The Gazette 1996

companies had hoped to operate through a network of panel solicitors. For those solicitors who would have been appoint- ed to the panel, this would have been a popular way of proceeding. Other solicitors would have been indignant that their clients were not being permitted to appoint their own solicitors. It is import- ant that members are aware that the matter is in fact governed by SI 197 of the 1991 European Communities (Non- life Insurance) (Legal Expenses) Regulations 1991. Clause 7 provides that: "any contract of legal expenses insurance shall expressly recognise that - (a) where recourse is had to a lawyer or other appropriately qualified person to defend, represent or serve the interests of the insured person in any inquiry or proceedings, the insured person shall be free to choose such lawyer or other person." The Professional Guidance Committee takes the view that from the moment the insured has a right to claim on his policy, the insured has the right to a choice of solicitor. The committee raised this matter with one legal expenses insurance company and disagrees with the latter's interpretation that clause 7(a) provides that a choice of solicitor must be given only on the issue of proceedings. Cases settled prior to involvement of a solicitor It is reasonable that the legal expenses insurance company, being the paying party, would wish to limit legal expenses without prejudice to its policyholders. With this in mind, companies usually use their own personnel from within the company to seek to settle claims. To allow the company an opportunity to do this, the insurance policy will usually provide that until a solicitor is formally appointed, costs will not be covered. Some of the publicity material states: "Please do not ask for help from a lawyer before we have agreed" or, more trenchantly, "If you think you may have a claim, never ask a solicitor (or any other person) to help you until we have given our permission. If you do, The Department of Enterprise and Employment regulates the matter.

cover would be available would be for pursuing a claim against a third party for the excess which is on most insurance policies. Subject to the legal expenses insurance company's consent, legal expenses incurred in taking an appeal will also be covered. Cover will usually be provided on the basis that the company will cover costs if, in the company's opinion, there is a reasonable prospect of success. In all cases, it would be prudent for the solicitor instructed to examine the policy document itself to ensure that he observes the conditions of the policy. For instance, it may be necessary for the solicitor to inform the company of any settlement proposals. The cover is not limited to motor legal protection. Cover is also available in respect of business-related litigation. Advantages for the client Some of the legal expenses insurance companies have run advertising campaigns which implied that it was not possible to pursue a legal claim without legal expenses insurance being in place. Such an example from advertising material has been: "She was in the right, but it would have cost her a fortune in legal fees to pursue her claim". This does not, of course, reflect the true position, which is that the norm is for solicitors to fund claims, pending the conclusion of the case. However, it is undoubtedly true that the receipt of party and party costs does not usually cover the full legal expenses of a case. The party and party costs will be set off against the solicitor/client bill, but there will usually be a shortfall to be paid. This is generally deducted from the amount of the settlement or award. The legal expenses insurance company may make it a condition of payment that the amount paid by the company will represent a full discharge of the solicitor's account, with no further monies to be sought by the solicitor from the client.

we will not pay the costs involved". The companies encourage the insured to come directly to them by providing "first-aid" legal advice by way of a 24 hour, seven days a week, helpline. Advice is given and the claim pursued in-house, up to the issue of proceedings. The committee has been monitoring the matter of the legal expenses insurance for some time. Quite a number of Irish solicitors have now had experience of dealing with legal expenses insurance companies. The committee has received mixed feedback from these solicitors. Some have complained that the company sought a continuous involvement in the case, which the solicitors have seen as an interference with the solicitor's professional judgement in the conduct of the case. Other solicitors report that there was no interference and that their costs and outlays were paid promptly when the solicitor's bill was submitted. Sometimes the company has required the solicitor to submit a bill to taxation. The committee welcomed hearing the experiences of members. Some difficulties which have arisen with individual schemes have been resolved. It is clear that for the product to be a success for the companies, it will be necessary for companies to develop a good rapport with the solicitors who are appointed by the insured. If this product meets the needs of the consumer, it will become popular. It remains to be seen whether this will happen. Mixed feedback from solicitors

Niall Casey, Professional Guidance Committee

SnEP PRINTING U 20 LOWER ORMOND QUAY, DUBLIN 1. Tel: 8 7 2 5 0 77 • Fax: B 72 5 1 2 3 M l COMPLET E PRINTSERVICE • Graphic Design • Bulk Photocopying • Colour Laser Copying fAt Setutet to tAc £t

Choice of solicitor required by EU Directive

It appears that legal expenses insurance

389