Legal Expenses Insurance covers the costs of commonplace legal action and is often sold in conjunction with home, credit card, motor or travel insurance as an add-on. Since LEI is often packaged, it is advisable to check current insurance policies for LEI included within the terms. Many trade unions and workers’ associations run similar schemes which allow for free access to legal advice from an approved solicitor, and remuneration even if the case is unsuccessful.
LEI policies are designed to cover the most routine legal issues, including:
- Litigation involving faulty or contract breaching services / goods.
- Employment issues including unfair dismissal, workplace discrimination and employment contract disputes.
- Personal injury and compensation.
Common qualifying criteria for LEI:
- The case must have a reasonable chance of success: ≥51% likelihood of the case succeeding in court as decided by an independent solicitor. If there is disagreement over the likelihood of a cases’ success, a second pinion from a barrister should be sought. If the case is deemed unlikely to succeed, the insurer will usually reject the claim.
- The worth of the claim: the insurer will assess whether it is proportionate to pursue the claim with respect to the costs being recovered. Factors including the solvency of the opposition and whether their assets are reasonably recoverable will affect the insurer’s decision.
LEI generally does not cover issues which began before date of insurance policy purchase or legal costs paid before approval for the claim is accepted by the insurer.
Insurance policies often outline specific cases for which they will not pay out- this is documented in the terms of insurance and should be consulted both before purchasing the insurance policy and before deciding to make a claim.