In the 1990s there was a plethora of companies offering legal expenses insurance (LEI) either in stand alone policies or as add-ons to other insurance policies. The LEI companies would cover a variety of case types ranging from motor accidents to clinical negligence. Some offered representation at Court in criminal matters. Insurance companies did cosy deals with solicitors as to rates of charge (if at all) and the insurers worked very hard to make their insured use the solicitors that they the insurers had chosen.

One of the main reasons for having LEI was not that it benefited the insured. If it had been then the insurers would have made more of a fuss about it being there but most people did not even know that it was there so it was seldom used.

In the late 1990s the advent of Conditional Fee Agreements (NO win no fee to the uninitiated !) meant that there was a need for some form of insurance cover to deal  with the costs if someone lost on a CFA. If you win on a CFA at Court then everything is fine but if you lose although you do not pay your solicitor’s fees you do have to pay the other side’s fees. Unless there is a policy of insurance in place then you would be a lot worse off than when you started.

This need for an insurance product saw the birth of After the Event Insurance (ATE). The reason it is called ATE is of course because it is insuring the fees of something that has already happened. These ATE policies cover all manner of claims from contractual disputes to motor accidents to clinical and professional negligence. Before you can use an ATE policy you have to be sure that there is no LEI in place or at least make sure that you have considered it. If you have considered it and then you don’t want to use it you are free to use an ATE product.

It is at this point that we ask well “what is the point now of LEI?” Some would say that if the claim is borderline that an ATE policy will not support it. Well LEI insurers are not keen on borderline cases either!

It is the view of the writer that there is practically nothing that you gain from having LEI except that some policies cover you for employment advice whereas an ATE policy would not. ATE policies allow more flexibility to the solicitor dealing with the case and less red tape. Cases with ATE are on a CFA and therefore are more profitable for the solicitor and more easy to deal with.

The next time your insurer asks you do you want LEI or the comparison site asks you do you want LEI perhaps the matter needs some thought. You may be putting yourself in a poorer position by saying yes that saying no.

If you would like to discuss making a personal injury claim call St Helens Law on 01744 454433 or contact us through our website.