If you have a legal issue, you may be able to cover your costs using legal expenses insurance.

This page covers before the event (BTE) legal expenses insurance, which is when you take out a policy before the event arises where you may need legal assistance.

A different product, called after the event (ATE) legal expenses insurance is sometimes available to help you with legal costs after the event has arisen.

What is legal expenses insurance?

Legal expenses insurance is a type of insurance that can protect people or businesses if they have an unexpected legal issue.

Legal expenses insurance helps you access support, advice and sometimes representation to resolve the issue you are dealing with.

Policies vary and might not cover all the same things, but it may:

  • cover your legal costs
  • give you access to legal advice through a 24-hour helpline
  • give you access to other resources such as self-service legal documents or an online will

This is different to other insurance that provides you with compensation for the cost of a loss you have suffered. For example, travel insurance could help you claim back the cost of a cancelled flight.

Legal expenses insurance can also often protect any compensation you received after successfully bringing a claim.

Otherwise, your lawyers may take their payment for their services out of your compensation.

The policy can also protect you against your opponent’s legal costs if you are unsuccessful in your claim.

Case study – employment dispute

Simon is unhappy with his working relationship with his line manager, who he thinks is unfairly critical about his work.

He calls the legal helpline and is advised to submit a grievance to his employer to try to resolve their differences.

Simon is pointed to a grievance template in the insurers’ online document suite and advised on how to complete that.

He calls back later and asks for further advice about what to say when the grievance meeting is arranged.

Despite the discussion, the relationship deteriorates further and Simon is dismissed by his employer on the basis that they are not happy with his performance in his job.

Simon contacts the helpline and is advised he has reasonable grounds for pursuing a claim.

A law firm is appointed by the insurer to act for Simon under the policy and they enter into an agreement with Simon to pursue his claim.

The law firm advises Simon that they need to start a claim within three months of his dismissal.

The firm prepares the claim and submits it to the Employment Tribunal.

The firm also writes to Simon's employer about his claim.

Despite the involvement of mediation service ACAS, agreement can’t be reached with Simon’s employer.

The claim goes to a hearing, where the law firm represent Simon.

The tribunal decides that Simon was unfairly dismissed from his job with a payment of compensation.

The insurer pays Simon’s legal fees and Simon receives his compensation payment from the employer in full.

Check if you have legal expenses insurance

Legal expenses insurance is often included in existing insurance policies, such as your:

  • vehicle insurance
  • household insurance

You may have been prompted to add legal expenses insurance to your main insurance policy at the point of purchase for an extra fee.

Check your car, home and life insurance policies carefully to see if legal expenses insurance is included.

If you have a credit card or you’re a member of a union or membership organisation, you may also have legal expenses insurance.

If you run a business, you should check if any of your commercial insurance policies contain legal expenses insurance.

Issues covered by legal expenses insurance

This will depend on the type of policy that you have and your individual insurer as the wording and cover of each policy can differ.

Motor legal expenses

These policies tend to focus on issues relating to a vehicle, such as a car.

They often provide advice on issues including:

  • making a claim for personal injury you have suffered in a car accident
  • claiming financial losses suffered in a car accident that are not covered by your insurance, such as your policy excess and loss of earnings
  • defending a criminal prosecution relating to a motoring offence

Home legal expenses

Sometimes also referred to as ‘household’ or ‘family’ legal expenses, home legal expenses may cover a wider range of issues.

These include:

  • personal injuries suffered at work or on someone’s property
  • medical negligence
  • employment disputes
  • neighbour disputes
  • housing issues, including issues that a tenant has with their rented property and/or landlord
  • disputes involving wills and the division of property when someone dies
  • debt disputes
  • cyber issues and identity theft

They may also cover consumer and contract disputes, including when:

  • you have been supplied with faulty goods
  • services such as building contracts are defective or delayed
  • you receive poor advice such as a survey that doesn’t identify problems

Some home and family policies also provide support for other non-legal issues such as tax advice and counselling.

Commercial legal expenses and landlord legal expenses

These provide cover for a business owner, employer or landlord. The legal issues will be similar to those within home and family policies.

Some of these policies also provide compensation cover. This could mean:

  • money awarded to an employee if their claim is successful
  • paying rent to a landlord while it is recovered from a tenant

Early contact with the insurer is important to receive these payments. This is because you may need to prove you meet the insurer’s conditions

Other people in your household

It is important to check your policy carefully, as cover might be included for relatives or other people who may live in your household.

Exclusions (what is not covered)

Like all types of insurance, there may times when you cannot use the benefit of the insurance.

Your legal expenses insurance policy may only be valid for issues that started after you took it out. It may not cover you for issues that you knew were a problem before you bought the policy.

Your legal expenses insurance policy will not usually pay for representation if you were at fault. You will still be able to get advice on your position through the legal helpline.

Any claim will also need to have reasonable chances of success for the insurer to ask a law firm to act for you.

Some policies will also not provide cover if the cost is not “proportionate”. For example, when your claim is a low value claim or the costs of pursuing an action would be more than the value of your claim.

Your insurer will be able to provide you with advice in those circumstances and whether some limited support can be provided.

You should seek advice as early as possible after you encounter an issue, as some legal issues have time limits associated with them.

There are also several types of issues that are generally excluded from legal expenses insurance policies, but you should check your policy carefully.

How to use legal expenses insurance

Car or vehicle accidents

Call your car insurer directly, as soon as possible.

They will then be able to guide you through their insurance process.

If you have legal expenses insurance and are likely to need legal support, your insurer will advise you about your policy.

All other issues

For all other issues, there is a two-step process.

1. Helplines

First, make a note of your policy reference number and all the information about your issue.

Contact the advice service listed in your legal expenses insurance policy. This could be by telephone, email or online.

It will be answered by a solicitor or other legal expert, who will be able to help you with your issue.

You can call the helpline as many times as you like. It won’t affect the cost of your legal expenses insurance premium.

The advice from the legal expenses insurance helpline will usually be enough to help you with your dispute, without having to take further action.

However, if necessary, your legal expenses insurance provider can advise on whether:

  • formal legal action (such as going to court) is an option
  • your policy can pay for legal representation

They can also signpost you to other sources of advice and support.

2. Legal action

Your legal expenses insurance provider will help you understand whether you could take formal legal action.

It might be in your best interest to get advice and deal with the issue yourself before taking formal legal action.

Your legal expenses insurance provider will refer you to one of its panel law firms.

The firm will look at your issue and decide if it has a reasonable chance of success (more than a 51% chance).

If the law firm says you don’t have a reasonable chance of success (less than a 51% chance), you can seek a second opinion. You will need to pay for this yourself.

If your legal expenses insurance provider accepts the second opinion – that you have at least a 51% chance of success – you will be able to claim that money back.

You will not be able to recover any legal costs for work done before the insurer appoints a lawyer for you under the policy. You should speak to your insurer as early as possible.

You have the right to choose your own solicitor instead of using the firm assigned to you as part of your policy. However, this is usually not until legal proceedings (litigation) need to be started.

If you choose your own solicitor, they might charge an hourly rate that is higher than any rate covered under the policy.

The legal expenses insurance provider only has to pay ‘reasonable’ rates to the solicitor you choose.

You may have to pay the difference if your solicitor costs more than the amount the policy covers.

Your policy will also outline what your ‘level of indemnity’ is. This means the total amount of legal costs that will be paid for by your policy.

If the indemnity runs out, you may need to discontinue your case or cover any additional costs yourself. Different types of policy will have different levels of indemnity.

Make a complaint about your legal expenses insurance policy

Any complaint about the service provided by a law firm appointed under your policy should first be dealt with through the firm's complaints process.

If you feel your complaint has not been properly dealt with, you can contact the Legal Ombudsman.

If you would like to make a complaint as a result of using your legal expenses insurance policy, you can contact the Financial Ombudsman Service.

More information on legal expenses insurance

Other ways to pay for a solicitor

If you don’t have legal expenses insurance and you need legal help, there are several ways in which you might be able to pay for help.

Find a solicitor

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