The High Court has recently held that before-the-event (BTE) legal expenses insurers cannot reject a policyholder’s choice of a non-panel solicitor on the sole basis of cost.
The decision in (1) Christine Brown-Quinn (2) Webster Dixon LLP v (1) Equity Syndicate Management Ltd (2) Motorplus Ltd; Webster Dixon LLP v (1) Equity Syndicate Management Ltd (2) ACM ULR Ltd; (1) Janine Baxter (2) Webster Dixon Ltd v (1) Equity Syndicate Management (2) Motorplus Ltd [2011] EWHC 2661 (Comm) concerns three clients who wished to bring or continue proceedings under a commonly available BTE insurance policy.
One client instructed a non-panel firm from the onset of the case while the other two had their instructions transferred to a non-solicitor firm. In each case the insurers said that they were entitled, if a client instructed a non-panel firm, to insist that the solicitor they chose to instruct must not charge more than the rates prescribed in their terms of appointment for non-panel solicitors. The hourly rate was £125 but two of the clients instructed solicitors who charged £139. The insurers disputed these rates and informed the firm they would not agree to them acting. The firm continued to act for the three clients for what they considered to be reasonable rates.
The decision on 21 October 2011 in the High Court stated that BTE insurers were not entitled to reject an insured’s choice of solicitors under the policy on the basis that their rates were in excess of those in the insurers terms of appointment. The fees of solicitors who had not agreed to the prescribed rates should be assessed pursuant to the Civil Procedure Rules, not restricted by those rates but taking account of them. The defendants have been granted leave to appeal to the Court of Appeal
This case raised an important issue in relation to freedom of choice under the Insurance Companies (Legal Expense Insurance) Regulations 1990 (the Regulations) which were enacted under section 2(2) of the European Communities Act 1972 with the intention of implementing the Legal Expense Insurance Directive (87/344/EEC) .
This decision supported the view of the Law Society that insurers should not be able to impose terms on non-panel solicitors that in effect deny a client the right to instruct a solicitor of their choosing under the terms of a legal expense insurance.
If you would like Griffin Law to represent you in any dispute, whether under a BTE policy or otherwise, please contact Donal Blaney at justice@griffinlaw.co.uk.
