Home Insurance - Legal Cover Open To Abuse By Insurer

FoordyAnn

Hi

We’ve paid Legal Cover on our home insurance for approx 15 years without ever making a claim.

At the end of last year, we started an Employment Dispute claim through our own Solicitor and made a claim through our insurers to cover our Solicitors fees. 

Fast forward 10 months and our insurance company said that we didn’t have a greater than 51% of winning our case and as such, wouldn’t cover our solicitors fees. We have been disputing this from day one and are continuing to demand our fees are paid

We have now agreed to settle out of court, with our opposition proposing the settlement out of court. 

Even though we have won our case, the insurance company are still unwilling to cover our Solicitors fees by saying that we didn’t have a greater than 51% chance of success at the outset. 

Is this something you can advise on and help us reverse the insurance companies decision as their opinion was incorrect?

If the decision to cover Solicitors fees is dependent on the Insurance Companies opinion, there is a good chance they will never pay out! So what’s the point of paying for Legal Cover?

Regard
Glenn

Weighty1

Their opinion was not incorrect.  The end result is irrelevant.  If they didn't believe that you had a greater than 51% chance of wining then they wouldn't have engaged.  It sounds like you started proceedings before clarifying their stance on whether they would support the claim.  And the decision isn't dependent on the insurance companies opinion, it is dependent on the solicitors opinion.  The purpose of paying for Legal Cover is to avoid legal costs when there is a higher than average likelihood that you would win, NOT just because you want to claim against a third party.  If they allowed that the solicitors would be inundated with spurious claims which would go nowhere.

FoordyAnn

It’s all about opinions, our independent solicitor believed we had a greater than 55% chance of success - our insurance company solicitor believed we had less than 51% chance of success. If it’s always based on the opinion of the insurance company solicitor, they can always say it’s less than 51% to avoid paying costs. Hence, what’s the point of paying for legal cover if they are never going to say it’s greater than 51% chance of success. 

Old_Lifer

A large insurer will have a whole department dealing with legal matters.   They will have solicitors  and barristers on the payroll. They will be dealing with a large  volume of cases and will know from experience which cases have a good chance of success and which don't.     Presumably it was settled out of court to avoid the matter dragging on and on  and to avoid rising costs.

It seems the insurer did not agree to fund the case  but you went ahead anyway and incurred costs.   It would appear that now you have to pay those costs you are saying that you disputed the insurers decision 'from day one' .   However, if you appealed the decision at the start and the insurer still refused to fund the case  you must surely have known that  you would have to pay your own legal costs.

Sadly,  I cannot see any point in complaining.

unforeseen

If it was settled out of court then you have not won. 
Their decision was based on your chances of winning in court. As you didn't go there and they never accepted the case then all costs are up to you. They still consider that you wouldn't have had a 51% chance if it had gone to court

jonesMUFCforever

IMO Legal insurance cover does not cover solicitors cost.
The policy I have states that I must engage with my insurer first who will tell me whether they will take the case on and what will be covered and what will not.
You can't start a case with a firm of solicitors and then expect your insurance to pick up the tab.

MovingForwards

jonesMUFCforever said:

IMO Legal insurance cover does not cover solicitors cost.
The policy I have states that I must engage with my insurer first who will tell me whether they will take the case on and what will be covered and what will not.
You can't start a case with a firm of solicitors and then expect your insurance to pick up the tab.

They also don't pick up cases which were started before contacting them.

By OP seeing their own solicitor, they lost the benefit of them at that point, regardless of what the solicitors thought the odds were.

davidmcn

FoordyAnn said:

If it’s always based on the opinion of the insurance company solicitor, they can always say it’s less than 51% to avoid paying costs. Hence, what’s the point of paying for legal cover if they are never going to say it’s greater than 51% chance of success. 

And do they always say that? Or is the only evidence you're going on that they've said it in your case?

Sandtree

Ultimately it is the same as any other insurance claim dispute... log a complaint and if you are not happy with the outcome then take the matter to the Financial Ombudsman for review.

Legal expenses insurance has a lot of caveats written into it, its useful for the purposes of the legal expenses helpline to give you general advice but for actually covering costs its fairly poor product outside of the basic slip & trip type claim.  Not only have you got to pass the 51% probability of success but you have to also show that costs are proportional to the claim (they wont pay £10k in solicitor fees to try and get you £600 in compensation).  Finally if you get through those hoops you'll then have the arguments of using off panel solicitors - fees are often capped to what they pay panel solicitors which is a tiny fraction of the going rate because they spend many millions each year.

Jumblebumble

FoordyAnn said:

It’s all about opinions, our independent solicitor believed we had a greater than 55% chance of success - our insurance company solicitor believed we had less than 51% chance of success. If it’s always based on the opinion of the insurance company solicitor, they can always say it’s less than 51% to avoid paying costs. Hence, what’s the point of paying for legal cover if they are never going to say it’s greater than 51% chance of success. 

Your insurers are not really likely to be interested in what your independent solicitor thinks about the chances of success 

csgohan4

I wonder if this would be different if OP had third party legal insurance outside of home insurance? I know Memonline has been mentioned on here before in the past