Legal expenses insurance – The Financial Regulators Complaints Commissioner

freebiequeen

I'm posting to see if others have had similar negative experiences with legal expenses insurance (also called before-the-event legal insurance).

I've complained to the FCA and then to the FRC Commissioner about how poorly this market is regulated. My complaint was not upheld, but I'm convinced the system is not protecting the consumer.

In my experience, this insurance doesn't operate like insurance at all. It functions as a referral to a panel solicitor who operates exactly like a No Win No Fee firm. Cover is only provided if the solicitor sees a commercial benefit in taking the case. If the claim is low value, or simply not profitable enough, the policyholder gets nothing, despite having paid his/her premiums.

I've experienced this multiple times. On one occasion, Irwin Mitchell explicitly told me they would not take my case because it was worth less than £10,000. I ended up handling it myself and secured compensation. On another, my policy stated I could choose my own solicitor for an inquest, yet I was given no choice at all. In fact, cover was declined.

There are no safeguards. If a panel solicitor says ‘no’, the Financial Ombudsman Service will seldom look behind that decision. Meanwhile, complex clinical negligence claims are often assessed by non-medically qualified staff without any expert medical input, which seems fundamentally unfair.

I've raised all of this with both regulators, but my concerns were dismissed.

I'd really like to hear from anyone else who has:

• Unreasonably been refused cover by a panel solicitor
• Been told their claim was too low value to pursue
• Felt the panel solicitor was biased against providing cover
• Paid for a policy that promised support but delivered nothing

Please share your experiences below, as I'm trying to understand how widespread this is.

etienneg

Have you actually read - carefully - your policy, and are you sure that none of your points is addressed? For example, do you really expect the policy to pay for a lawyer to represent you in bringing a case that is unlikely to succeed, or to produce less compensation than it costs to pursue it?

Personally, I don't think the cover on offer for legal expenses insurance is worth the premium charged, so my response is not to take it. Of course, you are free to make a different choice from me. But what you can't do is to take it and then complain that it doesn't provide the cover that you would have liked!

eskbanker

I've complained to the FCA and then to the FRC Commissioner about how poorly this market is regulated. My complaint was not upheld, but I'm convinced the system is not protecting the consumer.

[…]

I've raised all of this with both regulators, but my concerns were dismissed.

Are you able and willing to share the explanations given?

Okell

https://forums.moneysavingexpert.com/discussion/comment/81944934#Comment_81944934

"… Personally, I don't think the cover on offer for legal expenses insurance is worth the premium charged, so my response is not to take it…"

This ^

freebiequeen

https://forums.moneysavingexpert.com/discussion/comment/81944943#Comment_81944943

The regulator’s view is that isolated consumer experiences do not amount to evidence of a broken system.

freebiequeen

https://forums.moneysavingexpert.com/discussion/comment/81944934#Comment_81944934

I'm raising concerns about whether legal expenses insurance is functioning as insurance at all, or whether it is effectively a referral service to solicitors who will only act if there is profit in it for them. If that is the case, then consumers are being sold a product that does not deliver what it promises.

I take your point that people can simply choose not to buy this insurance. But I think it's still worth asking whether the product is being mis-sold and whether the regulators are doing enough to oversee it. That is what I've tried to raise with the FCA and the FRC.

Thanks again for engaging – I do appreciate hearing different perspectives.

Okell

https://forums.moneysavingexpert.com/discussion/comment/81945025#Comment_81945025

Can you clarify your point as this isn't an area i have any expertise in.

Are you saying that because it is sold as an "insurance" product then anyone who buys it ought to be able to claim against it for any legal expenses they might incur no matter how hopeless or without merit their case might be?

I'm not sure exactly what you are complaining about so it might be helpful to spell it out clearly without assumomh that readers here know what you mean.

(By the way, I'm not necessarily disagreeing with you but i would like to know exactly what your complaint is based on)

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81945020#Comment_81945020

That view sounds reasonable in itself, if you were unable to convince them that your concerns related to a broken system rather than isolated personal experiences?

I'm raising concerns about whether legal expenses insurance is functioning as insurance at all, or whether it is effectively a referral service to solicitors who will only act if there is profit in it for them. If that is the case, then consumers are being sold a product that does not deliver what it promises.

Does it actually promise that such legal services definitely will be provided (without any qualifying criteria) or simply that if they are then the costs will be covered?

freebiequeen

https://forums.moneysavingexpert.com/discussion/comment/81945299#Comment_81945299

My concern is not that there are qualifying criteria, (of course there are), but that claims for indemnity are being refused due to panel solicitors acting in their own commercial interests. In my view, there is no independent oversight to check that the consumer is not being misled. In other words, my legal costs insurance is not providing me with a benefit that I do not already possess – even without it, I could simply pick up the telephone and contact a no win no fee solicitor myself, free of charge.

My aim with this thread is to hear from others who have had similar experiences with legal expenses insurance.

If anyone reading has actually tried to claim on their legal expenses insurance and been left feeling disappointed and let down, I'd like to hear from you.

eskbanker

In other words, my legal costs insurance is not providing me with a benefit that I do not already possess – even without it, I could simply pick up the telephone and contact a no win no fee solicitor myself, free of charge.

But surely that's not a like-for-like comparison - if engaging with a NWNF outfit, they'll also be selective about which cases they'll take on and will of course take their fee from the proceeds?

Anyway, as you say, nobody has yet come forward with personal experience of such denied claim frustrations, so further discussion would remain abstract until then!

born_again

My aim with this thread is to hear from others who have had similar experiences with legal expenses insurance.

If anyone reading has actually tried to claim on their legal expenses insurance and been left feeling disappointed and let down, I'd like to hear from you.

Would have better in the insurance section.🤷‍♀️