European Court says legal expense insurers can’t insist you use their staff – you can decide to use a lawyer
November 11, 2013
Many consumers have legal expenses cover on their home or buildings insurance but when they need legal advice, and want to choose their own solicitor, they find their insurers won't allow it. This is often never explained at the time when the insurance is taken out and, in most cases, you won't see the full policy wording until it's too late to change your mind.
The legal insurance industry is trying to keep cases away from lawyers, preferring instead to force policyholders to use their unqualified staff because they are cheaper. But there is some good news for client choice at last.
In the last few days the Court of Justice of the European Union in Luxembourg has ruled that ‘the insured person must have the freedom to choose his own lawyer or other person appropriately qualified under national law for the purpose of any judicial or administrative proceedings… the insured person’s right to choose his lawyer cannot be restricted to situations in which the insurer decides that recourse should be had to an external lawyer…”
The case in question concerned a long-running saga over the Dutch consumer’s right to choose a lawyer. The court refused to uphold restrictions in an insurance contract which required the policyholder to use the insurance company’s own unqualified staff instead of an experienced and qualified lawyer.
Mr Sneller had been dismissed from his job, and wanted to bring an unfair dismissal claim using his legal expenses insurance. The insurance contract provided that the insurer’s own staff were to deal with cases, and only ‘if, according to the contract or in their opinion, a case must be delegated to external counsel, the insured person had the right to instruct a lawyer or legal practitioner of his own choosing’. The insurance company argued that his case didn't require a lawyer because legal assistance was not compulsory in the Netherlands for unfair dismissal proceedings. (It is not compulsory in England and Wales either).
Mr Sneller didn't give up even when a court in Amsterdam found in favour or his insurers or when the Court of Appeal of Amsterdam agreed. However, the Supreme Court referred questions of law to the European Court of Justice.
The relevant law is article 4(1)(a) of Directive 87/344 which requires any contract of legal expenses insurance to expressly recognise that:
(a) where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person’.
The European Court then confirmed that the consumer has the right to choose his solicitor, even if the policy expressly states otherwise.
This case is particularly important now, as since 1st April 2013, consumers can no longer to recover the cost of an "after the event" insurance premium from an unsuccessful opponent in personal injury litigation. If you already have legal expenses insurance and want to choose a lawyer who has the right experience or is local to you, your insurers cannot insist that their staff should run the case for you instead. You are entitled to proper legal representation by qualified and experienced solicitors.
The information contained in this article is intended for general guidance only. It provides useful information but it is not a substitute for obtaining legal advice as the articles do not take into account specific circumstances. So do please Contact US for legal advice on the issues raised.