What Is Legal Expenses Insurance?

emily gordon brown
Emily Gordon BrownLegal Assessment Specialist @ Lawhive
Updated on 19th December 2023

Lots of people in the UK have a kind of insurance that might help with legal costs for common problems. Surprisingly, however, not a lot of people know about it. It’s very likely that when a solicitor starts working on a case they will ask the client if they have legal expenses insurance cover and the most common answer is, “I have no idea!” 

legal-expenses-insurance

In this article, we’ll dive into what legal expenses insurance (LEI) is and how you may be able to use it to handle your legal costs, such as solicitor's fees if you need to. 

Legal expenses insurance offers access to a helpline for legal advice and can help cover your legal expenses if your case ends up in court. Generally, this type of insurance covers everyday problems like:

Legal expenses insurance is a reasonable way for individuals, drivers, and business owners to have access to legal support when it’s needed. It’s a practical option that could make sure you’re covered in legal matters without breaking the bank. 

Legal expenses insurance is usually offered as an optional extra when you buy an insurance policy. Or, in some cases, it might be included in some standard insurance packages. 

It’s commonly found in policies for home contents insurance, building insurance, car insurance, and motorbike insurance. 

Some people have legal expenses insurance as part of another product, or even as a benefit of their employment. If you are unsure whether or not you have legal expenses insurance, it’s a good idea to take a look at your current insurance policies, employment contracts, or the terms and conditions of packaged products. You may be in for a pleasant surprise! 

Legal expenses insurance can cover a range of costs incurred in a legal dispute, whether it’s made against you or by you.

Cover is dependent on the provider of the insurance and should be detailed in the policy document. In some cases, legal expenses insurance policies can extend to significant expenses associated with professional fees in various situations such as personal injury, property, employment, and contracts. 

As we’ve mentioned, legal expenses cover can differ among providers, and there may be certain situations it doesn’t cover. These might include: 

  • Legal disputes that arise before the policy was purchased; 

  • Legal costs incurred before your claim is accepted; 

  • Claims with less than a 51% likelihood of success; 

  • Anything explicitly excluded, as outlined in the policy paperwork. 

If you have legal expenses insurance and you aren’t sure of the coverage, you should ask your insurance provider, they are best placed to give you clarity on your specific circumstances. 

Usually, policyholders have the freedom to select their solicitor when legal proceedings become necessary, generally after negotiations fail. While policyholders often start with the insurer’s panel solicitor, some may prefer to find a solicitor near them from the beginning for various reasons, like location or personal preferences. 

It’s important to note that the chosen solicitor isn’t bound by the insurance policy terms. When a policyholder appoints their solicitor, it’s a separate contract between them and the solicitor. However, the insurer may have standard terms that the policyholder’s solicitor needs to agree to, which would be established in a separate contract between them. 

Policyholders can also choose their solicitor over an appointed solicitor when there’s a genuine conflict of interest. For example, if a solicitor has previously represented the policyholder’s opponent or they have access to confidential opponent information. Disagreements on legal advice or strategy, however, are not generally viewed as conflicts of interest. 

Legal expenses insurance is usually sold as an add-on alongside other insurance products, like home or car insurance. Although the cost can vary widely between providers, you might expect to pay anywhere between £15 and £70 per year depending on the policy. 

Legal expenses insurance could be a lifesaver if you find yourself in a court situation or need to take legal action against someone else. It’s not uncommon for legal fees to add up quickly. Having this coverage can make sure you’re protected and save you from hefty legal expenses down the road. 

That being said, considering legal expenses insurance is often included as an add-on to other policies, you should take steps to understand exactly what it covers before signing on the dotted line and parting with your hard-earned cash.

Some people discover that some aspects they assumed were exclusive to legal expenses insurance are already covered in their standard insurance policy. Therefore, it’s important to make an informed decision based on your needs, avoiding duplications and unnecessary expenses. 

It’s also worth remembering that some workplaces offer such services as employee benefits, so it’s a good idea to check so you can make the most of what you already have if that’s the case.

Conclusion

Research shows that an estimated 3.6 million people have an unmet legal need involving a dispute each year, and few consumers can meet unexpected legal costs from disposable income. Therefore it’s important to bridge the gap between the potential benefit of legal expenses insurance and consumers’ understanding of it to widen access to legal advice and address unmet legal needs. 

Here at Lawhive, we’re committed to helping individuals in England and Wales access legal help that’s timely and affordable. If you’re looking to start legal proceedings or a claim has been made against you, get a free case assessment and fixed-fee quote from our legal assessment team today to find out how our solicitors may be able to help you. 

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