Legal Expenses Insurance 

What is Legal Expenses Insurance?

Legal Expenses Insurance (LEI) is designed to protect you from the potential costs and risks associated with either pursuing or defending a legal action. If you did not have legal expenses insurance, you could find yourself liable for the costs and expenses of both your own lawyer, and those of your opponent.

These costs, often called disbursements, are for items such as counsels fees, expert reports and court fees. Your opponent would also be running up such fees as well, and as the loser generally pays all fees and costs in English law, such costs and expenses can add up quickly.

This is why many millions of people in the UK take out legal expenses insurance protection.

There are two main types of Legal Expenses Insurance in the UK, one called 'Before the Event' and the other one 'After the Event'. Both do as they say on the tin.

  • Before the Event Insurance (BTE Insurance) This is an insurance purchased before an accident or incident has occurred. These policies are typically sold as an “add on” product to a main insurance policy, such as your motor insurance, household insurance or home and contents insurance. Policies usually cost in the region of £15 - £30 for consumers, which can provide between £50,000 - £100,000 of indemnity, enabling most consumer legal expenses disputes to be dealt with.

  • After the Event Insurance (ATE Insurance) This is an insurance policy that is purchased after you have had an accident or incident that have given rise to a potential legal dispute. ATE insurance policies are usually purchased because there is no suitable BTE insurance in place. ATE policies are usually more expensive than BTE policies due to the risk profile. Motor ATE polices were circa £150, although they should reduce shortly as new legislation makes them less appealing.

Legal Expense Insurance Awareness

Although millions of people in the UK already have legal expenses insurance of one type of another, many of them are not aware of this fact, as it is buried in the pages of their main insurance policy documentation, and most usually somewhere near the back. If you did appoint a lawyer to help with a legal dispute, they would most certainly ask you if you have any legal expenses insurance cover.

Legal Expenses Insurance Can Cover

  • Unfair dismissal, or discrimination at work;

  • Injury from an accident that was not your fault; or

  • Disputes involving faulty goods or services.

  • Consumer Contract disputes

  • Property disputes

  • Tax disputes

  • Legal advice helplines

 

What doesn't legal expenses insurance cover?

  • Any disputes that started before you purchased the policy;

  • Any costs and expenses incurred before your claim is accepted;

  • Any claims where the “prospects of success” are assessed as being less than 51%

  • Anything specifically excluded - the policy documentation will set out what is and what is not covered.

  • Any claim not reported in time

  • Any claim not occurring in the territorial limit such as the UK or Europe.