Legal expenses insurance policy—can a party choose their own lawyer?

Q: Can a party claiming using their legal expenses insurance policy choose their own lawyer?

Legal expenses policies are governed by The Insurance Companies (Legal Expenses Insurance) Regulations 1990. These regulations address the freedom to choose a lawyer at reg 6:

Freedom to choose lawyer

6

(1)    Where under a legal expenses insurance contract recourse is had to a lawyer (or other person having such qualifications as may be necessary) to defend, represent or serve the interests of the insured in any inquiry or proceedings, the insured shall be free to choose that lawyer (or other person).

(2)    The insured shall also be free to choose a lawyer (or other person having such qualifications as may be necessary) to serve his interests whenever a conflict of interests arises.

(3)    The above rights shall be expressly recognised in the policy.

A: The insured’s freedom to choose a lawyer can therefore not be inhibited by legal expenses insurance providers. This was confirmed by the CJEU last year in Sneller.

Note:

There is no provision in the regulations that the freedom to chose a lawyer can be circumvented by the insurer if there are ‘exceptional circumstances’. However, some policies still seek to include wording to this effect. This issue was considered by the Court of Appeal in Brown-Quinn where the Court of Appeal was very clear that:

‘It is quite wrong that, despite the warning shot delivered to legal expenses insurers by this court in Sarwar v Alam [2001] EWCA Civ 1401, [2001] 4 All ER 541, [2002] 1 WLR 125 para 44, insurers should many years later be issuing policies which do not comply with the Regulations. General conditions 2.3 and 5 are in breach of the Regulations in the ways I have explained and must be either deleted or comprehensively re-drafted.’

The relevant conditions considered in this decision were:

  1. condition 2.3: If we agree to start legal proceedings and it becomes mandatory for you to be represented by a lawyer, or there is a conflict of interest, you can choose an appointed representative by sending us the suitably qualified person's name and address. We may choose not to accept the choice of representative, but only in exceptional circumstances. If there is a disagreement over the choice of appointed representative, another suitably qualified person can be appointed to decide the matter. Before you choose a lawyer, we can appoint an appointed representative

  2. condition 5. If an appointed representative refuses to continue acting for you or if you dismiss an appointed representative, the cover we provide will end at once, unless we agree to appoint another appointed representative

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