The legal costs that arise when bringing a claim can be incredibly high in the majority of cases, especially commercial litigation. These legal costs can deter people and businesses from pursuing a claim and standing up for their legal rights. A potential litigant must consider not only their own legal costs but also the potential exposure to the other side’s costs, as our court system operates on a ‘loser-pays’ principle.

Legal expenses insurance (LEI) can be obtained to protect parties from the costs of litigation. LEI can help litigants to cover the costs incurred throughout their case and protect them from any adverse costs or uninsured losses. LEI provides individuals and businesses with the opportunity to pursue legal action whilst also minimising the stress regarding the legal fees associated with it.

One of the most common questions we are asked in “how much is Legal Expenses Insurance?” It is crucial to consider the costs of a policy to determine whether legal expenses insurance is the correct choice for your case. It is, therefore, essential to have an experienced insurance advisor by your side to ensure that you understand all of the options that are available for your case. At Annecto Legal, we assist our clients in identifying the finer points and help them to secure a good deal for their case.

What is legal expenses insurance cover?

Legal expenses insurance is a type of insurance that provides coverage for the costs associated with legal action or disputes. This can include things like hiring a solicitor or barrister, court fees, and other expenses related to pursuing or defending a legal case. It is often included as an optional extra of other types of insurance policies, such as home insurance, or car insurance, but can also be purchased as a standalone policy. This is known as Before the Event (BTE) insurance and is usually purchased before an event that gives rise to litigation occurs.

If a party does not have an existing insurance policy in place, (such as home insurance legal expenses cover), they can still obtain legal expenses cover through an “after the event” (ATE) insurance policy.

ATE insurance can be used in many types of cases, and is commonly used on personal injury claims. This type of insurance can also be used on the majority of commercial cases, these include employment disputes, shareholder disputes, unfair dismissal claims, contractual disputes, professional negligence claims and many more.

Whilst legal expenses insurance is predominantly used for claimants, any party to litigation can obtain cover.

How much is legal expenses insurance?

Some legal expenses insurance (BTE) is available as an optional add-on with other types of insurance. The cost of this will depend on the insurance provider, but can be an inexpensive addition.

ATE insurance is typically purchased by a solicitor on behalf of a client in cases where no Before the Event (BTE) insurance exists. Legal fees vary hugely, but there is data that shows  a solicitor in the UK costs an average of £200 per hour, depending on their experience. Without legal expenses cover, parties would be left to bear the costs of their solicitor’s fees, plus any disbursements and costs of the opposing party in the case of an unsuccessful claim.

There is often an upfront cost for legal expenses insurance and the fee payable will depend on the insurer.

In some cases, the payment of this insurance premium can be deferred until the conclusion of the case. In these situations, policyholders may only be required to pay for this premium from the damages received if their case is successful. This is common if there is a no win, no fee agreement in place with a solicitor.

ATE insurance can be purchased at any time before proceedings have been issued or following this. Purchasing insurance after proceedings have commenced, however, typically results in higher premiums and can make it more difficult to find cover.

The insurer will determine your prospects of success regarding your case and will only offer insurance coverage if they are confident that your case will be successful.

If the cases is unsuccessful, the solicitor will usually make a Legal Expenses Insurance claim to cover any fees owed.

At Annecto Legal, we can help you to understand the fees associated with legal expenses insurance and help you to find the best deal for your case.

What are the benefits of using legal expenses insurance cover?

Legal expenses insurance provides a range of benefits to parties seeking to insure legal action. Some of these benefits include:

• Claims can be pursued to their fullest extent as policyholders do not need to be as concerned about the financial repercussions of a legal case due to risk mitigation
• Legal expenses cover takes away the risk of being made to pay the opponent’s legal costs in the event of an unsuccessful case
• Legal expenses insurance can help to provide protection from interim costs orders as certain policies can protect against adverse costs in interim hearings
• LEI policies can provide an incentive for an opposing party to settle a case. They will be informed that an insurer has conducted an analysis of the merits of the case and have determined that the case has good prospects of success

We work alongside a range of professions, including solicitors, insurance brokers, accountants and insolvency practitioners, providing assistance and guidance on litigation cover and funding.

How can Annecto Legal assist?

Annecto Legal assist clients in realising the true value of their litigation claims. The application, quotation, costs, and premium structures required to buy legal expenses insurance can be complex for those without experience. Therefore, we recommend that you get in contact with a member of our team today so that we can begin to give you the guidance that you need.

We provide our legal services to a variety of clients, including individuals, accountants, insolvency practitioners and solicitors. Get in contact as soon as possible to find out more on how we can assist.

Call us today 0800 612 6587 or use the contact form below.