When we receive a quote for motor or home contents insurance, it will very often include a sum of about £20 for legal expense insurance (LEI) and on motor policies, it usually only covers personal injury claims arising out of a road accident while using the insured vehicle. It is not uncommon for the insured to be unaware they have paid for this cover, and even if they are aware, they do not know what the benefits are.

For personal injury claims it is arguably of no benefit at all as conditional fee agreements (CFAs, otherwise known as no win no fee) provide equal if not better cover and are now offered by all solicitors who regularly do personal injury work. LEI cover is normally limited to £50,000 or sometimes less and has to cover both the defendant’s and the claimant’s costs should the claim be unsuccessful. In large complex cases this is rarely enough to see the matter to a conclusion and if the cover runs out, it becomes necessary to switch to a CFA part way through which can give rise to complications.

While of course the case must have reasonable prospects of success to be offered a CFA, equally, if the case looks difficult, despite having LEI, the insurance company can still refuse to back the case. There is no cost to the claimant to enter a CFA and although it may be said that £20 is not much to pay, it is difficult to justify where there is no advantage to the insured.

Some LEI policies extend to other areas of law such as employment where CFAs are not available, but this may not be something the insured would need. The insurance industry are keen to add these policies to the overall cover as they add up to a considerable revenue flow when spread across the country. While they may suit some, it is worth checking precisely what the policy covers and if it is just personal injury claims, you would be better off keeping your £20.

For further information on this or any other personal injury/ clinical negligence issue please contact David Greenhalgh on 01689 887806 or email david.greenhalgh@cwj.co.uk