Insured’s Freedom to Choose Representation

Insured’s Freedom to Choose Representation

A recent employment case has strengthened an employee’s position in dealing with insurers after the Court of Justice of the European Union (CJEU) held that legal expenses insurers cannot insist that the insured use its panel solicitors.
In Sneller -v- DAS the Claimant held legal insurance with DAS whose terms and conditions stated the insured had freedom to choose their own solicitor provided that DAS decided the case be dealt with externally.
The Claimant wanted to claim unfair dismissal against his former employer via his own solicitor but DAS tried to rely on their terms and conditions and decided to deal with the case in-house.
Legislation on legal expense insurance recognises an insured person’s freedom of choice in instructing a solicitor. The CJEU considered the legislation and held that DAS’s terms and conditions were too restrictive. The authority for DAS to decide whether to instruct externally or internally essentially removed the insured’s freedom of choice. An insured’s choice as to their solicitor should never be based on whether their insurers believe representation is necessary. The legislation therefore must be interpreted as precluding a legal expenses insurer which stipulates in its terms and conditions that its in house solicitor must be used. Policies which state that the costs of legal advice provided by any external solicitor will only be covered if the Insurer decides the handling should be outsourced will also be excluded. However it should be noted that insurers might not necessarily have to meet the costs of the case in full where an insured has instructed external solicitors (i.e. the Insurer might be able to put a limit on the costs to be incurred for example putting an upper limit on the hourly rate of the external solicitor).
If you are experiencing any issues with insurers do not hesitate to contact us at Michael Lewin’s Employment Department for assistance.
Written by
Crystal Bolton

Recent Posts

Leave a Comment