If you have the benefit of legal expenses insurance there is no requirement got you to continue to instruct a firm of Solicitors that have been appointed on your behalf by your legal expenses insurer.
Once you have commenced your claim your insurer can no longer insist that you can only instruct a Solicitor of your choice if they first agree to the insurer’s stipulated hourly rates which are often substantially lower than their private rates. The High Court has recently decided that such a practice amounts to a fetter on your freedom to instruct a Solicitor of your choosing.
However, your insurer will only be required to pay the reasonable legal fees of a Solicitor you choose to instruct and your Solicitor’s costs will be considered at the end of the case to see whether the legal fees charged were reasonably incurred. Factors to be taken into account will include:
- the availability of other non – panel firms prepared to act on lower rates as stipulated by your insurers;
- the location of the Solicitor you wish to instruct and the typical charge out rates for that region;
- the complexity of your claim;
- the specialism of the firm you wish to instruct;
- how important the claim is to you; and
- the nature of work to be carried out and whether the work needs to be carried out by a more senior solicitor.
It is likely that before accepting any instruction your chosen Solicitor will seek to agree an hourly rate with your insurers taking into account the above factors in order to keep you fully updated on your legal costs bearing in mind that your costs will be subject to an insurance indemnity.
This is undoubtedly great news for you if you already have the benefit of legal expenses insurance and wish to instruct a legal firm which is closer to where you live, has more extensive experience in the area of law relevant to your dispute or with whom you have dealt with previously. However, the downside is likely to be that Insurers will inevitably drive up premiums in an attempt to recover the larger bills that they will soon have to start paying.
Should you wish to discuss further or if you have an employment tribunal claim that is currently being funded by legal expenses insurance and you wish to transfer the matter to us, please contact David Johnson.
For full details of the Judgement please see: Christine Brown – Quinn and Webster Dixon v Equity Syndicate Management and ACM ULR Ltd [2011] EWHC 2661