy. The policy will not pay criminal changes however it will afford defendants a professional legal defence].