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Legal Expenses Insurance News

Added - 14/03/2007

It doesn’t surprise us at the car insurance news desk that the Solicitors Regulation Authority (SRA) has been investigating accusations that many motor insurance brokers are selling legal expenses ‘insurance’ that does in-fact place an ultimate potential cost burden on the solicitor and doesn’t offer any insurance protection what so ever.

This conflict of interest is something that many claims solicitors are calling for to be reviewed through the Financial Services Authority. The focus lies on ‘hold harmless arrangements’ that effectively offer protection for insurance providers in the event of court cases that are not successful.

If solicitors dealing in claims cases and such matters are prepared to open themselves up to such potential abuse by accepting the terms of these motor insurance legal expenses insurance policies then one might think they are entitled to take such risks however this actually compromises the SRA’s code of conduct which clearly states that personal injury solicitors who act wholly independently and for the interest of the injured party must do so without acting in any way that is likely to affect the trust the public place on the profession. It would clearly be a case of serious misconduct if a claims solicitor was to make any false representation that an insurance policy existed when in fact it didn’t.

The FSA who adopt a strict policy of treating customers fairly will be vehement in ensuring the customer or the claims client is not mislead or ‘treated unfairly’ in any way. The Solicitors Regulation Authority (SRA) is currently compiling evidence and would appreciate any feedback on the issues relating to these spurious legal expenses insurance policies.

If motor insurance brokers are found to be knowingly involved in this practice then the FSA will come down hard on the breach.

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