Leading legal expenses insurer ARAG has expressed its disappointment with the Law Society survey on before-the-event insurance, and suggested that the drive may be to aid law firms not on insurers’ panels.
He also revealed that there have been talks over creating on agreement to deal with non-panel firms acting for policyholders.
Last month the society launched its survey by expressing concerns about the extent to which BTE providers allow policyholders freedom of choice when selecting a solicitor.
Paul Upton, head of claims at ARAG, said the company was “very surprised” at both the timing and content of the survey.
Recent cases in the Court of Appeal and European Court of Justice have “reinforced already firmly established rules of what is allowed and what isn’t when it comes to policyholders’ rights to choose their own solicitors and an insurer’s liability for lawyers’ costs,” he noted. “Essentially, nothing has changed.”
He said: “At ARAG we have a substantial solicitor panel with no in-house handling carried out. We do not own an alternative business structure and have no intention of competing with solicitors.
“With this in mind ARAG, together with other legal expenses insurance providers, have engaged with the Law Society over recent years to find common ground and a positive way forward with solicitors. Most recently, at the end of last year, discussions focused on establishing a non-panel solicitor agreement, to ensure consistency and fairness when a non-panel solicitor is engaged.
“We were disappointed to see the Law Society take such a negative stance on LEI, particularly considering that the survey is very unlikely to yield anything new in the way of solicitor opinions on freedom of choice.
“The rights of the customer are always our primary concern and there is no evidence to support the notion that reputable LEI providers are routinely or even occasionally, unfairly denying policyholders their rights in this area.”
Mr Upton said ARAG considered the survey to be “one-sided, almost to the point of being misleading”.
ARAG fully accepted that policyholders must not have claims ‘shoehorned’ to inappropriate lawyers, he said.
“Provided an appropriate lawyer is appointed, however, it remains to be shown what detriment there is to the client in having a panel solicitor appointed. Our experience shows time and time again that panel lawyers have better success rates than non-panel firms, but at a much lower cost. Both outcomes are of course beneficial to policyholders in direct and indirect ways.
“We would therefore question whether, at the heart of the survey, the intention is to serve the interests of the client – which of course remains a solicitor’s overriding duty – or rather members of the legal profession that do not happen to be on an insurer’s panel.”