Picture the scene. You’ve been injured a mile from your house in a road accident. Fortunately, your injury isn’t life-threatening. However, it’s still painful and upsetting – perhaps a broken leg, or a badly damaged arm. The accident wasn’t your fault and, naturally enough, you’d like to make a claim for compensation. With a sigh of relief – for everyone knows that lawyers can cost a small fortune – you remember that your standard household policy also provides legal expenses insurance (LEI). Once back home, you dig out the policy and make a claim.
So far, so good. But then, a little later, you receive word from the insurance company that a firm of solicitors you’ve never heard of has been appointed to handle your claim. Worse, they’re at the other end of the country. They won’t be rushing down to see you to take instructions. If you want to go and see them, fine, but it’s hardly practical. You’ll have to accept that your relationship with them will be entirely over the phone and via correspondence.
You might not mind this, but many people do – especially if their accident isn’t straightforward. In such cases, local knowledge can be vital, but even if it isn’t the fact is that when people go through the trauma of an accident they often like to know the solicitor who handles their claim (or, at least, be able to get to know him or her). Their case, then, takes on a human dimension, rather than appearing as a statistic on a conveyor belt.
Regrettably, what ought to be a basic human right – to instruct the solicitor of one’s choice – is not as straightforward as it should be in Britain. A European Council directive (Directive 87/344, to be precise) provides that insurance contracts providing LEI should allow the insured a lawyer of their choice “from the moment that he has the right to claim from his insurer under the policy”. The Directive was tested in the European Court of Justice (ECJ) some two years ago, via the case of Austrian citizen Erhard Eschig (ECJ Case C-199/08). Eschig instructed the law firm Salpius Rechtsanwalts GmbH to represent him in several financial misselling claims. He sought confirmation from his insurer, Uniqa, that his legal costs would be met. Uniqa refused, stating that ‘mass claims’ (Eschig’s was one of many) would only be covered if handled by law firms on its panel.
Eschig complained. He challenged Uniqa, and the ECJ upheld his claim. It ruled that Uniqa’s purported limitation of the policy to mass claims was in breach of Directive 87/344.
As with so many European Directives, uncertainty as to their application in Britain prevails – irrespective of Mr Eschig’s claim. Here, the relevant law is contained in The Insurance Companies (Legal Expenses Insurance) Regulations 1990, which state:
6.—(1) Where under a legal expenses insurance contract recourse is had to a lawyer (or other person having such qualifications as may be necessary) to defend, represent or serve the interests of the insured in any inquiry or proceedings, the insured shall be free to choose that lawyer (or other person).
(2) The insured shall also be free to choose a lawyer (or other person having such qualifications as may be necessary) to serve his interests whenever a conflict of interests arises.
(3) The above rights shall be expressly recognised in the policy.
That seems crystal clear, but the practical reality is different. As many of us engaged in solicitor panel work know, insurers habitually work with panels of law firms, farming out work to their chosen panel where a key component in their choice is price. Claims will routinely be handled by lawyers who live and work miles from the victim’s abode or place where the accident occurred. Moreover, the Regulations stipulate that the freedom of choice arises in connection with “any inquiry or proceedings” – in other words, only when litigation is formally being contemplated. This is not in the spirit of Directive 87/344, which is not so restrictive.
The freedom of choice to instruct a solicitor is a basic human right. It’s a bit like supporting a football club. Some people may decry the fact that I choose to go and watch Chelsea (and after the home defeat by Aston Villa over the festive period, I lamented my decision, too) but no one can stop me from supporting the team of my choice. Similarly, no one should be able to prevent an accident victim instructing the solicitor with whom he or she feels most comfortable. If that’s the family firm, or the high street sole practitioner who’s been in the town for years, then so be it. The small print in LEI should have nothing to do with basic freedom of choice.
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