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Title: Is legal expenses insurance worth it?

Date: 28 March 2014

Q. A couple of months ago I had an accident while filtering. My bike was written off and I broke my shoulder and wrist. My insurance company put me on to a solicitor so I could make a claim and things seemed to be going fine or so I thought. I am now being told that the other side are disputing liability and that my legal expense insurance, which I thought was paying for everything won’t cover them to carry on fighting my claim. Is my legal expense insurance worth anything?
Richie, Hereford

A. Unfortunately the type of legal expense insurance which comes with bike insurance is often worth very little in reality and the relationship between legal expense insurers and insurance company panel solicitors is a murky one. Historically it has been used as little more than a way of generating referral fees for the insurance company though those arrangements have recently been made illegal.

Because of the reason they were set up, rather than to provide an actual benefit, the cover that they give is extremely limited. The most common misconception is that the policy is there to pay for a solicitor to act on your behalf. They don’t. The panel solicitor usually has to work on a no-win, no-fee basis and they will only take it on as long as they think that your case enjoys good prospects of success. The legal expenses insurer who will also need to be convinced that you are going to win will then only cover some very minor disbursements such as obtaining a GP or engineering report and if court action is needed, you are usually required to pay for a top-up insurance policy at your own expense.

It is important to also be aware that if at any time the legal expense insurer doesn’t think you are going to win your claim, or beat an offer made by the defendant, they can stop funding those external costs and if the panel solicitor no longer thinks you are going to win they can simply terminate the no-win, no fee agreement leaving you with no solicitor and at risk of paying significant costs to the other side.

This can be a particular issue for bikers in filtering accidents because panel solicitors are rarely bike specialists and as such they often mistake filtering for overtaking and end up terminating a claim that should win.

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