If your claim for compensation is unsuccessful, a Legal Expense Insurance policy may protect you from paying the legal fees and expenses of your opponent. Although it is not a legal requirement to have a policy in place to pursue a compensation claim, without one you may be exposed to unnecessary financial risk.
Our below guide will help you understand how a Legal Expenses Insurance policy works, but if you have any questions feel free to call one of our advisors on 08000 93 00 94.
Legal Expenses Insurance (LEI) protects you from the financial risks directly associated with pursuing a legal case. Without it, you could be liable to pay for expenses (called disbursements) such as medical reports, barrister fees and the legal costs of your opponent.
The most common types of Legal Expenses Insurance are 'Before the Event' and 'After the Event'.
Before the Event Insurance (BTE Insurance) is a policy purchased prior to any accident or incident. This type of insurance may be attached to a variety of other insurance products that you have purchased such as car, motorcycle, home contents or buildings insurance. If you are a member of a Trade Union or association they may also have a BTE policy which covers you.
After the Event Insurance (ATE Insurance) is a policy that can be purchased on your behalf after an accident or incident has taken place. This is usually purchased in the absence of suitable BTE cover and is specifically tailored to the type of claim you are pursuing.
If you are not sure what a Conditional Fee Agreement is, just click the link to find out more from our guide. Conditional Fee Agreements and After the Event Insurance policies work in tandem; protecting you from receiving an invoice for costs should your claim be unsuccessful.
This combination provides you total protection if your case is lost:
There are exceptions to the above, such as in the event that fraud or dishonesty is involved, but for more details you can review our Conditional Fee Arrangement guide.
Your lawyer will suggest and with your authority setup suitable insurance on your behalf which will involve:
As lawyers, Spencers Solicitors are not financial advisors and you may prefer to research your own After the Event policy and if this is your preference we will work with you to ensure you purchase a policy which is suitable for the value and complexity of your claim.
You only pay for your After the Event insurance after your case is won - so the premium is usually paid from your final compensation award.
If your case is lost, you do not pay anything for After the Event insurance - as it is effectively a 'disbursement' and so is covered by the policy itself (self insured), so you are never out of pocket.
As well as the peace of mind you get from knowing all potential costs are covered, your insurance gives you indirect benefits as well.
An insurer will want to know the risks involved with your case before they issue you an ATE policy. So by having insurance in place the strength of your case is externally validated, helping send a clear message to your opponent that your case has reasonable prospects of success and that you mean business.
As mentioned at the start of this guide, there is no legal requirement to have legal expenses insurance to pursue a compensation claim. However without a suitable BTE or ATE policy you may be exposed to unnecessary financial risk if your claim is unsuccessful.
We place our client's best interests at the heart of everything we do, and exposing injured people to unnecessary financial risk is not something we would ever advise.
Any reputable legal practice will hopefully share this view, but with any personal injury claim you should always ask if insurance is in place to cover all expenses and legal fees in the event your claim is lost. Only then can you have the piece of mind that your claim is risk free and truly 'no win no fee'.
To find out more on how we fund and pursue personal injury claims, just call us on 08000 93 00 94.