Liverpool, UK -- (SBWIRE) -- 07/21/2014 -- The close relationships between insurance companies and the so-called panel solicitors that they appoint to deal with their customers legal claims not only reduces choice, but may also be breaking the law, says Martin Malone, Solicitor and Partner at Canter Levin & Berg Solicitors.
Panel Solicitors are those firms appointed by a number of Before the Event Insurers to deal with any legal matters their customers may have. These firms bid for work from the insurance companies, often agreeing to accept a fixed flat fee for each case they receive from the insurer.
The bidding process for work from insurance companies leaves little room for the consideration of the complexity of cases these solicitors might end up having to deal with or whether any of these claims will be contested. It can also lead to situations where people who have taken out a legal expenses insurance policy with a specified level of cover , for example £50,000, may find they actually get a service from a panel solicitor that cost their insurance company less than a tenth of that figure.
Speaking from his own experience as a Solicitor, Martin Malone said:
“One of the key problems with panel solicitors agreeing to work a fixed fee is the effect that this has on the level of service they provide to their client. In my opinion fixed fees create a disincentive for a solicitor to advise their client in certain circumstances.
For example, I doubt a solicitor will be inclined to advise their client to proceed with a fully contested claim when they could settle that claim at the earliest opportunity, sometimes for much less than the claim is actually worth.
In both scenarios the solicitor involved will be paid the same amount, but if he or she chooses to advise the client to settle, they will save themselves a huge amount of time and effort, even if it results in an unsatisfactory outcome for their client.”
Martin’s comments echoed those of prominent legal blogger Kerry Underwood, who on his own website has been very critical of the restrictions insurance companies seek to place on the right of their customers to choose their own independent legal representation. As well as misleading information from Before the Event Insurers, Mr Underwood says consumers are also ill-served by the Financial Ombudsman Service which wrongly states on its website that insurers can appoint panel solicitors “for legitimate commercial and quality-control reasons”.
According to a European Directive, implemented by the Insurance Companies (Legal Expenses Insurance) Regulations 1990, consumers do have the right to choose their own lawyers. Those lawyers may have to negotiate payment rates with the insurer but, if necessary, the difference between the rate paid by the insurer and the lawyers’ standard rates can be covered by a “no win lower fee” agreement.
Offering advice to people who are about to make a claim on their legal expenses insurance policy, Martin Malone said:
"If you are told by your legal expenses insurer that you have to use a panel solicitor, tell them that they are wrong. Make sure that you understand your rights, especially when it comes to being able to choose the solicitor you want to represent you in a legal matter."
About Canter Levin & Berg Solicitors
Canter Levin & Berg Solicitors are a Liverpool-based firm of Solicitors who have been providing independent legal advice to clients, many of whom have legal expenses insurance, since 1947.
We are not part of any insurance company panel of solicitors, so we will make sure that our priority is, above all, looking after your interests.
For more information on the services our Solicitors can provide if you are looking to fund your legal costs through your legal expenses insurance cover, call our offices on 0151 239 1000, or visit our website to find out more about how we could help you.