I confess I have never been the biggest fan of BTE ('before the event') insurance, probably because of the massive risks and lost time that it generated within the framework of the 2000 Conditional Fee Agreement Regulations.
It also has a lot to do with having had to deal too many times with the likes of DAS Legal Expenses. It was good to see them being brought to heel in the High Court at the end of March this year.
It is not all bad by any means. I can think of two good experiences with Churchill Insurance, for example.
By “good experience” I mean that the client’s legal expenses insurer is prepared to appoint us at the outset of the case when the client needs us and to agree a sensible hourly rate for our services - rather than tell us to get lost because we are not on their panel of pet lawyers.
Well – here’s another good experience...
I have a client, a straightforward and pleasant bloke, who is highly-skilled as a lathe operator. He was involved in a serious car accident as a result of which he had extended sickness absence. There was no clear-cut case in negligence against any other road users involved.
After a year or more of absence his employer suddenly terminated his employment, without any warning. In short, he had a reasonably good case for compensation for unfair dismissal and disability discrimination, probably worth high four figures, possibly low five.
He came to me as an existing client and asked if I would look at it on a contingency basis. In the course of doing the proper checks we identified that he had a policy of BTE insurance.
I got in touch with his insurers and gave them a summary of the case. I told the client I didn’t know whether they would be prepared to instruct us, warning him that some policy providers take a very narrow view of freedom to choose your lawyer.
Insurers came back to us and said they would indemnify from that point. They would be prepared to pay up to 95% of our normal hourly rate if on examination of a claim for costs the work justified it. They set a realistic provision as a maximum for fees. They routinely required opinion from counsel (which was supportive) and paid for it.
The claim is now stayed and will probably be struck out. The respondent is in administration and it seems that the best possible dividend for unsecured creditors, including my client, would be around 7%. That means that a really good result might yield 20% of the costs reserve that insurers were prepared to allocate.
I add for the benefit of anyone who doesn’t recognize the point that this was an Employment Tribunal claim. The relevance of that is that costs awards are few and far between (says he, who secured two the year before last and is halfway, hopefully, to another...)
Insurers here perfectly reasonably cut the cord. We were asked to send in a schedule of our costs, which we did.
Within a short space of time, I received a letter from their solicitors who audit all such claims. They asked for a complete copy of our file which we were able to send electronically by a series of e-mails.
That firm of solicitors looked at the matter on the same day and wrote to us with a detailed analysis of the claim. For the most part it was to tell us that they agreed that the work was reasonable, justified the hourly rate, etc.
Their only quibble arose from some slight debate over the date on which cover had been terminated but given their attitude as a whole we were prepared to accept a proposed payment of around 85%.
I have had better endings for sure, and there is nothing to replace the satisfaction of a good win and a happy client, but It has to be said that this wasn’t a bad safety net.
At no point can I recall any unpleasantness or awkwardness in dealing with primarily the insurer or, very briefly, their auditing solicitors. On the contrary, it has been a positive experience that prompts me as a sometime BTE sceptic to post this blog.
The players involved?
Step forward - NatWest Legal Expenses and Keelys LLP.
Take a bow, you guys. DAS and others, take note.