I was very interested to note that this week, watchdog Consumer Focus, has openly called for an overhaul of legal expenses insurance (LEI), highlighting that many people are unaware of what it covers, or have difficulty using it.
LEI gives people access to legal advice in many types of cases, such as employment disputed personal injuries, inheritance disputes, and consumer disputes. However, Consumer Focus said that the details of policies were "opaque" with people often unaware of what they had signed up to.
Legal expenses insurance, which is a £450m per year market in the UK, is often sold as part of a bundle with home or car insurance. It usually costs as little as between £13 and £24 a year. Given that costs of civil legal cases can run into the thousands of pounds, this is sometimes a worthwhile cost.
Many people have already been given access to justice as a result of having this cover. As it becomes more and more difficult to obtain Legal Aid for clients, due to cuts by the government, such an overhaul could be a welcome sigh of relief for many consumers.
The government has announced plans to cut the £2bn annual legal aid bill by £350m a year by 2015, and this is likely to reduce the number of civil legal aid cases by 500,000. The effects are already being felt in many areas of the profession, and consumers are being left without access to justice.
However, Consumer Focus have argued that many people may be unaware of the exact details of legal expenses insurance cover, or that they even had it. They also want consumers to be given greater freedom to choose their own solicitor, rather than having one appointed by the insurer. This is a good move in my experience, the majority of clients who contact us want a local lawyer to represent them in their dispute, and are usually disappointed if they have to deal with an insurance appointed solicitor who might be based hundreds of miles away. Most clients want to have that face-to-face communication with their solicitor, particularly if there are complex legal issues to understand.