Freedom of choice

 

Generally speaking, a client has the freedom to choose their own legal representative.  Who they choose can depend on lots of things including location, cost and expertise.  Often the solicitor is chosen through recommendation, which is how we get most of our work.

When it comes to legal cover the position gets murky.  If you have legal cover as part of your home or car insurance the company providing cover will argue that you do not have freedom of choice.  They will say that this is because the contract means they can choose your legal representative for you.

When pushed they will say that you can have freedom of choice but only once court action has started.  The reality is that by the time court action starts there is no point in changing your solicitor.

The reason for restricting freedom of choice is most likely because there will be some financial tie between the insurer and their panel solicitors.  Or there will be some agreement that if the claim does not succeed that the solicitor does not get paid.  This can mean that you are represented by someone who is not legally qualified and sometimes that the case is not fought as well or as hard as it could be.

The insurer will rely on section 6 of The Insurance Companies (Legal Expenses Insurance) Regulations 1990:

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).

They also rely on the Financial Ombudsman Service (FOS) guidance that says:

The law allows policyholders to choose their own solicitors to act for them from the point that legal proceedings start.

We’re likely to decide that the policyholder should be able to appoint their own solicitor from the start of their insurance claim and before legal proceedings are necessary, only in exceptional circumstances.

This guidance is wrong.

The regulations give effect to European Directive 2009/138/EC. It is how the regulations have been drafted that causes problems, specifically the word “proceedings”.  The FOS interprets this as meaning when court action has started.

The European Court of Justice (ECJ) has consistently sided with the clients when considering how the Directive should be interpreted in EU member states.  The latest case is:

Pascal Nobile v DAS Rechtsschutz-Versicherungs AG [2-17] E-21/16

This was a European Free Trade Agreement case but the advisory opinion was given by the ECJ as follows:

Article 201(1)(a) of Directive 2009/138/EC precludes terms and conditions in a legal expenses insurance contract that release the insurance company from its obligations under the contract if the insured person mandates an attorney to represent his interests, without the consent of the company, at a point in time when the insured person would be entitled to make a claim under the contract.

In non-legal speak what this means is:

If a client thinks they have a claim that may involve the use of their legal cover they can choose their solicitor immediately i.e. before court action is started.  The legal insurer cannot prevent the cover being cancelled if the client has chosen their own solicitor before the insurer is told.

The difficulty is that the courts in England and Wales have never been asked to give a judgement on this.  The courts have usually sided with the client in any disputes but for this argument the insurer usually agrees for the client’s chosen solicitor to act, thereby avoiding such a decision being made.

Our normal advice is that if the insurer fails to agree your choice of solicitor, to sue the insurer for breach of contract and to claim a financial sum as punitive damages to reflect the insurer’s wilful failure to comply with the law.

Unions

Unions often have legal cover as a member benefit.  Freedom of choice often does not apply as the legal cover is not included as insurance for you as an individual.

But, it is very important to find out what the union benefit covers. For medical negligence it usually means a free conversation with a lawyer, then if the lawyer wants to take the case on they then agree the funding.  This usually means a No-win no-fee agreement and insurance.

We are always happy to discuss a potential claim with you (for no charge) no matter how you then want to proceed.

Brexit

Freedom of choice relies on regulations in England and Wales that make effective a European directive.  The question is how the decisions of the ECJ will be treated by the courts of England and Wales.

Our opinion is that regardless of what happens in the future, the decision in the Nobile case will remain effective – you have freedom of choice right from the start.

©2020 by Bentley Solicitors Ltd