Sure – we are a business. At the end of the day, we do turn a profit. But we always promise to go the extra mile with our clients by updating them far more frequently than most other firms, and spending more on our cases for a better outcome. So, who am I talking about?
Insurance Companies
If you’re a driver, check your motor insurance policy to see if you have the “benefit” of Legal Expense Insurance or “Legal Protection.” This is an extra on your policy which is normally either provided out of courtesy, or for a small annual fee. Your insurers will tell you that you are fully covered if you have an accident. Sounds great, right?
Not so great when you hear the truth:
Legal Expense Insurance, quite frankly, in my opinion, is a scam. In many cases, if you have an accident, all your insurance company does is sell your claim on to the high paying law firm from their panel of solicitors. This fee can be anywhere up to £800 (I recall one recently which had £700 + VAT in the paperwork). So, where does this huge fee come from? It can only come from one of two places – either your compensation, or the running costs for your claim.
The referral fee paid out is not recoverable from the other side – So the solicitor that buys your case is paying this fee out of their own pocket. As a business, they must turn a profit to handle your claim: So wasting £800 on buying your case doesn’t leave a lot of money to spend on your case.
The easy way to think about it is this:
Legal Expense Insurance Solicitor: buys your case for £800 and has £800 less to spend on your case.
Independent Injury Lawyer: pays no one for your case and has £800 more to spend on your case.
The common complaints we hear from people (and yes, we do get a ridiculous amount of calls from victims who have gone down this route and are not happy) are normally the same:
- My solicitor never calls me back.
- My solicitor never updates me – I’ve not heard from them in 3 months.
- My solicitor says I should settle my claim for £1,500; yet many websites say I should get more for a 9 month whiplash injury.
- My solicitor has told me that the £1,500 offer they want to put forward is the final amount and no more can be claimed. But I think this is too low.
With less money to spend on your claim, your solicitor cannot afford to contact you regularly, they cannot afford to fight tooth and nail for the maximum amount you are entitled to get, and they may not even bother to get private medical care to assist with your injuries!
Don’t want to take my word for it? Here are a few stories about legal expense insurance:
LEGAL EXPENSE INSURANCE (LEI) – MY STORY – http://www.theinjurylawyers.co.uk/injury-lawyers-blog/2011/01/25/legal-expense-insurance-lei-my-story/
A blog from our very own RTA Assistant Melanie Saville – whom unfortunately suffered at the hands of a Legal Expense Insurance solicitor.
My Own Insurance Company Dying to sell me Legal Expense Insurance.
When I renewed my own insurance, I was most satisfied with the far lower price than my previous provider. But I must admit; I got seriously frustrated when the lady tried to sell me Legal Expense Insurance 5 times over the phone!
After the insurance representative persistently told me I definitely need Legal Expense Insurance because a “No Win No Fee Lawyers would definitely charge”, I advised her that this is not the case, and that “it’s my job to stop it!”
She asked: “What do you mean it’s your job to stop it?”
I replied “I work for a personal injury law firm…”
Her response was actually quite amusing: “Ooohhhhhh, I see. Never mind then”. I could tell in the tone of her voice she knew right away she was selling me a waste of time.
I like to advise my friends and family as much as I can to avoid it as well. My closest friend James advised me he is renewing his insurance, and I have been so persistent in making sure he gets rid of any Legal Expense Insurance from his policy, that my advice thankfully sunk in. He told me the other day that he advised his insurers that his friend (me) works for a personal injury law firm and has advised that there is no need for Legal Expense Insurance, because with your own injury lawyer, you get a no win no fee with no costs to pay ever. So, when he advised the insurance representative of this, he actually got the rep to admit that Legal Expense Insurance is useless.
My friend advised me that he said to the insurance representative: “well, I can just go to a law firm and get the claim done that way without having to pay you to cover me for it, cant I? If I can get something for free that you are selling me, there’s really no point in it is there? So, what you’re trying to sell me is useless, isn’t it? You’re selling me something that I can get for free?” I am told that the insurance representative actually agreed, stating – “yes, I suppose it is quite useless”.
If you go ahead with Legal Expense Insurance, your insurers should tell you that a referral fee is involved, and your solicitor MUST tell you that they have paid one out. So, always check your paperwork and make sure no one is wasting your claim budget on passing your details around.
The Solution
Instruct your own independent specialist injury lawyer working on a Genuine No Win No Fee basis. This means there are no costs to you whether you win or lose – ever! All costs are recovered from the other side so you always get 100% of anything awarded to you, and your lawyer will have a full budget to spend on your claim. Hey – even the Solicitors Regulation Authority (the body that regulates all lawyers – including those involved in referral fees) together with the Bar Council have recommended referral fees be stopped as they have the potential to limit access to justice and reduce the quality of legal services on offer.
If you would like any further information about Legal Expense Insurance, please feel free to get in touch for a no obligation chat. If you’re about to claim – STOP. Don’t enter in to any agreement with your insurers until you’ve done your homework.
The views and opinions expressed in this article are the opinion of the author, and do not necessarily reflect the views and opinions of The Injury Lawyers